Markets continue to trade firm in early noon session

Indian equity benchmarks continued to trade firm in early noon session, on account of sustained buying by funds and retail investors in the frontline blue chips counters. The rally in the banking shares after the government announced a steep cut in interest rates on small savings schemes too supported the market sentiment. Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading were up by 0.85% and 0.95% respectively. Meanwhile, jewellery stocks are trading higher after the 18-day long strike by jewellers ended on Saturday night. 

On the global front, Asian markets were trading mostly in red, with many market watchers predicting a quiet week ahead in the absence of major economic data from the U.S. and China, and with many markets off for Good Friday. Back home, both the Sensex and Nifty were trading above their crucial 25,100 and 7,600 level, respectively. In scrip specific development, shares of IDBI Bank were trading higher, on reports that International Finance Corporation (IFC), a lending arm of the World Bank, and TPG Capital are eyeing stake in the bank.

The BSE Sensex is currently trading at 25104.00, up by 151.26 points or 0.61% after trading in a range of 24988.27 and 25143.96. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.85%, while Small cap index up by 0.95%.

The top gaining sectoral indices on the BSE were Realty up by 1.77%, Capital Goods up by 1.35%, FMCG up by 1.31%, Consumer Durables up by 1.08% and Bankex up by 1.03%, while IT down by 0.25% and TECK down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.20%, SBI up by 2.12%, Bharti Airtel up by 2.10%, Hindustan Unilever up by 1.73% and Larsen & Toubro up by 1.71%. On the flip side, Asian Paints down by 2.39%, Dr. Reddys Lab down by 1.20%, Hero MotoCorp down by 1.16%, BHEL down by 0.75% and GAIL India down by 0.67% were the top losers.

Meanwhile, amid the increased prospect of a lower interest rate regime and hopes of the Reserve Bank of India (RBI) cutting rates in its monetary policy review on April 5, Jayant Sinha, Minister of State for Finance, putting the ball in RBI’s court has said that what we have done in the Budget is to create space for the Reserve Bank to cut rates.

Sinha said that at this time, if you look at the fiscal and monetary side, you will find that the fiscal side is much tighter. There is a lot more monetary space as inflation pressures are subdued. Also, there is weak aggregate global demand and, lastly, central banks around the world are following unconventional monetary policies.

Talking about the Fiscal Responsibility and Budget Management (FRBM) Act and fiscal targets going forward, he said that FRBM is a very important aspect of India’s fiscal management by setting benchmarks. The benchmark is that the fiscal deficit at both the Centre and the States’ level should be at three per cent. FRBM was put in place in 2003 and in 2004, the UPA government came and the first thing they did was to press pause on the FRBM. Thereafter, every year the FRBM was revised and the three per cent target was never achieved. So, the FRBM targets were observed more in breach than observance.  Our thinking on fiscal target is to be much more dynamic and flexible, to be counter-cyclical, if required.

The CNX Nifty is currently trading at 7647.25, up by 42.90 points or 0.56% after trading in a range of 7617.70 and 7662.55. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 3.48%, PNB up by 2.73%, Bharti Airtel up by 2.31%, ITC up by 2.22% and Ambuja Cement up by 2.18%. On the flip side, Asian Paints down by 2.32%, Dr. Reddys Lab down by 1.14%, Wipro down by 1.13%, Hero MotoCorp down by 1.12% and BHEL down by 0.93% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 33.29 points or 0.16% to 20,638.34, Jakarta Composite decreased 11.62 points or 0.24% to 4,874.09, FTSE Bursa Malaysia KLCI decreased 7.16 points or 0.42% to 1,709.18 and KOSPI Index decreased 2.36 points or 0.12% to 1,989.76. While Taiwan Weighted increased 1.99 points or 0.02% to 8,812.70 and Shanghai Composite increased 40.33 points or 1.36% to 2,995.48,