Firm trade continues in markets ahead of GDP data release

Indian equity markets continued trading firm on the back of strong buying across the counters. The benchmark BSE index gained 193.55 points, while the broader NSE index is up 50 points, heading for a third session of gains. Meanwhile, investors were still cautious ahead of the crucial GDP data set to be released later in the day, which is expected to grow at 4.7% in the April-June quarter, lower than its decade-low growth of 5% seen in the last fiscal year. In currency market, rupee resumed its losing streak after a sharp jump on Thursday amid increased month-end dollar demand from banks and importers. On sectoral front, realty stocks were in demand following the Lok Sabha passing the land acquisition bill, which sets new rules for compensation for land acquired for infrastructure projects and industry and as compensation, this bill will offer for up to four times the market value of land acquired in rural areas and twice the market value in urban areas. It will also provide compensation to those dependent on the land for livelihood. Moreover, buying also witnessed in banking, information technology and healthcare stocks. Select stocks from consumer durables, metal and FMCG sections have also surged higher, while power and oil stocks were trading lower.

On the global front, Asian stocks were trading mixed as a possible U.S. military strike on Syria appeared less likely and some profit-taking by market participants is expected ahead of the U.S. holiday long weekend. However, investors are likely to remain on sidelines as the Syria situation continues to unfold. Back home, the market breadth was favoring the positive trend; there were 1117 shares on the gaining side against 681 shares on the losing side, while 109 shares remained unchanged.

The BSE Sensex is currently trading at 18,594.59 up by 193.55 points or 1.05% after trading in a range of 18,621.90 and 18,233.74. There were only 21 stocks advancing against 9 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.77%, while Small cap index also up by 0.68%.

The top gaining sectoral indices on the BSE were, Bankex up by 2.36%, Realty up by 1.68%, Healthcare up by 1.63% and IT up by 1.61%. While, Power down by 0.21% were the only loser indices on the BSE.

The top gainers on the Sensex were, Cipla up by 4.22%, Wipro up by 4.11%, Sun Pharma up by 3.55%, Tata Steel up by 3.13% and HDFC up by 2.91%. On the flip side, Sesa Goa down by 2.83%, Coal India down by 1.74%, Maruti Suzuki down by 1.34%, Tata Power down by 1.23% and Tata Motors down by 1.01% were the top losers on the Sensex.

Meanwhile, the differences between Reserve Bank of India (RBI)’s outgoing governor D Subbarao and the government came out in open, with the former squarely blaming the government for the domestic currency's sharp plunge, which he widely attributed to domestic structural factors, in last public speech.

Outgoing RBI governor besides blaming the government for its 'loose fiscal stance' for the current economic woes warned that the root cause of rupee depreciation is 'domestic structural factors'. While, he acknowledged that the speed and timing of Rupee’s depreciation was due to market reaction to US Fed’s tapering plan, but was quick to add that the root cause behind depreciation were the problems in domestic structural factors and not solely the global factors, which were overplayed.

Blaming the loose fiscal stance of government during 2009-12 for slow growth and high inflation, the retiring governor underscored that faster fiscal consolidation could have made the monetary policy calibration less tight. Given that the governor has often been criticized from within the government for his tight money policy at the cost of growth. He blamed the government for mismanaging the Current Account Deficit (CAD), which has been running well above the sustainable level for three years in a row.

He reiterated that only reduction in CAD to a sustainable level could ensure some stability in the currency. Subbarao, however said, that in the interim 'we need to stabilise the market volatility, a task that falls within the domain of the Reserve Bank'.

The CNX Nifty is currently trading at 5,459.05 up by 50 points or 0.92% after trading in a range of 5,467.85 and 5,367.35. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were Bank of Baroda up by 4.51%, Cipla up by 4.11%, Indusin Bank up by 3.81%, Axis Bank up by 3.70% and PNB up by 3.65%. On the flip side, Sesa Goa down by 2.78%, Ambuja Cement down by 2.04%, Ranbaxy down by 1.96%, Power Grid down by 1.95% and Coal India down by 1.80% were the major losers on the index.

The most of the Asian equity indices were trading mixed; Straits Times up by 0.16%, KLSE Composite up by 0.91%, Seoul Composite up by 0.99%, Jakarta Composite up by 0.93%,  Taiwan Weighted up by 1.32% and Shanghai Composite down by 0.44%. While, Hang Seng was down by 0.13% and Nikkei 225 was down by 0.53%.