Indian equities continue firm trade; Nifty above 5,900 mark

Indian equities pared gains but continued its firm trade hovering near the lowest point of the day in the late afternoon session on account of buying in frontline counters and taking cues from European counterparts. The consistent buying among rate-sensitive sectors like Auto and Realty stocks on hopes of policy easing by the Reserve Bank of India in January monetary policy after positive undertone in Tuesday’s review supported the mood on the street. The sentiments were also supported by rise in banking stocks which edged higher after government cleared the banking bill paving way for foreign investments in the sector and establishment of new private banks. Traders were seen piling some position in Auto, Metal and Health Care sectors, while selling was witnessed in Capital Goods, FMCG and Power sectors. In the scrip specific development, Tata Consultancy Services was seen trading in green after Morgan Stanley upgraded the stock to ‘overweight’ from ‘equal-weight’ and raised its target price on the stock. Sun Pharmaceutical Industries is trading firm after touching a record high on reports that foreign research house Morgan Stanley is overweight on the stock. Amara Raja Batteries was trading in green after the foreign research firm Nomura reiterated a buy rating on the stock. Eros International Media was trading firm after promoter Eros Worldwide FZ LLC announced Offer for Sale (OFS). Suzlon Energy and Gujarat Fluorochemicals were trading in red after the National Stock Exchange has decided to exclude both from F&O segment with effect from March 01, 2013.

On the global front, all the Asian markets were trading in green barring Jakarta Composite and Shanghai Composite while the European markets were too trading on optimistic note. The European Central Bank President Mario Draghi stated that the establishment of the Single Supervisory Mechanism will contribute to restoring confidence in the banking sector across the euro area. Draghi reiterated that economic weakness in the euro area is to extend into next year with a very gradual recovery in the second half of the year. Besides, the International Monetary Fund approved the disbursement of $1.17 billion to Ireland under the bailout program, bringing total disbursements under the Extended Fund Facility to about €19.37 billion or about $25.49 billion. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,900 and 19,400 levels respectively. The market breadth on BSE was positive in the ratio of 1602:1224 while 131 scrips remain unchanged.

The BSE Sensex is currently trading at 19,425.98 up by 61.23 points or 0.32% after trading in a range of 19,516.02 and 19,419.76. There were 24 stocks advancing against 6 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.43% and Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were, Auto up by 1.60%, Metal up by 1.22%, Health Care up by 1.13%, Oil & Gas up by 1.00% and IT up by 0.79%, while, Capital Goods down by 0.72%, FMCG down by 0.50% and Power down by 0.04% were the only losers on the index.

The top gainers on the Sensex were Tata Motors up by 2.82%, ONGC up by 2.73%, Bajaj Auto up by 2.29%, Sun Pharma up by 2.22% and Maruti Suzuki up by 2.20%.

On the flip side, HDFC was down by 1.75%, ICICI Bank was down by 1.28%, L&T was down by 1.27%, ITC was down by 1.24% and NTPC was down by 0.61% were the top losers on the Sensex.

Meanwhile, with the government firmly committed to the reforms agenda, it is expected that the government will soon announce incentives for exporters to cushion the decline in exports due to contracting demand from abroad. While addressing the 2nd India-Asean Business Fair and Business Conclave, on the sidelines Commerce Minister Anand Sharma said ‘we have had intense scrutiny, and we have looked at the sectors that are weak, also the regions in the world where the demand has contracted ... and whatever possible, given the constraint of resources, we are seriously considering (incentives). We shall take a final view very shortly.’

As per the minister, there are two reasons for concerns, first the contraction of demand in some of the major markets globally, as a result of which exports have fallen and have impacted the industrial productivity and second the trade account deficit. He added that the commerce ministry is doing everything to push the exports and to keep the trade account deficit within manageable limits. By adding further he said additional sectors may be brought under the interest subvention scheme of 2 per cent for exporters.

In April-November period of this year, exports registered a fall of 5 per cent to $189.2 billion and trade deficit rose to $129.5 billion from $122.6 billion reported in the same period of last financial year. Till now, Indian’s trade data of current fiscal has dashed the optimism of the commerce department that the trade deficit would be lower in this financial year against the $185 billion in previous fiscal.

The S&P CNX Nifty is currently trading at 5,912.40 up by 15.60 points or 0.26% after trading in a range of 5,939.40 and 5,910.80. There were 37 stocks advancing against 12 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were IDFC up by 2.73%, ONGC up by 2.67%, Tata Motors up by 2.56%, Sun Pharma up by 2.50% and Bajaj-Auto up by 2.31%. On the flip side, HDFC down by 1.82%, L&T down by 1.36%, ICICI Bank down by 1.36%, Cairn India down by 1.30% and Axis Bank down by 1.25% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 0.57%, KLSE Composite added 0.40%, Straits Times was up by 0.03%, Nikkei 225 surged 2.39% and Taiwan Weighted was up by 0.44%. On the flip side Jakarta Composite slipped 0.90% and Shanghai Composite lost 0.01%.

KOSPI Composite remained shut for the trade today.

The European markets were trading in green with, France’s CAC 40 added 0.15%, Germany’s DAX ascended 0.10% while the United Kingdom’s FTSE 100 jumped 0.19%.