Markets hold on to gains in early noon session

Indian equity bourses continued to trade firm in early noon session on the back of sustained buying by investors in the frontline blue chips counters amid firm cues from the regional counters. Sentiment got boost from report that India’s current account deficit (CAD) for the full fiscal 2015-16 narrowed to $22.1 billion or 1.1 percent of GDP, against $26.8 billio, or 1.3 percent of GDP, in 2014-15 on the back of contraction in the trade deficit. Also, CAD narrowed sharply to $0.3 billion or 0.1 percent of GDP, in the fourth quarter of 2015-16 from $7.1 billion or 1.3 percent, in the third quarter, on account of lower trade gap. The country’s trade deficit for the entire fiscal narrowed to $130.1 billion from $144.9 billion in 2014-15. Traders also took some encouragement with the Economic Affairs Secretary Shaktikanta Das’ statement that the FDI inflows in the current fiscal will top 15.3 percent rise in 2015-16 on the back of reforms and liberalisation of FDI norms. Stating that the CAD at 1.1 per cent of GDP is a ‘robust macro economic indicator’, he said efforts will continue on the reforms front. 

On the global front, Asian markets were trading mostly in green at this point of time, but were set for weekly losses as investors favored safe haven assets due to fears that Britain will vote to quit the European Union, though the killing of a pro-EU lawmaker was seen swaying sentiment toward the “Remain” camp. Back home, in scrip specific development, share of Max Financial Services soared 13% on reports that the HDFC Life and Max Life are in talks to create the country's biggest private life insurer. On the other hand, sugar companies such as Shree Renuka Sugar, Bajaj Hindusthan, Dhampur Sugar, Sakthi Sugar and Dwarkesh Sugar succumbed to selling pressure after government yesterday imposed 20 percent customs duty on sugar exports to boost domestic supply and check prices which are ruling high at Rs 40/kg.

The BSE Sensex is currently trading at 26640.67, up by 115.21 points or 0.43% after trading in a range of 26617.82 and 26730.55. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.21%, while Small cap index up by 0.53%.

The top gaining sectoral indices on the BSE were Realty up by 2.10%, Auto up by 0.72%, Bankex up by 0.44%, PSU up by 0.42% and FMCG up by 0.36%, while Power down by 0.06% and Capital Goods down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.87%, Tata Motors up by 1.77%, Axis Bank up by 1.67%, HDFC up by 1.39% and Maruti Suzuki up by 1.36%. On the flip side, Tata Steel down by 1.27%, Hindustan Unilever down by 0.72%, Sun Pharma Inds. down by 0.67%, Infosys down by 0.52% and Larsen & Toubro down by 0.44% 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 8164.65, up by 23.90 points or 0.29% after trading in a range of 8157.35 and 8195.25. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Tata Motors - DVR up by 2.35%, Coal India up by 1.79%, Tata Motors up by 1.71%, Axis Bank up by 1.62% and HDFC up by 1.37%. On the flip side, Bharti Infratel down by 2.35%, Tata Power down by 2.16%, Tata Steel down by 1.36%, Aurobindo Pharma down by 1.13% and Sun Pharma down by 0.82% were the top losers.

Asian markets were trading mostly higher; KOSPI Index increased 1.41 points or 0.07% to 1,953.40, FTSE Bursa Malaysia KLCI increased 6.4 points or 0.4% to 1,621.30, Shanghai Composite increased 10.81 points or 0.38% to 2,883.63, Hang Seng increased 70.88 points or 0.35% to 20,109.30, Taiwan Weighted increased 73.94 points or 0.87% to 8,568.08 and Nikkei 225 increased 165.52 points or 1.07% to 15,599.66, while Jakarta Composite decreased 1.86 points or 0.04% to 4,812.53.