Indian markets trade with traction in early deals; Sensex regains 21,000 mark

Prolonging their previous session’s northbound journey, Indian equity benchmarks have made a positive start and are trading with traction in morning deals on Friday with frontline gauges recapturing their crucial 21,000 (Sensex) and 6,250 (Nifty) bastions. Some support came in from report that the gross direct tax receipts of the government in April-November period this year rose by 13.18% from a year ago to Rs 3.7 lakh crore, though a bit lower than the 18% growth officially projected. Net direct tax receipts in the same period rose 14.6% to Rs 3.1 lakh crore. Moreover, rally in PSU oil marketing companies too supported the sentiments. Stocks like BPCL and IOC edged higher in early deals after diesel demand has declined this fiscal as monthly price hikes and increased power generation clipped consumption of India’s most consumed fuel.

However, gains remained capped as some concern came in after global ratings agency Moody’s cautioned that there could be downward pressure on India's sovereign rating if growth weakens further and high inflation persists. Moreover, global cues too remained sluggish with the US markets ending lower in last session, on concerns about the outlook for the Federal Reserve's stimulus program after initial jobless claims fell for the week passing by. Moreover, most of the Asian markets were trading lower at this point of time with some of the indices heading for their biggest weekly drop since August.

Back home, on the sectoral front, power witnessed the maximum gain in trade followed by capital goods and auto, while banking remained the lone loser on the BSE sectoral space. The broader indices too were trading with some traction, while the market breadth on the BSE was positive; there were 738 shares on the gaining side against 457 shares on the losing side while 65 shares remain unchanged.

The BSE Sensex opened at 20955.74; about 2 points lower compared to its previous closing of 20957.81, and touched a high and a low of 21049.84 and 20922.45 respectively.

The index is currently trading at 21010.52, up by 52.71 points or 0.25%. There were 20 stocks advancing against 10 declines on the index.

The overall market breadth has made a strong start with 57.91% stocks advancing against 36.31% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.42% and Small cap gained 0.40%. 

The top gaining sectoral indices on the BSE were, Power up by 0.84%, Auto up by 0.83%, Consumer Durables up by 0.79%, Capital Goods up by 0.72% and Oil & Gas up by 0.57%, while Bankex down by 0.46%, IT down by 0.08% and Teck down by 0.07% were the top losers on the sectoral index. The top gainers on the Sensex were BHEL up by 2.64%, Hero MotoCorp up by 2.39%, Coal India up by 2.09%, ONGC up by 2.01% and Bajaj Auto up by 1.42%. On the flip side, Wipro was down by 1.11%, Bharti Airtel was down by 1.01%, HDFC Bank was down by 0.89%, Infosys was down by 0.82% and ICICI Bank was down by 0.64% were the top losers on the Sensex.

Meanwhile, International credit rating agency, Moody’s Investors Service, while retaining stable outlook on India’s lowest investment rating, warned of a weak economy, funding challenges, political uncertainties and a scale back of the quantitative easing by the US Federal Reserve, having negative effect on Indian companies.

In its latest credit analysis report, the rating agency highlighted that downward pressure on the rating could develop, if policies that impair the growth and fiscal outlook, were implemented, or if there was a material decline in foreign exchange reserves coverage of external debt and imports. Besides, the rating agency underscored that the country’ s sovereign rating could also be lowered if forex reserves decline significantly, public sector banks asset quality deteriorated further and high inflation persisted.

Further, Moody’s assigned a negative outlook for India’s non-financial corporate, thereby reflecting macro-economic challenges over next twelve months. While, it assigned ‘negative’ outlook for steel, metals and mining, automobile, and oil refining and marketing, it allotted stable outlook to telecommunications, information technology and business process outsourcing, and exploration and production sector.

It further added that it expects country’s GDP growth to remain weak at 5.5% in the fiscal year ending March 2015, mainly because elections could delay reforms needed to revive the economy. Also, it highlighted that India’s investment climate and competitiveness indicators were weaker than those of similarly rated countries. However, it did make a note of increased policy efforts to induce investment in the last year, the impact of which will not be evident in the near term.The CNX Nifty opened at 6,234.40; about 6 points lower as compared to its previous closing of 6,241.10, and has touched a high and a low of 6,268.15 and 6,230.75 respectively. The index is currently trading at 6,259.75, up by 18.65 points or 0.30%. There were 34 stocks advancing against 16 declines on the index.

The top gainers of the Nifty were Hero MotoCorp up by 2.56%, BHEL up by 2.31%, ONGC up by 2.10%, Coal India up by 1.75% and Power Grid up by 1.66%. On the flip side, Wipro down by 1.00%, Infosys down by 0.66%, Bharti Airtel down by 0.64%, IDFC down by 0.58% and Ambuja Cements down by 0.46% were the top losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 13.77 points or 0.61% to 2,233.30, Hang Seng dropped 51.05 points or 0.22% to 23,661.52, Jakarta Composite contracted 27.04 points or 0.64% to 4,189.85, Nikkei 225 slipped 5.13 points or 0.03% to 15,172.36 and Straits Times was down by 9.21 points or 0.29% to 3,115.17.

On the flip side, KLSE Composite rose 0.36 points or 0.02% to 1,825.22, Seoul Composite increased 2.75 points or 0.14% to 1,987.52 and Taiwan Weighted was up by 32.63 points or 0.39% to 8,408.17.