Benchmarks reverse gear to trade in green; Nifty nears the crucial 6,100 mark

Indian equity markets have now reversed gears to trade in green thanks to lower level buying amidst positive regional counterparts. Market unease that an 11th hour deal to break a U.S. fiscal impasse had merely pushed back the prospect of another bruising fight in Washington, leading to negative European markets opening, was capping the further upside of local equity markets. Nevertheless, both, Sensex and Nifty, up with slender gains, were nearing the crucial 20,600 and 6100 psychological levels respectively. Meanwhile, broader indices continuing to trade in fine contour were trading higher with gains of above 0.25%.

Sectorally, Oil & Gas, Fast Moving Consumer Goods and Consumer Durables counters were the pillars of market’s strength, while Information Technology, Capital Goods and Banking stocks were major pockets of weakness. Profit-booking at higher levels post better than expected results from Infosys, TCS and HCL Technologies, led to the slide of IT pivotal. Meanwhile, banking stocks were trading lackluster after reports suggested of FII reducing their exposure in Banking stocks during September quarter on concerns of margin stress due to slowdown in the economy, rising non-performing assets and higher cost of funds. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1157:945; while 142 shares remained unchanged.

The BSE Sensex is currently trading at 20582.62, up by 35.00 points or 0.17% after trading in a range of 20,629.80 and 20,471.25. There were only 19 stocks advancing against 11 declines on the index.

The broader indices continued to trade in fine contour; the BSE Mid and Small cap indices trading higher by 0.64% and 0.38% respectively.

The gaining sectoral indices on the BSE were Oil and Gas up by 2.12%, FMCG up by 1.50%, Consumer Durables up by 0.76%, PSU up by 0.63% and Metal up by 0.53%. While, IT down by 1.54%,Capital Goods down by 1.21%, Teck down by 0.98%, Bankex down by 0.64% and Auto down by 0.04% were remained the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.75%, Bajaj Auto up by 2.39%, RIL up by 2.34%, Bharti Airtel up by 2.32% and ITC up by 1.71%. On the flip side, Tata Motors down by 3.68%, TCS down by 3.30%, L&T down by 2.20%, ICICI Bank down by 0.87% and Cipla up by 0.61%, were the top losers on the Sensex.

Meanwhile, giving respite to government's concern over the widening current account deficit (CAD) of the country, Planning Commission has estimated that India’s CAD will be around 2.5 percent of GDP in current fiscal, which is sharply lower than Finance Ministry's target of $70 billion or 3.7 percent of GDP. Planning Commission projection is based on a sharp decline in gold imports and better-than-expected growth in exports. Indian exports increased by 11.15%, a double-digit growth for the third consecutive month to $27.68 billion for the month of September. Imports of gold and silver plunged more than 80% to $0.8 billion in September from $4.6 billion a year earlier.

With the significant double-digit growth in country’s exports and a sharp contraction in imports, India’s trade deficit in September fell to its narrowest level in two-and-half years to $6.76 billion as against $17.15 billion in the same month of previous year and $10.9 billion recorded in August, 2013. Indian gold import bill for 2013-14 is expected to be $35-38 billion against $56 billion in 2012-13. Further, Planning Commission said, in case of increase in gold imports due to festival demand, it could easily be financed and thus the overall deficit would be not be impacted. On the other hand, the government is confident about improving country’s merchandise exports to $325 billion against $309 billion estimated earlier. 

CAD, the difference between inflow and outflow of foreign exchange widened to a record high of 4.9 per cent of GDP in the April-June quarter, 2013. High CAD also remained the main reason for rupee depreciation, which depreciated by over 15 percent against dollar in 2013.

The CNX Nifty is currently trading at 6,091.80, up by 2.75 points or 0.05% after trading in a range of 6,110.75 and 6,064.85. There were 29 stocks advancing against 20 declines on the index, while 1 stock remained unchanged.

The top gainers of the Nifty were JP Associate up by 7.07%, ONGC up by 2.74%, Bajaj Auto up by 2.32%, Bharti AIrtel and Reliance Industries were up by 2.18%. On the flip side, HCL Technologies down by 4.41%, Tata Motors down by 3.48%, TCS down by 3.23%, IndusInd Bank down by 2.72% and L&T down by 2.41% were the major losers on the index.

The Asian equity indices were trading in Green; Jakarta Composite up by 0.35%, Taiwan Weighted up by 0.51%, Seoul Composite up by 0.29%. Nikki 225 up by 0.83%, KLSE Composite up by 0.36% and Straits Times up by 0.76%. While, Shanghai Composite down by 0.19% and Hang Seng down by 0.11% were losers.

European markets got off to a negative start; with CAC 40 declining by 0.25%, DAX sliding by 0.26% and FTSE 100 losing 0.14%.