Firm trade prevails at highest point of the day

Indian equities added gains to continue firm trade hovering near the highest point of the day in the late afternoon session on account of buying in front line counters. The market started off the early trade in red after International Monetary Fund (IMF) further cut India’s current fiscal growth projection to 3.8% from 5.6% as projected in July and 5.7% as expected in April. However, buying emerged in the front line counter on reports that India’s trade deficit narrowed to $6.7 billion last month, compared with $10.9 billion in August, led by fourth consecutive month decline of imports and three consecutive months of double digit growth of country’s export in the month of September. Traders were seen piling positions in Realty, Health Care and Capital Goods stocks, while selling was witnessed in Consumer Durables sector stocks. In scrip specific development, Kaveri Seed Company was trading in green on reports that Bayer CropScience, the crop protection and agri-products arm of German company BayerAG, is in preliminary talks with it to acquire minority stake of less than 26% in the company. However, Kaveri Seed had denied the reports.

On the global front, most of the Asian markets were trading in green while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,950 and 20,100 levels respectively. The market breadth on BSE was positive in the ratio of 1247:990 while 139 scrips remained unchanged.  

The BSE Sensex is currently trading at 20154.61, up by 171.00 points or 0.86% after trading in a range of 20166.36 and 19826.96. There were only 17 stocks advancing against 13 declines on the index.

The broader indices were too trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.76% and 0.59% respectively.

The gaining sectoral indices on the BSE were Realty up by 3.88%, Health Care up by 1.88%, Capital Goods up by 1.82%, Oil & Gas up by 1.15% and IT up by 0.97%. While, Consumer Durables down by 0.36% remain the only sole loser indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.21%, L&T up by 2.23%, Tata Power up by 1.90%, Reliance Industries up by 1.88% and HDFC Bank up by 1.86%. On the flip side, Mahindra & Mahindra down by 1.22%, SSTL down by 1.15%, Coal India down by 1.03%, Wipro down by 0.77% and ICICI Bank down by 0.74% were the top losers on the Sensex.

Meanwhile, as per the Paris-based think-tank Organisation for Economic Cooperation and Development (OECD), Indian economy is likely to witness a mediocre average annual growth of 5.9 percent during the 2014-18 period owing to the prevailing macroeconomic weaknesses. The OECD’s forecast for the country is much lower than its projected growth for overall Emerging Asia at 6.9 percent during the same period.

Regarding Indian economic growth, the OECD highlighted that prevailing macro-economic weakness in India particularly widening current account deficits (CAD) has raised concerns over its economic growth. The country CAD widened to a record high of 4.9 percent of GDP in the April-June quarter, 2013 on account of high gold imports and crude oil prices. High CAD also remained the main cause for rupee depreciation, which recently depreciated to a record low of over 68.50 against the US dollar.

Referring to the growth in emerging Asian economies, OECD said that growth in Emerging Asia comprising Southeast Asian nations, China and India would remain robust at 6.9 percent during the 2014-18 period on the back of steady rise in domestic demand. Meanwhile, the projected growth in the region is less than the 8.6 percent registered before the global financial crisis (2000-07). The slower rate of growth is mainly due to the moderate rates of expansion in the two largest Emerging Asian economies of China and India. Further, the report highlighted that ongoing volatility in financial markets, triggered by the prospects of tapering of quantitative easing in the US, may trigger crisis in the emerging Asia.

The CNX Nifty is currently trading at 5,977.25 up by 48.85 points or 0.82% after trading in a range of 5,979.40 and 5,877.10. There were 31 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were DLF up by 6.34%, JP Associate up by 5.14%, Sun Pharma up by 4.21%, NMDC up by 3.78% and Lupin up 2.80%. On the flip side, M&M down by 1.52%, ACC down by 1.16%, SSTL down by 1.13%, Coal India down by 1.06% and Cairn India down by 0.88%, were the major losers on the index.

Most of the Asian equity indices were trading in green; Jakarta Composite up by 0.64%, Seoul Composite up by 0.42%, Straits Times up by 0.33%, Nikki 225 up by 1.03% and Shanghai Composite up by 0.62%. While, Hang Seng down by 0.63%, KLSE Composite down by 0.38% and Taiwan Weighted down by 0.37% remain on the losing side.

The European markets were trading in red; France’s CAC 40 was down 0.11%, Germany’s DAX lost 0.07% and UK’s FTSE 100 dropped 0.24%.