Benchmarks add gains; Sensex surpasses 20,000 mark

Indian equity markets added gains to continue firm trade in the late afternoon session on account of buying in front line blue chip counters. The sentiments remained on upbeat mood despite global financial services firm Macquarie lowering India’s growth forecast for this fiscal to 5.3% from 6.2% estimated earlier citing significant capital outflows and rupee depreciation. The global brokerage in its report stated that significant capital outflows from India amid an environment of already weak growth and slow progress in undertaking much needed policy reforms is weighing down on potential growth. Traders were seen piling positions in Realty, Capital goods and Oil & Gas stocks while selling was witnessed in Auto, Bankex and Metal sector stocks. In scrip specific development, Exide Industries was trading in green after Morgan Stanley and Credit Suisse upgraded their ratings on the auto battery maker. Igarashi Motors India was trading in green after the company’s promoter Agile Electric Sub Assembly announced an open offer.

On the global front, the Asian markets were trading on a mixed note while the European markets were too trading mixed. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,000 and 20,000 levels respectively. The market breadth on BSE was negative in the ratio of 1004:1146, while 140 scrips remain unchanged. 

The BSE Sensex is currently trading at 20031.81, up by 83.08 points or 0.42% after trading in a range of 20059.03 and 19956.20.

The broader indices were too trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.34% and 0.22% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.85%, Capital Goods up by 1.31%, Oil & Gas up by 1.19%, Consumer Durables up by 1.14% and PSU up by 0.93%, while Auto down by 0.20%, Bankex down by 0.06% and Metal down by 0.04% were the top losers on the index.

Out of the 30 shares on Sensex, 20 stocks were advancing while 10 were declining. The top gainers on the Sensex were ONGC up by 3.74%, BHEL up by 3.25%, Hindalco Industries up by 2.16%, Infosys up by 1.82% and Cipla up by 1.78%. On the flip side, Mahindra & Mahindra down by 2.09%, Sterlite Industries down by 1.96%, Hindustan Unilever down by 1.42%, ICICI Bank down by 1.19% and TCS was down by 0.95% were the top losers on the Sensex.

Meanwhile, Chief Economic Advisor Raghuram Rajan has called for zero regulation, saying that external factors and the delayed allocation of natural resources and environmental clearances have played a significant role in the slowdown of growth. He also said that undue volatility in the rupee is not desirable.

Rajan highlighted that the Reserve Bank of India’s (RBI) measures were not an indication of a tightening in the interest rate cycle which has increased the cost of funds for banks and did not signal monetary tightening, a short-term move with an intention to curb rupee volatility. Stating further he said that he saw no comparison between sliding macroeconomic parameters and global financial crisis, even as the RBI opened a three-day repo borrowing window for mutual funds for the first time after the meltdown of 2008-09.

He also stated that as policy rates were left unchanged, the RBI steps cannot be called a monetary tightening measure. “It did not change the policy rate, not changed the repo rate. I think the message that the Reserve Bank was trying to send out that it is not the beginning of a process of monetary tightening.”  He also said that if the inflation comes under control, the RBI may reduce the rates.

Earlier, after lifting short term rates to drain out liquidity, the RBI, as a contingency measure, to enable banks to fulfill Mutual Funds liquidity needs, decided to conduct a special 3-day repo borrowing window, under which banks can borrow Rs 25,000 crore at an interest rate of 10.25%. This facility has been made available for a temporary period until further notice. The CNX Nifty is currently trading at 6,000.45, up by 27.15 points or 0.45% after trading in a range of 6,005.60 and 5,974.55.

Out of the 50 shares on Nifty, 36 stocks were gaining, while 14 stocks were losing. Top gainers of the Nifty were ONGC up by 4.06%, BHEL up by 3.72%, Reliance Infrastructure up by 3.22%, Asian Paint up by 3.13% and Cairn India up by 3.08%. On the flip side, M&M down by 2.17%, HCL Tech down by 2.05%, Kotak Bank down by 1.98%, Axis Bank down by 1.65% and HUL down by 1.39% were major losers on the index.

The Asian equity indices were trading on mixed; Jakarta Composite increased 0.43%, KLSE Composite jumped 0.15%, Nikkei 225 surged 1.32% and Straits Times was up by 0.30%.

On the flip side, Hang Seng down by 0.12%, Shanghai Composite declined 1.05%, Seoul Composite contracted 0.64% and Taiwan Weighted was down by 0.78%.

The European markets were trading on mixed note; France’s CAC 40 was up 0.25%, Germany’s DAX lost 0.12% and the United Kingdom’s FTSE 100 edged higher by 0.36%.