Benchmarks continue firm trade in afternoon session

Indian equity benchmarks continued to trade firm in afternoon session led by gains in frontline blue chip stocks including Bharti Airtel, Cipla and TCS among others. Sentiments got support after India Inc demanded interest rate cut from the Reserve Bank of India (RBI), despite a spurt in inflation to a 14-month high of 7.52 percent in November. Further, the announcement that the committee of manufacturing, chaired by Prime Minister Manmohan Singh, is likely to consider tax incentives and subsidies soon for making the manufacturing sector more competitive also added to the optimistic sentiments. All the sectoral indices on BSE were trading in green except bankex.  Healthcare was the top gaining index on BSE up by over 1.50% followed by Teck and IT both up by 0.80%. Meanwhile the gains in markets remain capped as investors also became little bit cautious ahead of RBI monetary policy review on December 18. On stock specific, Bharti Airtel, Cipla and TCS were trading up by over 2.00%, while, Coal India, HDFC Bank and NTPC down by over 1.00% on BSE. HDFC Bank was trading over 2% lower on BSE at around Rs 667 levels after the RBI barred foreign institutional investors (FIIs) from purchasing shares in the bank after their shareholding reached the maximum prescribed limit.

Among other stocks, Alstom T&D has moved up nearly 2% on NSE at around Rs 181, after the company announced that it has entered into an agreement for sale for its land in Bengaluru for Rs 120 crore. Apollo tyres stock surged after Cooper Tire & Rubber Co on Monday lost its court bid to force Apollo Tyres Ltd to complete their proposed $2.3 billion merger.

On global front, Asian markets were trading in green with Hang Seng up by 0.50%, Nikkei 225 up by 0.71%, Taiwan Weighted up by 0.47%. Back home, the NSE Nifty and BSE Sensex were trading up their psychological 6,100 and 20,500 levels respectively. The market breadth on BSE was positive, out of 2,033 stocks traded, 1,104 stocks advanced, while 755 stocks declined on the BSE.  

The BSE Sensex is currently trading at 20,752.07 up by 92.55 points or 0.45% after trading in a range of 20,784.03 and 20,731.54. There were only 22 stocks advancing against only 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index up by 0.53%.

The gaining sectoral indices on the BSE were Healthcare up by 1.50%, Teck up by 1.07%, IT up by 0.89%, Auto up by 0.63% and Consumer Durable up by 0.50%. While, Bankex was down by 0.26% was the only losing index on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.36%, Cipla up by 2.27%, TCS up by 2.22%, Tata Power up by 2.03% and Sun Pharma up by 1.82%. On the flip side, Coal India down by 2.02%, HDFC Bank down by 2.00%, NTPC down by 1.01%, HDFC down by 0.89% and SBI down by 0.52%.

Meanwhile, in order to provide boost to the country’s manufacturing sector, the committee of manufacturing, chaired by Prime Minister Manmohan Singh, is likely to consider tax incentives and subsidies soon for making the manufacturing sector more competitive. The committee is likely to focus on manufacturing, especially in labour-incentive sectors, which leads to job creation in the country.

Furthermore, the committee is expected to consider measures needed to substitute imports in sectors such as telecom equipment and shipbuilding. Prime Minister Manmohan Singh had already expressed the need to develop a strong domestic manufacturing base in electronics and telecommunications in order to mitigate burden of growing imports for these sectors. India is expected to import electronics products worth $300 billion, which will be more than the value of the country's imports of petroleum products.

The domestic shipbuilding industry, which is even more labour intensive and skill intensive, is import dependent. Meanwhile, the government is of the view that the country is well placed to supply cheap skilled labour that can compete with the best in the world. Present market size of the Indian shipbuilding industry is estimated to be worth $92 billion. Indian manufacturing sector has grown by only 1 percent in Q2 FY14 and industry growth in the first eight months of 2013-14 was recorded at zero percent, reflecting the need of more measures for government to recover the domestic manufacturing sector. Further, sluggish growth in manufacturing and high imports has become main cause for widening current account deficit (CAD) of the country.

The CNX Nifty is currently trading at 6,181.45 up by 26.75 points or 0.43% after trading in a range of 6,190.55 and 6,174.75. There were 18 stocks advancing against 12 declining on the index.

The top gainers of the Nifty were Bharti Airtel up by 4.61%, Ranbaxy up by 4.17%, Cipla up by 2.77%, JP Associates up by 2.34% and TCS up by 2.06%. On the flip side, HDFC Bank down by 2.32%, Coal India down by 2.09%, NTPC down by 1.01%, Power Grid down by 0.96% and HDFC down by 0.85% were the major losers on the index.

The Asian equity indices were trading in Green; Hang Seng up by 0.50%, Nikkei 225 up by 0.71%, Taiwan Weighted up by 0.47%, KLSE Composite up by 0.51%,  Seoul Composite up by 0.33%, Straits Times up by 0.59%, Jakarta Composite up by 1.21%. While, Shanghai Composite down by 0.18%.