Sensex, Nifty pares early gains amid volatile trade

After a positive start and subsequent retreat, Indian equity markets managed to hold gains in the late morning session on Friday. BSE Sensex came off early highs, while NSE Nifty trading up by 9 points. Meanwhile, investors were treading cautiously amid concerns about slowing growth following the release of disappointing GDP data for the October-December 2012 quarter. In currency markets, rupee depreciated against greenback on Friday, amid dollar strengthening compared to other currencies overseas. On sectoral front, realty stocks were among the most prominent losers. Healthcare stocks were off their early lows, but still mostly subdued amid lackluster trades. Capital goods, power, metal and consumer durables stocks were trading firm. On global front, Asian shares extended earlier session’s gains for a second day on Thursday as sentiment improved after US Federal Reserve chairman Ben Bernanke reaffirmed his commitment to strong stimulus, while Italy found investor confidence in its debt despite political situation. Back home, the market breadth favoring negative trend; there were 1,141 shares on the gaining side against 1,202 shares on the losing side while 107 shares remain unchanged.

The BSE Sensex is currently trading at 18,898.62, up by 37.08 points or 0.20% after trading in a range of 18,970.45 and 18,820.90. There were 16 stocks advancing against 13 declines and one remains unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.25% and Small cap index has lost 0.11 points.

The top gaining sectoral indices on the BSE were, Capital Goods (CG) up by 1.32%, Power up by 1.27%, Metal up by 1.04%, Consumer Durables (CD) up by 0.85% and Auto up by 0.59% while, Realty down by 2.49%, Health Care (HC) down by 0.47% and FMCG down by 0.24% were top the losers on the BSE.

The top gainers on the Sensex were Jindal Steel up by 3.78%, Maruti Suzuki up by 3.07%, Tata Power up by 2.54%, L&T up by 2.13% and ICICI Bank up by 1.46%.

On the flip side, Hero MotoCorp down by 2.21%, Dr Reddys Lab down by 1.25%, ITC down by 1.19%, BHEL down by 1.17% and NTPC down by 1.13% were the top losers on the Sensex.

Meanwhile, global rating agencies, Standard & Poor's (S&P) and Fitch have kept their sovereign rating on India at same level after the Budget announcement on February 28, but warned that policy execution and controlling subsidies would be the key risks to look out for during the year. The FY14 Budget has projected fiscal deficit at 5.2 and 4.8 per cent respectively for this fiscal and next, reflecting the weak economic environment.

Both the agencies have expressed their views on the Indian economic outlook and considered the factors, which are important to improve the ratings. S&P said ‘the future trajectory of the rating will be determined by factors like economic growth prospects, external position, fiscal reforms like the introduction of the goods and services tax, action on subsidy reduction and the political climate’. Further, it also cautioned that there is little progress in structural reforms to reduce the vulnerability of the government’s fiscal position and there is a possibility that the government may exceed its budgeted expenditure target.

While, Fitch said ‘delivery of subsidy reforms, GDP growth and uncertain proceeds from the privatization process (are) the key risks for the government's policies’. Regarding the upcoming election, the agencies stated that with elections due in 2014, the adherence to fiscal consolidation remains encouraging. Last year, both agencies (S&P and Fitch) had threatened the country to downgrade their sovereign rating to junk status.

The CNX Nifty is currently trading at 5,702.05 up by 9.00 points or 0.16% after trading in a range of 5,728.15 and 5,679.90. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were JP Associates up by 4.39%, Power Grid up by 4.12%, Reliance Infra up by 3.89%, Jindal Steel up by 3.87% and BPCL up by 3.59%.

On the flip side, DLF down by 4.98%, IDFC down by 3.18%, Hero MotoCorp down by 2.24%, Cairn down by 2.03% and Axis Bank down by 1.63% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Jakarta Composite rose 0.01%, KLSE Composite strengthened 0.15%, Nikkei 225 surged 0.41%, Straits Times added 0.02% and Taiwan Weighted was up by 0.84%.

On the flip side, Shanghai Composite dropped 0.97% and Hang Seng was down by 0.51%.

South Korean markets remained shut for the trade today.