Benchmarks continue to trade sanguine; Realty stocks lead

Benchmark equity indices, after starting the New Year on promising note, continued to trade sanguine in early noon deals as investor continued to pour their funds into risky asset class such as equities in hopes of a greater reward. Asian markets remained closed, but reports that White House and congressional lawmakers have reached a deal to avoid the 'fiscal cliff' that would delay harsh spending cuts by two months, had kept the spirit upbeat at D-street right from the start of the trade. Further, Gains in rate sensitive Realty; high beta Metal  along with Capital Goods counters, also contributed much to the rally of Indian equity markets.

Thus trading in fine fettle, 30 share index, Sensex, gaining over century of points, is trading above 19500 psychological mark, while 50 share widely followed index, Nifty, on NSE, gaining  3 /4 percentage is at sniffing distance of 5950 crucial mark. Meanwhile, broader indices too gaining sufficient traction are outperforming frontline equity indices with fat margins. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1696:810, while 111 shares remained unchanged.

Further, benchmarks equity indices are expected to gain additional ground going further in the day as the US Senate on Tuesday, two hours after a December 31 deadline had lapsed, approved legislation aimed at averting the 'fiscal cliff' by stopping most tax hikes and across-the-board spending cuts that were due to begin with the new year.

The BSE Sensex is currently trading at 19567.59, up by 140.88 points or 0.73% after trading in a range of 19,588.46 and 19,508.93. There were 27 stocks advancing against 3 declines on the index.

The broader indices were trading in green; the BSE Mid cap index and Small cap index were holding up by 1.04% and 0.90% respectively.

Buying was witnessed across the space. Yet, the top gaining sectoral indices on the BSE were, Realty up by 2.25%, Metal up by 1.49%, Capital Goods up by 1.19%, Consumer Durables up by 1.04% and Bankex up by 1.03%/

The top gainers on the Sensex were Jindal Steel up by 2.26%, Hindalco Industries up by 2.03%, SBI up by 1.74%, BHEL up by 1.71% and Sterlite Industries up by 1.63%.

On the flip side, ONGC down by 0.17%, Infosys down by 0.13% and Wipro down by 0.03% were the only losers on the Sensex.

Meanwhile, India’s current account deficit (CAD) hits an all time high of 5.4% of gross domestic product or $22.3 billion in the July-September period of 2012, mainly on the back of declining exports. The CAD represents the difference between exports and imports after considering cash remittances and payment. CAD was $18.9 billion in the same period a year ago and $16.4 in the first quarter of 2012.

Merchandise exports recorded a negative growth of 12.2% during Q2 of 2012-13 as against an increase of 45.3% during corresponding quarter of 2011-12. Services exports again registered a lower growth of just 7.7% against a 10% growth recorded in the same quarter last year. On the other hand, imports registered slower pace of 4.8% growth during the quarter. As a result, sharp decline in exports than that in imports led to the widening of trade deficit to $48.3 billion during second quarter, from $44.5 billion a year ago.

While, addressing the balance of payment statement for second quarter, Reserve Bank of India (RBI) said that rise in import and moderating export growth raised net services receipts in second quarter, which led to the widening of the CAD. High current account deficit put adverse impact on rupee value and lowers foreign exchange reserves. India imports 75 percent of its crude oil requirement; high crude oil prices with rise in gold import had raised the CAD to 4.2 percent of GDP in the 2011-12.

However, government has taken various steps to check the import like levy more duties on gold import and channelize people's fund into equities and other financial instruments. With these efforts, foreign exchange reserves increased by $5.1 billion during the quarter, mainly reflecting depreciation of the US dollar against major international currencies. 

The S&P CNX Nifty is currently trading at 5,947.60, up by 42.50 points or 0.72% after trading in a range of 5,953.40 and 5,935.20. There were 43 stocks advancing against 7 declines on the index.

The top gainers of the Nifty were Reliance Infrastructure up by 4.40%, Jindal Steel up by 2.27%, JP Associates up by 2.17%, Hindalco Industries up by 2.15% and PNB up by 1.91%.

On the flip side, ONGC down by 0.54%, Hero MotoCorp down by 0.16%, Infosys down by 0.09%, Wipro down by 0.06% and Power Grid Corporation of India down by 0.04%, were the major losers on the index.

All the major Asian markets remained closed for trade today on account of the New Year.