Benchmarks recover from initial losses on fresh buying

A bout of volatility was witnessed in early trade as benchmarks regained positive terrain after opening lower triggered by weak Asian stocks. The revised US GDP data made investors cautious that the bond purchase program might be scaled back sooner than expected. The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, December 5, 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1,151.51 crore on Thursday, as per provisional data from the stock exchanges. Moreover, 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.

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.

On the global front, 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, traders were buying, Consumer Durables, Power and Auto while selling were seen in Bankex on the BSE. Rally in PSU oil marketing companies too supported the sentiments. Stocks like BPCL and IOC edged higher after diesel demand has declined this fiscal as monthly price hikes and increased power generation clipped consumption of India’s most consumed fuel. 

The market breadth on BSE remains positive with advances to declines in the ratio of 904:760. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,900 and 6,250 levels respectively. The BSE Sensex is currently trading at 20984.98 up by 27.17 points or 0.13% after trading in a range of 21049.84 and 20922.45. There were 19 stocks advancing against 11 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.41% and Small cap index gained 0.24%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.90%, Power up by 1.06%, Auto up by 1.02%, Oil & Gas up by 0.56% and Capital Goods up by 0.47% and while Bankex down by 0.47% was the only loser on the sectoral index. 

The top gainers on the Sensex were Hero MotoCorp up by 2.71%, ONGC up by 1.96%, BHEL up by 1.93%, Coal India up by 1.93%, and NTPC up by 1.39%. On the flip side, Bharti Airtel was down by 1.03%, HDFC Bank was down by 0.91%, Hindalco Inds was down by 0.90% , Wipro was down by 0.85%, and HDFC was down by 0.74% were the top losers on the Sensex.

Meanwhile, As per the HSBC survey, business activity in emerging markets grew at the fastest rate in eight months in November. The composite HSBC emerging markets index increased to 52.1 in the reported month from 51.7 in October and also remained above sub-50.0 level that divides expansions in activity from contractions. The increase in index was mainly on the back of strong momentum in Chinese manufacturing activity where stronger domestic demand drove manufacturing growth to its sharpest increase since March.

China HSBC composite manufacturing and services PMI for China increased to 52.3 in November from 51.8 in October. Meanwhile, the HSBC composite manufacturing and services PMI for Brazil and Russia, though witnessed a decline over the previous month, yet remained above the 50 mark. The PMI for Brazil declined to 51.8 in November from 52 in the previous month and for Russia it fell to 52.2 from 53.3. The survey further added that other emerging markets also saw faster growth in manufacturing, with Central and Eastern Europe and Turkey benefiting from the euro zone`s ongoing recovery.

India`s large but challenged economy weighed on the index, with a fifth month of overall contraction. The HSBC index for India increased in November to 48.5 over the previous month (47.5) but remained below the 50 mark that indicates expansion. Referring to the growth in India, the HSBC said that manufacturing business conditions in the country are turning to positive after a few months of contraction. Private sector outlook in India is likely to increase in near future.  Among the largest emerging markets, Brazil continued to post a marked degree of sentiment regarding future output as compared to China and India. Meanwhile, Russian firms were less optimistic about future growth. 

The CNX Nifty is currently trading at 6,250.20 up by 9.10 points or 0.15% after trading in a range of 6,268.15 and 6,230.75. There were 33 stocks advancing against 17 stock declines on the index.

The top gainers of the Nifty were Hero MotoCorp up by 2.83%, Power Grid up by 1.92%, Coal India up by 1.84%, BHEL up by 1.75% and ONGC up by 1.67%. On the flip side, IDFC down by 1.55%, Wipro down by 1.09%, Bharti Airtel down by 1.03%, JP Associates down by 0.99%, and HDFC Bank down by 0.97% 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, Seoul Composite decreased 0.47 points or 0.02% to 1,984.30 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, Nikkei 225 up by 61.80 points or 0.41% to 15,239.29 and Taiwan Weighted was up by 32.63 points or 0.39% to 8,408.17.