Firm trade prevails; Nifty above 5,750 mark

Indian equity markets added gains to continue firm trade hovering near the highest point of the day in the late afternoon session on account of buying in front line counters and taking cues from European counterparts. The optimism on the street continued despite HSBC survey showed that the country’s services sector witnessed continued, albeit slower pace of expansion in February amid a decline in new business orders. The growth in the services sector which makes up for nearly 60% of the country’s economic output stood at 54.2 in February significantly down from 57.5 in January. Also, on the other hand finance ministry’s chief economic adviser Raghuram Rajan stated that India’s record high current account deficit is the country’s biggest concern. The current account deficit is expected to stay at record high for the entire 2012-13. Traders were seen piling some position in Realty, Metal and Oil & Gas sector while selling was witnessed in Consumer Durables sector.

In the scrip specific development, Essar Oil was trading firm after Goldman Sachs maintained ‘buy’ rating on the stock after the company received phase III environmental clearance for the Raniganj coal bed methane (CBM) block. Godrej Properties was trading in green after the company launched BKC (Bandra-Kurla Complex) project in partnership with country’s largest private air carrier Jet Airways. Bajaj Auto was trading in red after JP Morgan Securities lowered its rating on the company to underweight from neutral and cut its target price.

On the global front, all the Asian markets were trading in green while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,750 and 19,100 levels respectively. The market breadth on BSE was positive in the ratio of 1531:1131 while 109 scrips remain unchanged.

The BSE Sensex is currently trading at 19,112.04, up by 234.08 points or 1.24% after trading in a range of 19,135.83 and 18,943.62. There were 25 stocks advancing against 5 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.29% and Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were, Realty up by 2.67%, Metal up by 2.08%, Oil & Gas up by 1.90%, Auto up by 1.77% and Bankex up by 1.61% while, Consumer Durables down by 0.65% was the sole loser on the BSE.

The top gainers on the Sensex were Sterlite Industries up by 4.03%, Hindalco Industries up by 3.92%, Tata Motors up by 3.73%, ICICI Bank up by 3.32% and Wipro up by 3.17%.

On the flip side, NTPC down by 0.80%, Bajaj Auto down by 0.73%, BHEL down by 0.53%, ITC down by 0.14% and Bharti Airtel down by 0.06% were the top losers on the Sensex.

Meanwhile, India’s services sector activity, which makes up for nearly 60% of the country's economic output, after registering a 12-month high in January, increased at a notably slower pace in February amid a decline in new business orders. As per the seasonally adjusted purchasing managers' index (PMI) for the services sector, dropped to 54.2 in February from 57.5 in January.

The robust pace of growth in the services sector witnessed in January could not be sustained in the month of February and the PMI fell for the first time since November, but it has held above the 50 mark that separates growth from contraction - for the sixteenth successive month. Service providers are also optimistic about the 12-month outlook for the sector.

Helped by stronger demand, increased marketing and superior quality of services, new orders received by Indian service providers, increased further in February, but the backlogs of work also rose in month. Reflecting the growth in new business, output also increased during the month. In tandem with new business growth, service providers also raised their headcounts modestly.

At the same time, the HSBC India composite output index, which measures activity in both the manufacturing and services sector, declined to 54.8 in February from 56.3 in January, marking the weakest improvement in operating conditions in three months. The month of February saw output growth in the manufacturing sector being accelerated, whereas a slowdown was registered at service providers. 

With the rate of inflation accelerating in both manufacturing and services firms, the overall pace of price rise was sharp, and the fastest in seven months. Meanwhile, private sector companies continued to pass on higher costs to clients through increased output prices. The index stayed above the neutral mark for the forty-sixth successive month.

The CNX Nifty is currently trading at 5,778.20, up by 79.70 points or 1.40% after trading in a range of 5,779.10 and 5,722.40. There were 43 stocks advancing against 6 declines while 1 stock remains changed on the index.

The top gainers of the Nifty were Sesa Goa up by 4.80%, HCL Tech up by 4.21%, Hindalco Industries up by 4.19%, Tata Motors up by 3.95% and Ambuja Cement up by 3.53%.

On the flip side, Bajaj-Auto down by 0.96%, NTPC down by 0.60%, BHEL down by 0.60%, Ranbaxy Laboratories down by 0.42% and Power Grid down by 0.41% were the major losers on the index.

All Asian equity indices were trading in the green; Shanghai Composite surged 2.33%, Hang Seng rose 0.10%, KLSE Composite jumped 0.39%, Nikkei 225 increased 0.27%, Straits Times added 0.38%, KOSPI Composite moved up 0.17%, Taiwan Weighted was up by 0.83% and Jakarta Composite was up by 0.21%.

The European markets were trading in green; France’s CAC 40 added 1.28%, Germany’s DAX ascended 1.29% and United Kingdom’s FTSE 100 jumped by 0.70%.