Across the board buying activity keeps trend firm at D-street

Across the board buying activity has kept the trade firm at D-street even after both the Lok Sabha and the Rajya Sabha remained paralyzed over the issue of FDI in retail for the fourth day on Tuesday. Sanguine trend in Indian equity markets could be mainly attributed to Moody’s report, which said India’s rating outlook is stable because of the country’s strong economic growth along with high savings and investment rates. Positive global developments too are adding to the positives. In the firm session of trade, 30 share barometer index, Sensex, is  comfortably sailing past 18700 level, while widely followed index, Nifty, is hovering above the crucial 5700 mark.  The broader indices too have accumulated significant gains, both Midcap and Smallcap indices are trading with gains of over 3 /4 percent.

On the global front, Asian pacific shares were trading higher on Tuesday after euro-zone ministers reached a deal to release the next tranche of bail-out funds to Greece. The euro group said it was committed to providing support to Greece until it regains market access. The deal reached targeted a Greek debt-to-GDP ratio of no more than 124% by 2020 -- slightly softer than the International Monetary Fund's previous stance of no higher than 120%. Meanwhile, European stock index futures too were signalling higher start.

Back on the home turf, although buying was broad-based, Realty, Consumer Durable and Banking shares were enticing maximum traction. In other sector specific activity, all telecom stocks, namely Idea Cellular, Bharti Airtel, Reliance Communications, Tata Teleservices, and MTNL, rang-loud after Reserve Bank of India (RBI) has relaxed overseas borrowing rule for only successful bidders in the recently concluded airwaves auction, making it easier for them to raise money to pay the government. Additionally, even Capital Goods gained traction, after the Minister of Heavy Industry and Public Enterprises Praful Patel pitched for incentivizing capital goods, particularly for exports. The market breadth favoring positive trend; there were 1599 shares on the gaining side against 911 shares on the losing side while 116 shares remain unchanged.

The BSE Sensex is currently trading at 18765.59, up by 228.58 points or 1.23 %. There were 29 stocks advancing against only 1 decline on the index.

The broader indices were trading in green; the BSE Mid cap up and Small cap index were up by 1.07 % and 0.71% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 2.42 %, CD up by 2.24 %, Bankex up by 1.57 %, FMCG up by 1.36 % and Metal up by 0.82%, While, there were no losers on the index.

The top gainers on the Sensex were HDFC up by 2.67 %, HDFC Bank up by 2.62 %, Cipla up by 2.49 %, Sterlite Inds up by 2.29 % and Hindalco Industries up by 2.14 %. On the flip side, NTPC was down by 0.28% was the sole losers on the Sensex.

Meanwhile, global ratings agency Moody's on country's high savings and investment rates has retained India’s sovereign Baa3 ratings stable in its annual credit analysis on the country, supported by credit strengths which include a large, diverse economy, strong GDP growth as well as savings, and investment rates that exceed emerging market averages.

The reaffirmation of the outlook comes as a relief to the government which is struggling to keep the reform process on track amid stiff political opposition. The stable outlook on India's rating is based on Moody's expectation that the economy's structural strengths, a high household savings rate and relatively competitive private sector will ultimately raise the GDP growth rate from around 5.4 per cent in FY 2013 to 6 per cent or higher in FY 2014.

However, the rating is controlled by the credit challenges posed by India's poor social and physical infrastructure, high government deficit and debt ratios, recurrent inflationary pressures and an uncertain operating environment. During last month, Standard & Poor's warned India still faced a one-in-three chance of a credit rating downgrade over the next 24 months, although it said a series of reform steps launched in September had slightly improved the country's prospects.

However, Moody's cautions that unanticipated domestic political turmoil, a further worsening in global growth and financial conditions, or a surge in food and other commodity prices could all affect the pace and timing of the recovery.

S&P CNX Nifty is currently trading at 5,701.15, up by 65.25 points or 1.16%, after touching a high and a low of 5,710.70 and 5,658.00 respectively. There were 47 stocks advancing against 12 stocks were declining and 1 remain unchanged on the index.

The top gainers of the Nifty were JP Associates up by 4.21 %, BPCL up by 2.82 %, HDFC up by 2.71 %, HDFC Bank up by 2.70 % and Cipla up by 2.41 %. On the flip side, Power Grid down by 0.87% and NTPC down by 0.50%, were the only losers on the index.

Most of the Asian equity indices were trading in the green; Hang Seng up by 0.17%, Nikkei 225 up by 0.37%, Straits Times was up by 0.15%, Seoul Composite was up by 0.87%, Taiwan Weighted was up by 0.31% On the flip side, Jakarta Composite was down by 0.40%, KLSE Composite was down by 0.59% and Shanghai Composite was down by 1.23%.