Benchmarks trade firm in late afternoon session

Indian equity benchmarks continued their firm trade hovering near the highest point of the day in the late afternoon session on account of buying in frontline blue chip stocks. The sentiments got some support after the Economic Survey stated that the government will likely meet its FY16 fiscal deficit target of 3.9%, while at the same time it also indicated that India’s long run potential GDP growth is substantial, about 8 to 10 percent. The Economic Survey highlighted that government expects economy to grow 7-7.5 percent in the fiscal year to March 2017. Traders were seen piling up position in Bankex, Metal and PSU sector stocks. In scrip specific development, NTPC was trading firm on reports that state-owned Life Insurance Corporation (LIC) has increased its stake in the company by 3.90%, between July 25, 2014, and February 24, 2016, after buying 32.15 crore shares in the open market.

On the global front, the Asian markets were trading in green, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,000 and 23,200 levels respectively. The market breadth on BSE was negative in the ratio of 1030:1271, while 163 scrips remained unchanged.

The BSE Sensex is currently trading at 23207.10, up by 231.10 points or 1.01% after trading in a range of 23021.94 and 23227.91. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was up by 0.43%, while Small cap index down by 0.29%.

The gaining sectoral indices on the BSE were Bankex up by 1.92%, Metal up by 1.54%, PSU up by 1.34%, Capital Goods up by 1.31%, Realty up by 1.30%

The top gainers on the Sensex were SBI up by 4.05%, Coal India up by 3.56%, Larsen & Toubro up by 2.48%, NTPC up by 2.32% and HDFC Bank up by 2.22%.

On the flip side, Bajaj Auto down by 3.24%, Hero MotoCorp down by 2.61%, Bharti Airtel down by 1.42%, Lupin down by 1.10% and Wipro down by 0.14% were the top losers.

Meanwhile, ahead of the Union Budget 2016-17, the domestic ratings agency India Ratings has said that the government can achieve 3.5 per cent fiscal deficit target for 2016-17 from spectrum auction amid concerns over the fiscal consolidation roadmap as there is a possibility of government making a windfall gain in its non-tax revenue account in case the spectrum sale takes place in FY17.

India Ratings however said that there is a likelihood of fiscal slippage in the current fiscal to 4.1 per cent as against the targeted 3.9 per cent due to lower than anticipated GDP growth. It said that at an absolute level, the government will be able to get the fiscal deficit at Rs 5.6 lakh crore, but the lower GDP growth will push the number higher in percentage terms.

It said that the Indian industry will also be keenly looking at the fiscal stance of the government, specifically for details on how additional spending can result in more capital investments. Further, it flagged that while capital expenditure increased in FY15's revised estimates, it is still stuck at 1.7 per cent of the GDP and there is a need to push it to 2 per cent.

On the sectoral front, the rating agency said that the infrastructure sector is likely to be a priority in the Union Budget but the government needs to provide alternative avenues for infra funding, an increase in the fund allocation for highways, a framework for revival of stalled projects and a road map for the road regulator. Further for the auto sector the budget may entail a provision for introduction of a 'scrappage' scheme for commercial vehicles and a reduction in excise duty on large cars and SUVs.

The CNX Nifty is currently trading at 7041.90, up by 71.30 points or 1.02% after trading in a range of 6985.10 and 7052.90. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were SBI up by 4.31%, Coal India up by 4.21%, Hindalco up by 3.28%, Vedanta up by 3.16% and HDFC Bank up by 2.76%.

On the flip side, Bajaj Auto down by 3.48%, Hero MotoCorp down by 2.67%, Lupin down by 1.39%, Bharti Airtel down by 1.33% and Idea Cellular down by 1.27% were the top losers.

The Asian markets were trading in green; KOSPI Index increased 1.59 points or 0.08% to 1,920.16, FTSE Bursa Malaysia KLCI increased 2.48 points or 0.15% to 1,660.64, Shanghai Composite increased 25.97 points or 0.95% to 2,767.21, Taiwan Weighted increased 45.3 points or 0.54% to 8,411.16, Nikkei 225 increased 48.07 points or 0.3% to 16,188.41, Jakarta Composite increased 74.32 points or 1.6% to 4,732.65 and Hang Seng increased 475.4 points or 2.52% to 19,364.15.

The European markets were trading in green; UK’s FTSE 100 increased 72.29 points or 1.2% to 6,085.10, France’s CAC increased 76.84 points or 1.81% to 4,325.29 and Germany’s DAX increased 188.9 points or 2.02% to 9,520.38.