Benchmarks extends northward journey on sanguine global cues

Extending their previous session’s rally, Indian equity benchmarks are trading with a gain of about half a percent, tracking firm cues from global markets. Overnight, the US markets strengthened further with the Dow closing higher for the tenth consecutive session, on getting report of unexpected drop in initial jobless claims in the week ended March 9. While, Asian shares rebounded after three days of continuous downfall as sentiment remained buoyed by new US data.

Back home, sustained buying in key heavyweights along with broader indices kept the markets on the positive side. Some strength to the markets also came in after Standard & Poor’s pegged India’s FY’14 GDP growth at 6.4 percent and said it may upwardly revise outlook on the sovereign rating if the government continues to focus on policy initiatives. Media stocks like Zee Entertainment, Dish TV India, Sun TV Network and Den Network edged higher, as the Minister of Information and Broadcasting, Manish Tewari said that the government will facilitate and play a key role for rapid Media & Entertainment growth in India. Market participants were eyeing the fourth quarter advance tax numbers to gauge the health of the companies. 

Most of the sectoral indices opened higher with the consumer durables leading with over 1 per cent of gains. Metal, oil and gas, public sector undertaking, power, capital goods and healthcare indices were the other notable index movers in the opening trades while, banking remained the lone loser on the BSE sectoral space. The broader indices were going neck-to-neck with benchmarks while, the market breadth on the BSE was positive; there were 1,087 shares on the gaining side against 740 shares on the losing side while 90 shares remain unchanged.

The BSE Sensex opened at 19570.01; about flat compared to its previous closing of 19570.44 and has touched a high and a low of 19673.16 and 19555.61 respectively.

The index is currently trading at 19648.78, up by 78.34 points or 0.40%. There were 24 stocks advancing against 6 declines and one stock remained unchanged on the index.

The overall market breadth has made a strong start with 57.63% stocks advancing against 37.39% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices rose by 0.49% and 0.38% respectively. 

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.62%, Metal up by 0.93%, Oil & Gas up by 0.85%, PSU up by 0.81% and power up by 0.79% while, Bankex down by 0.03% was the sole loser on the index.

The top gainers on the Sensex were Hindalco Industries up by 2.24%, HDFC up by 1.99%, ONGC up by 1.58%,  Sterlite Industries up by 1.51% and Hindustan Unilever up by 1.32%.

On the flip side, Tata Motors was down by 1.26%, ICICI Bank was down by 1.18%, HDFC Bank was down by 0.23%, Maruti Suzuki was down by 0.14% and TCS was down by 0.14% were the top losers on the Sensex.

Meanwhile, dimming hopes of a rate cut by the central bank at its policy meet next week, the Reserve Bank of India (RBI) Governor Duvvuri Subbarao reiterating his concern about persistently high inflation said, 'stubborn' inflation remains a major obstacle to growth in India. By adding further he said, it is not possible to bring inflation down without sacrificing some growth. But one has to realize that growth sacrifice is only in the short term.

In defence of criticism that the RBI is damaging growth by not cutting interest rates quickly enough, the governor said 'in the medium term, low inflation - price stability - is very important for sustained growth'. The RBI leaving its 9-month long hawkish monetary policy stance slashed key interests rates and reduced CRR by 25 basis points after a fall in inflation.

Meanwhile, Indian business leaders and the government have been calling for lowering the interest rates from last one year to help the economy, which is struggling with slowdown and expected to post its slowest growth in a decade at around 5-percent for the fiscal year that ends in March.

Moreover, in a big sign of disappointment, after falling to a multi-year low in January 2013, the annual rate of inflation, based on monthly WPI, again inched higher to 6.84% for the month of February, 2013 as compared to 6.62% for the previous month. However, non-food manufacturing inflation, which the apex bank uses to gauge demand-driven price pressures slowed to 3.8% in February, the weakest pace since March 2010.

The CNX Nifty opened at 5,914.90; about 5 points higher as compared to its previous closing of 5,908.95, and has touched a high and a low of 5,945.65 and 5,914.25 respectively.

The index is currently trading at 5,936.85, up by 27.90 points or 0.47%. There were 42 stocks advancing against 8 declines on the index.

The top gainers of the Nifty were Siemens up by 3.22%, IDFC up by 2.98%, BPCL up by 2.23%, Hindalco up by 2.19% and HDFC up by 1.99%.

On the flip side, ICICI Bank down by 1.43%, Tata Motors down by 1.38%, DLF down by 1.38%, TCS down by 0.22% and Power Grid down by 0.14%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite surged 37.36 points or 1.65% to 2,307.64, Hang Seng strengthened 170.96 points or 0.76% to 22,790.14, Jakarta Composite soared 51.69 points or 1.08% to 4,838.05, Nikkei 225 jumped 150.75 points or 1.22% to 12,531.94, Straits Times added 17.15 points or 0.52% to 3,296.65 and Taiwan Weighted was up by 21.86 points or 0.27% to 7,973.62.

On the flip side, KLSE Composite declined 8.23 points or 0.50% to 1,637.99 and KOSPI Composite was down by 9.98 points or 0.50% to 1,992.15.