Indian markets start FY’14 on promising note

Indian equity benchmarks have started the new financial year on positive note with both the frontline gauges reclaiming their crucial 5,700 (Nifty) and 18,900 (Sensex) marks. Sentiments remained jubilant on Planning Commission Deputy Chairman Montek Singh Ahluwalia’s statement that the Cabinet Committee on Investments (CCI) is expected to give its nod for a number of projects within the next three weeks. Besides, the Environment and Forests Ministry had also informed CCI that it had initiated steps for speedy approval to infrastructure projects, stuck for want of green nod.  However, the upside remain capped as India’s current account deficit touched a record high of 6.7% in the October-December quarter.

On the global front, Asian shares were trading mixed as some markets, including Australia and Hong Kong, and Europe were still closed for Easter holidays. Sentiments in the region remain subdued as Chinese factory data missed market expectations. The country’s factory production ran at its fastest in 11 months in March, though the rise to 50.9 missed market expectations of a bigger headline jump. Back home, on the sectoral front, realty witnessed the maximum gain in trade followed by capital goods and power while, auto and metal remained the only losers on the BSE sectoral space. The broader indices were outperforming benchmarks, garnering over a percent gains in the opening deals while, the market breadth on the BSE was positive; there were 1,199 shares on the gaining side against 545 shares on the losing side while 74 shares remain unchanged.

The BSE Sensex opened at 18,890.81; about 55 points higher compared to its previous closing of 18,835.77, and has touched a high and a low of 18,708.22 and 18,581.78 respectively.

The index is currently trading at 18,924.95, up by 89.18 points or 0.47%. There were 21 stocks advancing against 9 declines on the index.

The overall market breadth has made a strong start with 65.71% stocks advancing against 29.47% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices were up by 0.96% and 1.47% respectively. 

The top gaining sectoral indices on the BSE were, Realty up by 3.64%, Capital Goods up by 1.98%, Power up by 1.08%, Consumer Durables up by 0.92% and PSU up by 0.86% while, Auto down by 0.60% and Metal down by 0.40% were the only losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 2.60%, L&T up by 2.48%, Dr Reddys Lab up by 2.01%, NTPC up by 1.62% and Infosys up by 1.49%.

On the flip side, Sterlite Industries was down by 3.62%, Tata Motors was down by 1.89%, Sun Pharma was down by 0.50%, Jindal Steel was down by 0.39% and TCS was down by 0.38% were the top losers on the Sensex.

Meanwhile, in a worse-than-expected performance, mainly driven by heavy oil and gold imports and muted exports, India’s current account deficit (CAD) hit an all time high of 6.7% of gross domestic product (GDP) or $32.6 billion in the October-December period of 2012. The CAD represents the difference between exports and imports after considering cash remittances and payment. The CAD was $20.2 billion in the same period a year ago and $22.6 in the second quarter of 2012.

For the third quarter of FY13, merchandise exports did not show any significant growth as compared with a 7.6% growth in Q3 of 2011-12. Exports increased marginally by 0.5% y-o-y to $71.8 billion in Q3 of 2012-13. Similarly, services exports registered a negative growth of 2.0% against a 6.4% growth recorded in the same quarter last year. The decline was mainly led by a turn-down in software services exports and receipts under travel and transportation.

Merchandise imports stood at $131.4 billion witnessing a growth of 9.4% in Q3 of 2012-13 as against 22.3% in the corresponding quarter of the preceding year. On the other hand, services imports declined by 10.6% during the quarter. As a result, trade deficit widened to $59.6 billion in the third quarter of 2012-13 from $48.6 billion in the same quarter of previous year.

Further, the RBI data also showed that the balance of payments was in surplus of $781 million, compared with a deficit of $158 million in the previous quarter, mainly on the back of robust dollar inflows. The pickup in capital flows was mainly due to foreign portfolio investment which rose to $8.6 billion in the third quarter of 2012-13 from $1.8 billion in Q3 of previous year. While loans availed by banks and corporate sector amounted to $7.1 billion, net Foreign Direct Investment (FDI) declined to $2.5 billion in Q3 of 2012-13 from $5 billion in the corresponding quarter of 2011-12.

The financial account, which includes foreign direct investment, portfolio investment and overseas borrowing by Indian companies, showed a surplus of $31.1 billion in the December quarter, compared with $24.2 billion in the previous quarter.

The CNX Nifty opened at 5,697.35; about 14 points higher as compared to its previous closing of 5,682.55, and has touched a high and a low of 5,720.95 and 5,688.10 respectively.

The index is currently trading at 5,715.20, up by 32.65 points or 0.57%. There were 33 stocks advancing against 15 declines and 2 stocks remain unchanged on the index.

The top gainers of the Nifty were DLF up by 4.35%, JP Associate up by 2.83%, BHEL up by 2.68%, Reliance Infrastructure up by 2.48% and L&T up by 2.42%.

On the flip side, Sesa Goa down by 2.22%, Tata Motors down by 1.73%, IDFC down by 0.80%, Sun Pharmaceuticals down by 0.61% and TCS down by 0.55%, were the major losers on the index.

Asian equity indices were trading mixed; KLSE Composite slipped 4.27 points or 0.26% to 1,667.36 and Nikkei 225 was down by 123.53 points or 1.00% to 12,274.38.

On the flip side, Straits Times rose 4.00 points or 0.12% to 3,312.10 and Jakarta Composite was up by 7.34 points or 0.15% to 4,948.33.

Stock market in Hong Kong, South Korea, Taiwan and China remained closed for the trade today.