Benchmarks pare gains after Sensex hitting 20,000 mark

Indian equity benchmarks, after making a gap-up opening, have pared their initial gains as investors opted to book profit after the last session’s jubilant rally. Though, Sensex hit the psychological mark of 20,000 in initial few minutes of trade led by gains in technology, realty and oil & gas sectors as sentiment turned bullish in Indian equities after the government deferred controversial GAAR implementations by two years. Some jubilation also came in from IT space as stocks like TCS, Wipro and Tech Mahindra edged higher following better-than-expected results by Tata Consultancy Services. The company beat street estimates by reporting a profit after tax of Rs 3,550 crore for the third quarter against net profit of Rs 2,803 crore in the same quarter of the previous fiscal.

Disappointing cues from global market took their toll on domestic bourses due to which Sensex came below its crucial 20,000 mark. The US markets closed mostly lower overnight, after Apple Inc. declined on reports that the company had cut iPhone production plans on sales coming below expectations, pushing two of the three benchmark indexes into negative territory while, most of the Asian counters were trading in the red at this point of time. However, Japanese Nikkei share average climbed about a percent to 32-month high on Tuesday, driving the benchmark further into overbought territory, as persistent weakness in the yen boosted demand for exporters’ shares.

Back home, market continued to trade in the positive trajectory as sentiments were supported by sugar stocks like Rana Sugars, Shree Renuka Sugar, Dhampur Sugar and Triveni Engineering & Industries edged higher as the government liberalised the procedure for export of pharmaceutical grade and specialty sugar. On the sectoral front, capital goods witnessed the maximum gain in trade followed by realty and auto while, fast moving consumer goods remained the sole loser on the BSE sectoral space. The broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 1,038 shares on the gaining side against 586 shares on the losing side while 62 shares remain unchanged.

The BSE Sensex opened at 19,999.82; about 93 points higher compared to its previous closing of 19,906.41, and has touched a high and a low of 20,007.09 and 19,910.91 respectively.

The index is currently trading at 19,937.47, up by 31.06 points or 0.16%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a positive start with 61.57% stocks advancing against 34.76% declines. The broader indices too were outperforming with benchmarks; the BSE Mid cap and Small cap indices rose 0.59% and 0.38% respectively.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.00%, Realty up by 0.97%, Auto up by 0.82%, Consumer Durables up by 0.68% and TECk up by 0.42%. While, FMCG down by 0.50% were the sole losers on the index.

The top gainers on the Sensex were TCS up by 2.45%, L&T up by 1.26%, Maruti Suzuki up by 1.23%, Tata Motors up by 1.19% and Bajaj Auto up by 1.11%.

On the flip side, Infosys was down by 0.95%, Hindustan Unilever was down by 0.89%, ITC was down by 0.85%, Hero Moto Corp was down by 0.76% and Coal India was down by 0.55% were the top losers on the Sensex.

Meanwhile, Industry body Assocham has said that India’s fiscal situation may worsen due to rising inflation, decline in economic growth and global slowdown. Expressing its views on deteriorating macro-economic indicators, it said that due to little margin for taking another counter-cyclical fiscal measures, India’s faltering growth coupled with unresponsive inflation can push the country economy to a worse situation.

Assocham said that continued uncertainty amid global economic conditions and widening infrastructure deficiencies are the major challenges for India’s growth story. It also added that with the expectation of public finances remaining in great stress, fiscal deficit may even touch 6.1 percent of GDP in the current financial year; if appropriate action is not taken in time then India is likely to be in situation worse than the one in 1991.

Industry body has recommended that current account deficit needs to be financed through external capital inflows because the government funding of the deficit through domestic sources tends to cause inflation. By adding further it said ‘Deviation from the Fiscal Responsibility and Budget Management Act (FRBM) Act by the Government has resulted in deteriorated fiscal health of the public finances’. According to it, the existing industry and business conditions suggests that there would be a likely shortfall in gross tax revenues by around Rs 60,000 crore in the current fiscal.

The S&P CNX Nifty opened at 6,037.85; about 13 points higher as compared to its previous closing of 6,024.05 and has touched a high and a low of 6,044.60 and 6,023.20 respectively. The index is currently trading at 6,031.45, up by 7.40 points or 0.12%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were TCS up by 2.41%, Ambuja Cement up by 2.16%, Axis Bank up by 1.37%, Tata Motors up by 1.31% and ACC up by 1.28%.

On the flip side, Asian Paint down by 1.02%, Infosys down by 0.94%, Hindustan Unilever down by 0.91%, Lupin down by 0.89% and ITC down by 0.83%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Hang Seng declined 66.31 points or 0.28% to 23,346.95, Jakarta Composite dipped 5.15 points or 0.12% to 4,377.35, Straits Times dropped 20.26 points or 0.63% to 3,186.33, KOSPI Composite decreased 14.48 points or 0.72% to 1,992.56 and Taiwan Weighted was down by 69.64 points or 0.89% to 7,754.33.

On the flip side, Shanghai Composite surged 9.81 points or 0.42% to 2,321.55, KLSE Composite rose 0.97 points or 0.06% to 1,685.60, Nikkei 225 was up by 88.05 points or 0.82% to 10,889.62.