Benchmarks trade in fine fettle; Sensex trades above 28700 mark

Extending their early gains, Indian equity markets continued to trade with strength in afternoon session on emergence of buying by funds and retail investors, amid a firm trend in Asian markets after the Federal Reserve kept interest rates unchanged but hinted at the possibility of a rate hike later this year.  The sentiments were on optimistic side with report that country’s current account deficit (CAD) narrowed to $ 0.3 billion, or 0.1 percent of GDP, in the first quarter of 2016-17, significantly lower than $ 6.1 billion or 1.2 percent of GDP in Q1 of 2015-16, on account of lower trade gap. Further, appreciation in Indian rupee too supported the sentiments. The rupee strengthened by 19 paise to 66.83 against the US dollar after the US Federal Reserve left interest rates unchanged. In scrip specific development, ICICI Bank rallied more than 2 percent after ICICI Prudential Life Insurance's Rs 6,000 crore mega initial public offering (IPO) got subscribed over 10 times. Godrej Properties added over a percent after acquiring a 12-acre land parcel in Bengaluru to develop a residential housing project.

On the global front, Asian markets were trading in green, following the positive lead overnight from Wall Street after the Federal Reserve kept interest rates unchanged and hinted at a rate hike before the end of the year. Back home, the BSE Sensex is currently trading at 28732.90, up by 225.48 points or 0.79% after trading in a range of 28693.07 and 28871.92. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.81%, while Small cap index added 0.68%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.31%, Bankex up by 1.19%, PSU up by 1.17%, Power up by 1.16% and Auto up by 1.15%, while IT down by 0.26% and TECK down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.43%, NTPC up by 2.11%, Power Grid Corpn. up by 1.94%, Reliance Industries up by 1.93% and Adani Ports &Special up by 1.85%. On the flip side, Lupin down by 1.13%, Hindustan Unilever down by 0.82%, TCS down by 0.77%, Axis Bank down by 0.67% and Wipro down by 0.56% were the top losers.

Meanwhile, India’s current account deficit (CAD), difference between the value of all imports and the value of all exports, has improved significantly in the quarter ended June 2016-17 to decades low. India’s current account deficit had narrowed to $ 0.3 billion or 0.1 per cent of GDP in the June quarter, significantly lower than $ 6.1 billion or 1.2 per cent of GDP in Q1 of 2015-16. The contraction in the CAD was primarily on account of a lower trade deficit $ 23.8 billion than in Q1 of last year $ 34.2 billion and $ 24.8 billion in the preceding quarter, supported by slump in commodity prices.

As per the data released by Reserve Bank of India (RBI), India’s trade deficit narrowed to $ 23.8 billion in 2016-17 from $34.2 billion in 2015-16. The Balance of Payments (BoP) remained in surplus but shrank 40% to $ 6.9 billion from $ 11.4 billion in the same period a year ago due to decline in foreign direct investments. The remittances declined, FDI has moderated and capital inflows were not that strong, however in second quarter the inflows have been strong.

In the year 2016-17, net services receipts declined to $ 15.77 billion from $ 17.75 billion a year ago due to a fall in net earnings on account of travel, financial services and other business services.  Net FDI inflows during the 2016-17 stood at $ 4.1 billion from $10.0 billion in Q1 of 2015-16. On the other hand, portfolio investment, recorded a net inflow of $ 2.1 billion in Q1 of 2016-17 as against a marginal $ 50 million net outflow in the year-ago period and an outflow of $ 1.5 billion in the preceding quarter, primarily reflecting net inflow in the equity component.

The CNX Nifty is currently trading at 8850.65, up by 73.50 points or 0.84% after trading in a range of 8837.80 and 8893.35. There were 40 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 3.72%, Indusind Bank up by 3.26%, Hero MotoCorp up by 2.48%, Hindalco up by 2.41% and NTPC up by 2.11%. On the flip side, Tech Mahindra down by 1.38%, Lupin down by 1.25%, TCS down by 0.98%, Hindustan Unilever down by 0.89% and Idea Cellular down by 0.89% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 5.52 points or 0.33% to 1,664.25, Taiwan Weighted was up by 6.76 points or 0.07% to 9,235.26, KOSPI Index rose 13.71 points or 0.67% to 2,049.70, Shanghai Composite increased 13.83 points or 0.46% to 3,039.70, Jakarta Composite was up by 50.85 points or 0.95% to 5,393.44 and Hang Seng increased 104.79 points or 0.44% to 23,774.69.