Nifty holds 5,700 mark; auto, metal stocks on buying spree

Tracking global rally, Indian equity markets continued trading strong, as investors were on a buying spree amid hopes that government will push forward reforms and will take all necessary efforts to bring down fiscal deficit. The finance minister’s statement that the government is keen on reining in the alarming fiscal deficit and attract investments also boosted investors’ sentiments. The BSE benchmark rallied 248 points, while NSE benchmark rose 73 points. Meanwhile, government’s decision to stick to its borrowing programme, further helped markets to hold gains. In currency markets, Indian rupee hits 20 week’s high against dollar as global risk outlook enhanced. On sectoral front, all were trading in green. Expecting some more monetary easing from central bank, investors are thronging front line realty and automobile counters. Select bank stocks too have posted strong gains. In global markets, all Asian shares were trading in green, barring Nikkei, after Spain unveiled a crisis budget, which many saw as a forerunner to the country seeking a bailout. Back home, the market breadth favoring positive trend; there were 1,688 shares on the gaining side against 833 shares on the losing side while 125 shares remain unchanged.

The BSE Sensex is currently trading at 18,828.27 up by 248.77 points or 1.34% after trading in a range of 18,869.94 and 18,698.51. There were 29 stocks advancing against 1 decline on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.28% and Small cap index was up by 0.96%.

The top gainers on the BSE sectoral space were, Auto up by 2.34%, Metal up by 2.19%, Realty up by 1.78%, Power up by 1.56% and Oil & Gas up by 1.37%, while, there was no loser on the sectoral space.

The top gainers on the Sensex were Tata Motors up by 3.95%, Hindalco Industries up by 3.13%, Tata Steel up by 2.83%, Tata Power up by 2.82% and TCS up by 2.56%. On the other hand, HDFC Bank down by 0.06% was only the loser on the Sensex.

Meanwhile, amid the growing concern of rising fiscal deficit the government has retained its H2FY13 borrowing target and will borrow Rs 2 lakh crore in remaining period of the current fiscal. The government budgeted to borrow Rs 5.7 lakh crore this fiscal, or 5.1 per cent of the Gross Domestic Product (GDP), including repayments. In the first six months, it has already borrowed Rs 3.7 lakh crore.

Though, the finance ministry admitted that the fiscal deficit could overshoot the target of 5.1 per cent of GDP but hoping that government’s recent efforts to cut down spends would show results, it stick to its Budgeted borrowing plan of Rs 2 lakh crore for the second half of the fiscal. In the October-March period last financial year, it had borrowed Rs 2.6 lakh crore.

Finance ministry is expecting the fiscal deficit to be maximum of 5.2 to 5.3 per cent, which according to it is doable, however the general expectation is that it may rise to 5.8 per cent of GDP and the government would have to announce extra borrowing to meet that, as the government is unlikely to cut further spending with slower tax revenue generation amid weaker domestic growth.

Although the government is looking to reduce its subsidy burden, attract foreign flows and sell stakes in state owned companies but its previous policies of high subsidy expenditure has led to overshooting of government finances and to meet that the government has been relying on market borrowing, which has been crowding out private investors and lowering growth prospects. 

The S&P CNX Nifty is currently trading at 5,722.80, up by 73.30 points or 1.30% after trading in a range of 5,735.15 and 5,683.45. There were 46 stocks advancing against 4 declines on the index.

The top gainers of the Nifty were JP Associates up by 4.22%, Tata Motors up by 3.96%, Hindalco up by 3.26%, Tata Steel up by 2.80% and Jindal Steel up by 2.69%. While, Ranbaxy down by 0.39%, BPCL down by 0.39%, HDFC Bank down by 0.32% and HCL Tech down by 0.22% were the losers on the index.

Most of the Asian indices were trading in green, Shanghai Composite was up by 0.91%, Kospi Composite Index was up by 0.38%, Taiwan Weighted was up by 0.41%, Hang Seng was up by 0.42%, Jakarta Composite was up by 0.35%, Straits Times was up by 0.20% and KLSE Composite was up 0.58% while Nikkei 225 down by 0.89% was the only loser.