Markets hold positive territory amid volatile trade

Indian equity markets held on to the positive territory after struggling in early trade on possible profit booking by funds and retail investors. The buying is subdued as the investors are cautious on the trend of the market with strong pullback last session amid a volatile week anticipate a strong selloff on Friday. The Sensex was up 65.80 points, while the Nifty was up by 24.20 points. Meanwhile, market sentiments improved as RBI’s annual report said that, a recovery is possible by the end of the year on the back of better agricultural growth. It said household financial savings are up and investment in gold is down. It added that, it expects the current account deficit to come down from the second quarter.  In currency market, rupee witnessed a slight pull back on the back of gains in some Asian peers and positive cues from the finance minister’s comments yesterday that the rupee is undervalued and there are no plans to introduce capital controls. On sectoral front, stocks from capital goods, consumer durables, automobile and banking sectors moving up on strong buying support. Oil, PSU and power stocks were also trading higher, while metal, realty and FMCG stocks were are trading in red.

On the global front, Asian markets firmed on Friday as a slew of upbeat manufacturing data from around the globe overshadowed concerns about the US Federal Reserve's plans for its stimulus program. Back home, the market breadth was favoring the positive trend; there were 1081 shares on the gaining side against 771 shares on the losing side, while 110 shares remained unchanged.

The BSE Sensex is currently trading at 18,378.74 up by 65.80 points or 0.36% after trading in a range of 18,434.18 and 18,210.75. There were only 15 stocks advancing against 15 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.72%, while Small cap index also up by 0.57%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 2.62%, Auto up by 1.12%, Bankex up by 1.08% and Oil and Gas up by 1.00%. While, Metal down by 0.21%, Teck down by 0.07% and FMCG down by 0.02% were the top losers indices on the BSE.

The top gainers on the Sensex were, BHEL up by 4.70%, Jindal Steel up by 2.74%, Tata Motors up by 2.31%, Mahindra and Mahindra up by 2.00% and ONGC up by 1.91%. On the flip side, Bharti Airtel down by 2.79%, Sterlite Inds down by 2.52%, NTPC down by 1.41%, Hindalco Inds down by 1.30% and Gail India down by 1.21% were the top losers on the Sensex.

Meanwhile, amid domestic currency deprecating to a record low of over 64 to a dollar, global rating agency Fitch said that the rupee depreciation would not trigger a change in its ratings and will maintain a 'Stable Outlook' on India's sovereign rating at 'BBB-', mainly on the back of the country's sizable forex reserves, fiscal deficit management and structural reforms. However, Indian economy is likely to continue facing pressure on account of fall in rupee value, and the sharp weakening of the currency reflects large or growing current account deficit whose funding has been complicated by a reversal of global portfolio capital, it added.

Fitch said that policy management would be the key factor in determining whether economic and financial stability is maintained in India following the intensified pressure on currencies and asset prices. By adding further, Fitch said that rapid private-sector credit growth, widening fiscal deficits or sustained higher inflation could lead to a broader and more sustained loss of confidence among investors. Fitch’s note further said that India's foreign-exchange reserves have come under pressure, but are still sizable and the country's forex reserves, which have currently fallen to $279 billion, still provide around 5.5 months of import cover. Noting that demand growth in excess of current supply-side capabilities could lead to a further widening in external imbalances, Fitch said that additional supply-side reforms could boost sustainable growth rates and attract greater foreign investment inflows, but likely to take more time to implement in view of approaching elections in first half of 2014.

Referring to the global factors, Fitch said that market anticipation of US Fed tapering of bond purchase appears to have prompted some shift in investor perceptions of the risks. It said that current market volatility could persist for a while in view of continuing uncertainty over the timing and magnitude of an eventual unwinding of global central banks' quantitative easing. Meanwhile, despite India, economic stability pressure has also increased on the other Asian economies, it added.

The CNX Nifty is currently trading at 5,432.65 up by 24.20 points or 0.45% after trading in a range of 5,449.25 and 5,377.80. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were BHEL up by 4.98%, Jindal Steel up by 3.55%, Lupin up by 2.43%, Tata Motors up by 2.41% and Tata Powers up by 2.34%. On the flip side, Ultra Cement down by 3.33%, Bharti Airtel down by 2.54%, Sesa Goa down by 2.09%, Grasim down by 1.80% and ACC Cement down by 1.77% were the major losers on the index.

The most of the Asian equity indices were trading in green; Nikkei 225 was up by 2.21%, Jakarta Composite up by 1.42%, Straits Times up by 0.03%, KLSE Composite up by 0.39%, Taiwan Weighted up by 0.75% and Hang Seng up by 0.12%, while Shanghai Composite was down by 0.70%.