Drag of rate-sensitive counters push barometer gauges near intra-day’s low

Drag of rate-sensitive counter’s, viz., Banking, Auto and Realty, has tempered the gains at D-street, thereby pushing benchmark equity indices near intra-day’s low level. Although the barometer gauges are still hanging out in the green terrain, much of the early euphoria on account of good Q3 earnings of index heavyweight - Reliance Industries has been fizzled away. However, Mukesh Ambani led RIL still continues to the top gainer. However, much of support, rendered from stocks belonging to Oil & Gas, Fast Moving Consumer Goods and Capital Goods counters, have limited the further downside chances of benchmark equity indices. Escalating to intra-day’s low, 30 share barometer index, Sensex and 50 share index, Nifty are currently holding above 20050 and 6050 respective bastions. Meanwhile, broader indices too succumbing to selling pressure are showcasing mixed trend.

On the global front, Asian pacific shares pulled back from multi-month highs on Monday, ahead of a Bank of Japan policy decision that is expected to deliver bold monetary easing measures. Under growing political pressure to pursue bolder measures to beat deflation, speculation over the BOJ's options has ranged from an open-ended commitment to buy assets until a 2 percent inflation target is achieved to simply boosting its asset buying schemes.

Back home, the BSE Sensex is currently trading at 20085.85, up by 46.81 points or 0.23% after trading in a range of 20163.38 and 20065.75. There were 12 stocks advancing against 18 declines on the index. 

The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1318:1214, while 149 shares remain unchanged.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.10% and Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.63%, FMCG up by 0.98%, Capital Goods up by 0.85%, Power up by 0.27% and TECk up by 0.09%. While, Realty down by 1.20%, Auto and Bankex were down by 0.47%, Health Care down by 0.36% and IT down by 0.30% were the top losers on the index.

The top gainers on the Sensex were RIL up by 3.05%, BHEL up by 2.03%, Bharti Airtel up by 1.43%, Maruti Suzuki up by 1.37% and HUL up by 1.21%. On the flip side, Sun Pharma was down by 1.74%, Cipla was down by 1.73%, M&M down by 1.40%, Tata Motors down by 1.37% and TCS down by 0.96% were the top losers on the Sensex.

Meanwhile, the global rating agency Moody's has retained India's credit rating at the existing level, but cautioned that a high fiscal deficit could pull down the economic growth in the coming years. Moody's expects Indian economy to grow by 5.4 percent in the current fiscal and 6 percent in FY14 while, in the last fiscal, economy grew by 6.5 percent.

The agency also highlighted factors like large government deficits and debt ratios as well as supply constraints in the form of infrastructure, policy and administrative inefficiencies constraining the sovereign credit profile. While on the positive side the global rating agency reaffirmed sovereign credit rating of India at Baa3, which indicates investment grade with a stable outlook.

As per the agency, the government finances are the weakest aspect of India's macroeconomic profile. Further, high commodity prices have raised the subsidy bill and the government's measures to reduce fuel and fertilizer subsidies are too modest to compensate for high global commodity prices. However, the agency’s report has not taken into account the recent decision of the government to partially deregulate diesel and allow oil market companies to raise price every month. 

Regarding the growth prospects, it said that a downturn was underway which could be made worse by slower global growth. While the robust domestic savings and a dynamic private sector would provide strength in the medium term.

On India’s outlook in the near term, the agency said improvement in fiscal situation would depend in increasing tax revenues and expediting PSU disinvestment. Further, on the rating upgrade, Moody's said that the improvement in investment climate, project completion, reduction in infrastructure bottlenecks and sustained improvement in public finances could lead to the credit rating upgrade. However, it also cautioned that a continued increase in government debt ratio and worsening of the balance of payments situation could lead a ratings downgrade.

The S&P CNX Nifty is currently trading at 6,067.55, up by 3.15 points or 0.05% after trading in a range of 6,094.35 and 6,065.95. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Reliance Industries up by 2.83%, Reliance Infra up by 2.51%, BHEL up by 2.10%, Cairn up by 1.63% and Bharti Airtel up by 1.36%. On the flip side, DLF down by 2.99%, UltraTech Cement down by 2.16%, Cipla down by 1.76%, Sun Pharma down by 1.67%  and Ambuja Cement down by 1.53% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite added 0.42% and Straits Times surged 0.31%,

On the flip side, Hang Seng declined 0.08%, Jakarta Composite declined 0.43%, KLSE Composite tumbled 2.52%, Nikkei 225 dropped 1.52%, KOSPI Composite was down by 0.05% and Taiwan Weighted too was trading lower by 0.10%.