Benchmarks continue to trade in green in late morning session

Indian equity benchmark indices continued their firm trade in the late morning session as fresh buying by investors led to widespread gains, driven by lower current account deficit and trade gap in the last fiscal. India's current account deficit (CAD) declined sharply to $0.3 billion (0.1% of Gross Domestic Product) in the fourth quarter of ended March 2016 (FY16) from $ 7.1 billion (1.3%), in third quarter ended December 2015, on account of lower trade gap.  Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Indian rupee appreciated by 8 paise to 67.13 against the US dollar in early trade on fresh selling of the American currency by exporters and bankers. Some support also came with Economic Affairs Secretary Shaktikanta Das’ statement that FDI inflows in the current fiscal will top 15.3 per cent rise in 2015-16 on the back of reforms and liberalisation of FDI norms. However, gains remained capped with the report that India's monsoon deficit has widened to 25% since the beginning of this month as rainfall in the past day was less than half of the normal level, increasing the anxiety of farmers although forecasters say that heavy showers are just a few days away.

On the global front, Asian stock markets were trading mostly in green in early trade, as investors went for bargain hunting after US stocks snapped a five-day losing streak to close higher overnight. Japan's Nikkei share average rebounded and recovered from four-month lows after the yen took a breather from its recent strong gains, lifting all sectors into positive territory. However, dismal aura surrounding the market amid concerns over key central bank decisions and the UK's upcoming June 23 referendum vote on its future within the European Union.

Back home, all BSE sectoral indices were trading in the green, among them, Realty index gained the most by 2.43 per cent, followed by Auto 0.65 per cent, Banking 0.56 per cent and FMCG 0.43 per cent. In scrip specific development, Shares of V-Guard Industries rallied after the company announced that its board approved the proposal for splitting of equity shares in the ration of 1:10. Carborundum Universal gained after RBI notified that the restrictions placed on the FII purchase of shares of Carborundum are withdrawn with immediate effect.

The market breadth on BSE was positive, out of 2196 stocks traded, 1342 stocks advanced, while 720 stocks declined on the BSE.

The BSE Sensex is currently trading at 26661.12, up by 135.66 points or 0.51% after trading in a range of 26617.82 and 26730.55. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index was up by 0.65%.

The top gaining sectoral indices on the BSE were Realty up by 2.43%, Auto up by 0.65%, Bankex up by 0.56%, FMCG up by 0.43% and Metal up by 0.41%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Coal India up by 1.68%, HDFC up by 1.64%, Axis Bank up by 1.57%, Maruti Suzuki up by 1.44% and Tata Motors up by 1.16%. On the flip side, Tata Steel down by 0.89%, Sun Pharma down by 0.77%, Infosys down by 0.56%, Hindustan Unilever down by 0.43% and Lupin down by 0.34% were the top losers.

Meanwhile, giving a big relief to the government, India’s current account deficit (CAD), difference between the value of all imports and the value of all exports, narrowed to its lowest level in seven years in the quarter ended March 2015-16. India’s current account deficit had narrowed to $0.3 billion or 0.1 per cent of GDP in Q4 of 2015-16, significantly lower than $7.1 billion or 1.3 per cent of GDP in third quarter of 2015-16 and marginally lower than $0.7 billion 0.1 per cent of GDP in the same period last fiscal. The contraction in CAD was primarily on account of a lower trade deficit $24.8 billion than in Q4 of last year $31.6 billion and $34.0 billion in the preceding quarter.

As per the data released by Reserve Bank of India (RBI), for the entire 2015-16 fiscal, CAD stood at 22.1 billion or 1.1 per cent of the GDP as against 26.8 billion or 1.8 per cent for 2014-15, on the back of contraction in the trade deficit. India’s trade deficit narrowed to $130.1 billion in 2015-16 from $144.9 billion in 2014-15.

Meanwhile, the Balance of Payments (BoP) stayed in positive territory with accretion of $3.3 billion to India's Foreign exchange reserves in Q4 2015-16. The overall BoP during the fiscal FY16 moderated to $17.9 billion from $ 61.06 billion in 2014-15. During the fiscal, there was decline in net invisible receipts, reflecting moderation in both net services earnings and private transfer receipts.

In the year 2015-16, Net invisible receipts declined, primarily reflecting moderation in both net services earnings and private transfer receipts. Net FDI inflows during 2015-16 $36.0 billion rose sharply by 15.3 per cent over the level in 2014-15. Portfolio investment, however, recorded a net outflow $4.5 billion in 2015-16 as against a net inflow of $40.9 billion last year. In 2015-16, there was an accretion of $17.9 billion to foreign exchange reserves as compared with $61.4 billion in 2014-15.

Economic affairs secretary Shaktikanta Das has said that a CAD at 1.1% of GDP is yet another robust macroeconomic indicator and hoped that FDI inflows in the current fiscal will top 15.3 per cent rise in 2015-16 on the back of reforms and liberalisation of FDI norms announced in November 2015.

The CNX Nifty is currently trading at 8172.40, up by 31.65 points or 0.39% after trading in a range of 8157.35 and 8195.25. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Tata Motors - DVR up by 1.73%, Coal India up by 1.71%, Axis Bank up by 1.62%, HDFC up by 1.60% and Maruti Suzuki up by 1.41%. On the flip side, Bharti Infratel down by 2.76%, Tata Power down by 1.57%, Tata Steel down by 1.18%, Sun Pharma down by 0.95% and Bank Of Baroda down by 0.66% were the top losers.

Asian markets were trading mostly in green; KOSPI Index gained 0.15%, FTSE Bursa Malaysia KLCI increased 0.4%, Shanghai Composite jumped 0.75%, Taiwan Weighted surged 0.69%, Hang Seng added 0.68% and Nikkei 225 was up by 1.06%. On the other hand, Jakarta Composite declined by 0.04%.