Markets trading firm amid strong buying; Nifty holds above 5,700 level

Following a positive start and subsequent retreat, Indian equity markets smartly rebounded and continued trading firm in the late morning session on Wednesday. The Sensex was up by 71.35 points, while Nifty was still holding above 5,700 level. Investors regained the momentum on hopes that central bank will cut the key interest rates with a recent fall in inflation. The continued fall in commodity prices, which is expected to narrow the current-account deficit, also boosted the market sentiment. In currency markets, rupee continued trading higher against greenback, after touching one-month high in early trade. On the sectoral front, banking, metals and realty stocks were lending strength to the indices while IT, oil and gas stocks were on sellers’ radar.

On the global front, most Asian stock markets were trading higher on Wednesday, boosted by a strong US housing report and better-than-expected corporate earnings that added further evidence of an improvement in the world's No 1 economy. Back home, the market breadth was favoring positive trend; there were 1,156 shares on the gaining side against 721 shares on the losing side while 104 shares remain unchanged.

The BSE Sensex is currently trading at 18,816.28, up by 71.35 points or 0.38% after trading in a range of 18,833.49 and 18,703.26. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.84% and Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were, Realty up by 2.75%, Bankex up by 1.53%, Metal up by 1.25%, PSU up by 1.10% and Power up by 0.93% while, Oil & Gas down by 1.16%, IT down by 0.41% and Teck down by 0.19% were the top losers on the BSE.

The top gainers on the Sensex were Sun Pharma up by 2.82%, SBI up by 2.47%, Mahindra & Mahindra up by 2.42%, Sterlite Industries up by 2.12% and Coal India up by 2.05%.

On the flip side, RIL was down by 2.82%, TCS was down by 1.09%, Dr Reddys Lab was down by 1.04%, Wipro was down by 0.79% and Tata Motors was down by 0.48% were the top losers on the Sensex.

Meanwhile, Finance Minister P Chidambaram, who is on a visit to Canada to woo foreign investors, said that the government was committed to bring down the fiscal deficit and wanted to reduce it by 0.6 per cent every year till it came down to 3 per cent by 2016-17. Fiscal deficit is estimated to be around 5.3 percent of the GDP for the FY13.

Elaborating the reasons for high fiscal deficit, Chidambaram said that the stimulus measures taken after the 2008 global economic crisis had driven fiscal deficit and inflation out of control. He further added that the first stimulus package was necessary, however the second and the third stimulus package were probably not required and that the country is now on path of fiscal consolidation.

Finance Minister has projected India as an attractive investment destination with stable fiscal regime and invited Canadian investments in sectors like infrastructure and food processing. Further, he said that India sees no difficulty in concluding a free trade pact with Canada. Referring to bilateral trade and investment between the countries, he said that while imports and exports were roughly matched in both directions with total trade approaching over $5 billion in 2012 as against $4 billion in 2010, the same was not true for bilateral direct investment. On the Foreign Investment Protection and Promotion Agreement (FIPPA), Chidambaram said there are certain legal issues which are being sorted out by the Government.   

The CNX Nifty is currently trading at 5,715.80 up by 26.85 points or 0.47% after trading in a range of 5,723.65 and 5,682.25. There were 33 stocks advancing against 16 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Sun Pharma up by 2.99%, SBI up by 2.61%, Ambuja Cements up by 2.47%, M&M up by 2.37% and PNB up by 2.15%.

On the flip side, Reliance Industries down by 2.77%, Ranbaxy down by 1.36%, Dr Reddy's Laboratories down by 1.31%, TCS down by 1.05% and HCL Tech down by 0.78%, were the major losers on the index.

The most of Asian equity indices were trading in green; Jakarta Composite rose 0.72%, KLSE Composite surged 0.55%, Nikkei 225 soared 1.22%, Hang Seng rose 0.40%, Taiwan Weighted was up by 0.10%, KOSPI Composite up by 0.08% and Straits Times was up by 0.16%.

On the other hand, Shanghai Composite declined 0.48% was the only loser.