Markets continue firm trade in early noon session

Indian equity benchmarks continued to maintain the uptrend in the early noon session, on account of sustained buying by funds and retail investors in the blue chip counters, amid firm global cues. Sentiment got boost after the Paul Cashin -- head of the International Monetary Fund (IMF) team for India, has said that the collapse in global oil prices is a large windfall gain for India and it has made room for more spending on goods and services, helped improve the external and fiscal positions and allowed a sharp decline in inflation. IMF also projected India's GDP growth from 7.3% in this fiscal year to 7.5% next year. Appreciation in the rupee too supported the markets. Hardening for the fifth consecutive day, the rupee appreciated another 17 paise to trade at a 7-week high of 67.36 against the dollar on sustained bouts of selling of the US currency by banks and exporters. However, gains remained capped on the report that the growth in India's services industry slowed sharply in February as rising prices lead to a slight deceleration in demand. The Nikkei/Markit Services Purchasing Managers' Index (PMI) sank to 51.4 in February from January's 54.3, but chalked up its eighth straight month above the 50-level that distinguishes growth from contraction.

On the global front, Asian stocks rose to an eight-week high, as emerging-market currencies strengthened and oil climbed toward $35 a barrel, buoyed by improving US economic data and prospects for further stimulus in China. Back home, in scrip specific development, shares of Inox Wind were trading higher over 10%, extending its previous day’s gain after the company has bagged an order for a 20 MW wind power project from PTC Energy, a 100% subsidiary of PTC India. Bharat Forge gained gained over 3% on the BSE after state-owned Life Insurance Corporation (LIC) raised its stake in the company by 2.02% via purchase of 47.12 lakh shares in the open market.

The BSE Sensex is currently trading at 24459.62, up by 216.64 points or 0.89% after trading in a range of 24383.28 and 24518.54. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in red and green; the BSE Mid cap index was down by 0.02%, while Small cap index up by 0.67%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.53%, Metal up by 2.14%, Auto up by 1.58%, Consumer Durables up by 1.27% and IT up by 1.15%, while Bankex down by 0.28% and FMCG down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 5.50%, Tata Motors up by 4.56%, Tata Steel up by 4.06%, Larsen & Toubro up by 3.92% and Adani Ports &Special up by 2.65%. On the flip side, ICICI Bank down by 1.59%, SBI down by 0.55%, Lupin down by 0.51%, Maruti Suzuki down by 0.41% and ITC down by 0.28% were the top losers.

Meanwhile, praising the budget 2016 proposals, the multilateral lending agency the International Monetary Fund (IMF) has projected a robust growth rate of 7.3 percent for the country this fiscal, picking up to 7.5 percent next year, supported by stronger domestic demand, and has said that the measures are aimed at increasing public infrastructure spending, rationalising subsidies, creating more flexible labour and product markets as well as enhancing financial inclusion.

Though, the agency's protections are lower than the government's estimate of 7.6 percent growth in 2015-16 and unchanged from its earlier projection at the same rate in January, but it said that India has a very good outlook at the present time. It added that India certainly benefited from low oil and energy prices, one of the worlds largest oil importers and that's raised the real income of all Indians. In its report IMF said that the economy is on a recovery path, helped by a large terms of trade gain (about 2.5 percent of GDP), positive policy actions and reduced external vulnerabilities.

However, it also raised concern and said that main internal risk to a country like India comes from a weak corporate and bank balance sheet. There has been a big increase in non-performing loans in the present time, due to the previous shortfall in investment. It also noted that global financial market volatility, a potential further deterioration in exports, and strains in bank and corporate balance sheets could weigh on India’s growth prospects. It added that high fiscal deficits and upside risks to inflation constrain the scope for countercyclical policies.

It also cautioned that though balance of economic risks has improved, they remain tilted to the downside. These included the impact of intensified volatility on global financial markets, including from surprise unexpected US monetary policy moves or China`s economic slowdown.

The CNX Nifty is currently trading at 7428.20, up by 59.35 points or 0.81% after trading in a range of 7406.05 and 7447.45. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were BHEL up by 5.82%, Tata Motors up by 4.62%, Tata Steel up by 4.07%, Larsen & Toubro up by 4.03% and Hindalco up by 3.14%. On the flip side, Zee Entertainment down by 2.38%, Yes Bank down by 1.60%, ICICI Bank down by 1.48%, Bank of Baroda down by 1.45% and PNB down by 1.40% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 4.13 points or 0.14% to 2,853.81, FTSE Bursa Malaysia KLCI increased 4.84 points or 0.29% to 1,695.87, KOSPI Index increased 10.75 points or 0.55% to 1,958.17, Jakarta Composite increased 20.3 points or 0.42% to 4,856.50, Taiwan Weighted increased 67.74 points or 0.79% to 8,611.79 and Nikkei 225 increased 125.88 points or 0.75% to 16,872.43, while Hang Seng decreased 117.5 points or 0.59% to 19,885.99.