Benchmarks continue firm trade; FMCG, Metals leads

Indian equity markets pared minor gains but continued to trade in green in the late afternoon session on account of profit booking in front line counters. The sentiments remained cautious on reports that the macroeconomic uncertainty in India is at a very high level and making consumers and businesses far too cautious about their spending. HSBC also lowered India’s GDP forecast for the current financial year to 4% from 5.5% earlier saying economic uncertainty is likely to weigh on the growth forecast in the coming months. Traders were seen piling position in FMCG, Metals and Consumer Durables stocks. In scrip specific development, Oil Marketing Companies HPCL and BPCL were trading in green as petrol prices have been hiked by Rs 2.35 per litre on falling rupee and firming international oil prices. Meanwhile, diesel prices too have been hiked by 50 paise. Jet Airways was trading firm on reports that Etihad has extended deal deadline with Jet till September-end to win regulatory approvals.

On the global front, most of the Asian markets were trading in green while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,500 and 18,800 levels respectively. The market breadth on BSE was positive in the ratio of 1248:803, while 121 scrips remain unchanged. 

The BSE Sensex is currently trading at 18887.05, up by 267.33 points or 1.44% after trading in a range of 18941.49 and 18678.93. There were only 24 stocks advancing against 6 declines on the index.

The broader indices were too trading ion green; the BSE Mid cap and Small cap indexes were trading higher by 1.14% and 0.96% respectively.

All sectoral indices were trading in green on BSE with FMCG up by 3.58%, Metal up by 2.76%, Consumer Durables up by 1.79%, Oil & Gas up by 1.75% and Realty up by 1.61% among the top most gainers.

The top gainers on the Sensex were, ITC up by 4.61%, Tata Steel up by 4.43%, Maruti Suzuki up by 3.03%, Reliance Industries up by 2.71% and HDFC up by 2.53%. On the flip side, Tata Power down by 2.31%, Mahindra & Mahindra down by 2.18%, NTPC down by 0.54%, HDFC Bank down by 0.53% and Infosys down 0.33% were the top losers on the Sensex.

Meanwhile, the International Monetary Fund (IMF) said that India's large fiscal and current account deficits (CAD) have impacted market confidence. In the previous fiscal, India’s CAD widened to a record high of 4.8 percent of GDP, while, fiscal deficit stood at 4.89 percent of the country’s GDP.

IMF said that high and persistent inflation, sizable un-hedged corporate foreign borrowing and reliance on portfolio inflows are longstanding vulnerabilities that have now been elevated as global liquidity conditions tighten, and thus clearly affecting the investors’ confidence. Overseas investors have pulled out nearly $2.5 billion from the Indian capital markets in August. Meanwhile, in June, Foreign Institutional Investors (FIIs) had pulled out a record $ 7.5 billion from the Indian capital markets.

By adding further, IMF said that Indian economy is also battling with depreciating rupee, which has dropped over 23 percent since April and had recently touched a low of 68.80 to a dollar. The current economic situation of the country presents a challenge to the government, but also reflects an opportunity for it to continue with its policy efforts on a variety of fronts, it added. In the April to June quarter of current fiscal, the country’s economic growth slowed down to 4.4 percent, lowest in four years.

The CNX Nifty is currently trading at 5,546.20, up by 74.40 points or 1.36% after trading in a range of 5,564.90 and 5,478.85. There were 38 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were JP Associates up by 6.95%, Ranbaxy Laboratories up by 6.09%, IndusInd Bank up by 5.14%, Tata Steel up by 4.58% and ITC up 4.32%. On the flip side, Kotak Bank down by 2.70%, Tata Power down by 2.44%, M&M down by 2.44%, ACC down by 1.10%, and HDFC Bank down by 0.67% were the major losers on the index.

The Asian equity indices were trading mostly in green; Straits Times up by 0.68%, Taiwan Weighted up by 0.21%, Shanghai Composite up by 0.01%, Hang Seng up by 2.04% and Nikkei 225 was up by 1.37% while, KLSE Composite down by 0.60%, Seoul Composite down by 0.08% and Jakarta Composite down by 2.60%.

The European markets were trading in green; France’s CAC 40 was up 1.57%, Germany’s DAX added 1.52% and UK’s FTSE 100 gained 0.19%.