IT and auto shares lift Markets higher

Key benchmarks are comfortably placed after a firm start on the back of positive cues from Asian peers and demand of IT shares, following better-than-expected results by Tata Consultancy Services (TCS), sentiments has bolstered with the country's largest software exporter reporting a consolidated net profit of Rs 3,831 crore for the June quarter, up 15.5 per cent from Rs 3,318 crore in the same period last year. However, there were concerns among the traders that the RBI may not cut interest rates but instead hike cash reserve ratio, the portion of deposits banks kept with RBI. The market may face stiff resistance ahead of the Reserve Bank of India's policy meet. Also, the foreign institutional investors (FIIs) sold shares worth a net Rs 178.30 crore on Thursday, 18 July 2013, as per provisional data from the stock exchanges. On the global front, most of Asian markets were trading in green after overnight gains in US stocks. Back home, the traders were seen piling up positions in IT, Tech and Auto, while selling was seen in Power, Capital Goods and Consumer Durables sector.

Meanwhile, the NSE Nifty and BSE Sensex were trading near the psychological 6,050 and 20,000 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in the ratio of 934:655. The BSE Sensex is currently trading at 20222.58, up by 94.17 points or 0.47% after trading in a range of 20238.89 and 20150.52. There were 15 stocks advancing against 15 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.30% and Small cap index gained 0.46%.

The top gaining sectoral indices on the BSE were, IT up by 3.03%, TECK up by 2.23%, Auto up by 0.66%, Metal up by 0.64%, and Oil & Gas up by 0.32%, while Power down by 0.96%, Capital Goods down by 0.92%, Consumer Durables down by 0.55%, Realty down by 0.43% and Bankex down by 0.36% were the top losers on the BSE.

The top gainers on the Sensex were TCS up by 4.81%, Tata Motors up by 2.16%, Infosys up by 2.14%, Coal India up by 1.63% and Wipro up by 1.30%.  On the flip side, BHEL was down by 3.79%, NTPC was down by 2.02%, Sun Pharma was down by 1.63%, Tata Power was down by 1.45% and Bajaj Auto was down by 1.24% were the top losers on the Sensex.

Meanwhile, Moody's Investors Service which is having “stable” outlook on India’s “Baa3” rating, its lowest investment grade-rating, has warned that the rupee’s depreciation will exacerbate inflationary and fiscal pressures, with both factors potentially constraining the country's sovereign rating. Moody’s on the same time moved the outlook on the US government back to stable and affirmed the Aaa rating, assessing the federal government’s debt trajectory to be on track.

The global ratings agency has also painted a grim possibility of any major gains in the rupee during the current fiscal saying that the continuing global volatility and domestic political uncertainty ahead of the 2014 general elections will limit chances of any significant appreciation apart from further impact growth. India's recent measures to prop up the rupee may limit exchange rate volatility to some degree, but a sustained reversal in the rupee would require a significant narrowing of the trade deficit or large capital flows, Moody's added.

Moody's has warned that rupee depreciation is likely to impact inflation and financial stability, that may thus keep domestic borrowing costs high and extend the current slowdown. However, it noted that foreign currency-denominated debt is only about 6% of the total government debt, so depreciation will not materially increase the sovereign's debt repayment burden, though it will raise the cost of servicing foreign currency government debt.  

The CNX Nifty is currently trading at 6,056.70 up by 18.65 points or 0.31% after trading in a range of 6,066.85 and 6,035.60. There were 19 stocks advancing against 30 declines, while 1 stock remained unchanged on the index.

The top gainers of the Nifty were TCS up by 5.04%, HCL Tech up by 4.09%, Tata Motors up by 2.56%, Infosys up by 2.15% and Cairn up by 1.86%.

On the flip side, BHEL down by 3.98%, NTPC down by 1.98%, Kotak Bank down by 1.97%, Sun Pharma down by 1.56% and DLF down by 1.43% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 4.31 points or 0.21% to 2,027.71, Hang Seng increased 32.17 points or 0.15% to 21,377.39, Jakarta Composite jumped 12.51 points or 0.27% to 4,732.95, KLSE Composite added 7.11 points or 0.40% to 1,798.65 and Seoul Composite was up by 1.06 points or 0.05% to 1,876.64.

On the flip side, Nikkei 225 declined 1,876.64 points or 1.35% to 14,595.48, Straits Times dipped 4.90 points or 0.15% to 3,213.30 and Taiwan Weighted was down by 136.59 points or 1.66% to 8,059.89.