Indian equities add gains; Nifty above 6,050 mark

Indian equity markets added gains to continue its firm trade in the late afternoon session on account of buying in frontline counters and taking cues from the European counterparts. Though early euphoria on account of good Q3 earnings of index heavyweight Reliance Industries continued on the street but investors have also taken an account of Moody’s report which retained India’s credit rating at the existing level, but cautioned that a high fiscal deficit could pull down the growth in the coming years. Traders were seen piling some position in Oil & Gas, Capital Goods and FMCG sectors while selling was witnessed in Realty, Auto and Health Care sector. Hectic activity was noticed in some of real estate companies and broking firms after Finance Ministry expressed its view that the Reserve Bank of India (RBI) should allow real estate companies and broking firms to set up banks as adequate safeguards will be there to prevent exposure of promoters to related entities. In the scrip specific movement, MindTree was trading firm after the software services provider posted better-than-expected results in the third quarter. Kingfisher Airlines was trading under pressure on reports that former pilots of the company have sent a legal notice to the management seeking compensation for mental harassment and salary dues.

On the global front, majority of the Asian markets were trading in red barring Shanghai Composite and Straits Times while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,050 and 20,100 levels respectively. The market breadth on BSE was negative in the ratio of 1317:1412 while 137 scrips remain unchanged.

The BSE Sensex is currently trading at 20,120.94, up by 81.90 points or 0.41% after trading in a range of 20,163.38 and 20,056.46. There were 16 stocks advancing against 14 declines on the index. 

The broader indices were trading in green; the BSE Mid cap index was up by 0.03% and Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 1.47%, Capital Goods up by 1.23%, FMCG up by 1.16%, Power up by 0.72% and TECk up by 0.26%. While, Realty down by 0.76%, Auto down by 0.36%, Health Care down by 0.31%, IT down by 0.09% and Bankex down by 0.08% were the top losers on the index.

The top gainers on the Sensex were RIL up by 2.70%, BHEL up by 2.27%, L&T up by 1.59%, HUL up by 1.52% and Maruti Suzuki up by 1.50%. On the flip side, Sun Pharma was down by 2.23%, Cipla was down by 1.16%, Tata Motors down by 1.13%, TCS down by 0.95% and M&M down by 0.89% 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 6,086.45, up by 22.05 points or 0.36% after trading in a range of 6,094.35 and 6,065.10. There were 25 stocks advancing against 24 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Reliance Infrastructure up by 3.86%, Reliance Industries up by 2.53%, BHEL up by 2.36%, L&T up by 1.65% and HUL up by 1.56%.

On the flip side, DLF down by 2.23%, Sun Pharma down by 2.11%, UltraTech Cement down by 1.79%, Tata Motors down by 1.19% and Cipla down by 1.18% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite added 0.48% and Straits Times surged 0.41%. On the flip side, Hang Seng declined 0.05%, Jakarta Composite declined 0.75%, KLSE Composite tumbled 2.42%, Nikkei 225 dropped 1.52%, KOSPI Composite was down by 0.05% and Taiwan Weighted too was trading lower by 0.10%.

The European markets were trading in green with; France’s CAC 40 added 0.08%, Germany’s DAX edged higher by 0.39% while the United Kingdom’s FTSE 100 gained 0.63%.