Benchmarks continue trading in green in afternoon session

Indian equity benchmarks paired some early gains, but continued trading in green in the afternoon session amid buying in auto and capital goods stocks. Sentiments also got support from the Department of Economic Affairs (DEA) Secretary Arvind Mayaram’s statement that the government will be able to meet its disinvestment target of Rs 54,000 crore for the current fiscal despite high volatility in the market in order to check country’s fiscal deficit within target limit. Buying was also witnessed in consumer durables and power stocks. On stock specific movement, BHEL, Tata Power and Cipla were trading up by over 1.5 percent; while, SBI, Wipro and Sun Pharma were trading lower by over 1 percent on BSE. Most of the state-owned banks such as Bank of India, Punjab National Bank and State Bank of India were trading lower by 1-2% on BSE after ratings agencies downgraded ratings for state-owned banks on expectations of a further deterioration in asset quality and a sharp deceleration on economic growth. Further, State Bank of India, the country's largest lender, stock were trading lower by over 1.3 percent as ratings agency Moody's downgraded its outlook on the bank's financial strength rating to 'negative' from 'stable'.

On global front, Asian equity indices were trading in red with Japanese index Nikki down by 0.02 %. Back home, the market breadth remained positive, out of 1,875 stocks traded, 975 stocks advanced, while 771 stocks declined on the BSE.      

The BSE Sensex is currently trading at 19,983.51 up by 82.55 points or 0.41% after trading in a range of 20,050.42 and 19,782.78. There were only 20 stocks advancing against 10 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.41%, while Small cap index up by 0.39%.

The gaining sectoral indice on the BSE were Capital Goods up by 1.27%, Consumer Durables up by 1.08%, Auto up by 1.04% and Power up by 0.64%. While Teck down by 0.14%, IT down by 0.10%, Metal down by 0.10% and Bankex down by 0.06% were remained the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.27%, Tata Power up by 1.90%, Cipla up by 1.54%, Tata Motors up by 1.47% and Gail India up by 1.46%. On the flip side, SBI down by 1.46%, Wipro down by 1.39%, Sun Pharma down by 1.15%, Hindalco Inds down by 1.07% and Sesa Goa down by 1.06% were the only losers on the Sensex.

Meanwhile, Global rating agency Moody's has revised its forecast, on the Indian economic growth, lower to 4.5 per cent for 2013-14 from 5.5 per cent projected earlier, on account of deteriorating macro-economic indicators of the country. Citing depreciating rupee a major hurdle for economic growth, Moody’s said that recent depreciation in the rupee value will increase inflationary pressures in the country and keep domestic interest rates relatively high, which will hinder a recovery in domestic demand growth. Indian economic growth slowed down to four-year low at 4.4 percent in Q1 FY14.     

Moody's also warned that India is among the countries that are most vulnerable to capital outflows as it relies heavily on external funding. By adding further, it said that earlier, US Fed's talk for tapering of monetary stimulus depreciated the rupee by 15 per cent, making it the worst performing currency in Asia. The domestic currency depreciated to a record low of 68.86 to the US dollar on August 28 on account of high foreign institutional investors (FIIs) outflow and high current account deficit (CAD).

Presently, Moody’s had reaffirmed ‘Baa3’ (which is equivalent to BBB minus) sovereign credit rating for India that indicates investment grade but with a stable outlook. It had already raised concerns over the rising inflation, inadequate infrastructure and higher subsidy burden on the government.The CNX Nifty is currently trading at 5,914.00 up by 24.25 points or 0.41% after trading in a range of 5,938.40 and 5,854.55. There were 35 stocks advancing against 15 declines on the index.

The top gainers of the Nifty were BHEL up by 2.97%, Asian Paints up by 2.41%, Tata Power up by 2.15%, Ultra Tech Cement up by 1.79% and Cipla up by 1.68%. On the flip side, BPCL down by 1.50%, SBI down by 1.49%, Hindalco Inds down by 1.29%, Sesa Goa down by 1.03% and Sun Pharma down by 0.99% were the major losers on the index.

Most of the Asian equity indices were trading in red; Straits Times down by 0.03%, Jakarta Composite down by 0.90%, KLSE Composite down by 0.37% and Hang Seng down by 0.90%, Nikki 225 down by 0.02%, Shanghai Composite down by 0.53%, Seoul Composite down by 0.12%. While, Taiwan Weighted up by 0.08%.