Benchmarks extend early gains; trade at intra-day high level

Indian equity benchmarks extended early gains to trade near their intra-day high level in the afternoon session amid buying witnessed in auto, oil and gas and IT stocks. Investors’ sentiments got a boost after Finance Minister P Chidambaram asserted that India is better prepared to deal with the impact of US stimulus withdrawal adding that consequences will not be large and more steps will be taken, if needed. Auto index was the top gainer up by nearly 1.36% on BSE followed by oil and gas and IT stocks both up by over 1.20%. On stock specific movement, Wipro, ONGC and M&M were trading up by over 2.30%, while, Sun Pharma, SSLT and L&T were trading down by over 0.80%. On stock specific movement, RIL gained over 1.6% on CCEA decision to double the price of gas produced from its KG-D6 block to $8.4 a million British thermal unit (mBtu) from April 1, 2014.

Among other stocks, Welspun Corp has rallied nearly12% to around Rs 49.40 on back of heavy volumes after promoter bought more than 50,000 shares through open market. Shares of information technology (IT) companies mainly mid and small-sized are in demand with many of them trading at their 52-week highs as they have hinted at a marginal uptick in spending by clients and a rise in discretionary spending during 2014 on better macro-economic environment in United States and European Union.

On global front, Asian markets were trading mixed with Straits Times up by 0.57% and Hang Seng down by 0.52 % amid rising concerns over the US Fed taper programme. 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 2,128 stocks traded, 1,223 stocks advanced, while 763 stocks declined on the BSE.  

The BSE Sensex is currently trading at 20,806.55 up by 97.93 points or 0.47% after trading in a range of 20,825.72 and 20,745.94. There were 21 stocks advancing against only 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.05%, while Small cap index up by 0.78%.

The gaining sectoral indices on the BSE were Auto up by 1.36%, Oil and Gas up by 1.27%, IT up by 1.27%, Realty up by 1.09% and Teck up by 0.97%. While, Capital Goods up by 0.45% and FMCG up by 0.25% were losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.01%, ONGC up by 1.57%, M&M up by 1.50%, Hero Motocorp up by 1.42% and Maruti Suzuki up by 1.42%. On the flip side, Sun Pharma down by 1.69%, SSLT down by 1.20%, L&T down by 0.88%, ITC down by 0.61% and Bharti Airtel down by 0.51%.

Meanwhile, adding pressure over the already deteriorating macro-economic indicators of the country, the United Nations' World Economic Situation and Prospects 2014 report has lowered the India's economic growth forecast for 2013 to 4.8 percent from 6.1 percent projected earlier. UN’s report has also lowered the growth forecast for 2014 to 5.3 per cent from 6.5 percent earlier and project 5.7 percent economic growth by 2015. Meanwhile, India's economic growth in the first half of 2013-14 stood at 4.6 percent.

Further, UN World Economic report highlighted that emerging markets should be well prepared to deal with the impact of US Federal Reserve's quantitative easing programme. The US Federal Reserve on December 19 announced that it would reduce the monthly bond purchases by $10 billion each month from the existing level of $85 billion from January.

Referring to world economy’s growth, UN noted that the potential for substantial downside risks of the premature tapering of quantitative easing could impact global growth. The world's economic weakness has stemmed from developed economies including the euro area and the US, which continue to struggle. Declining capital inflows to many developing countries and increasing volatility in flow particularly owing to the US Fed taper programme have started putting pressure on global growth. The UN report said the global economy is expected to grow at a pace of 3 percent in 2014. China's economic growth is expected to maintain a pace of about 7.5 percent over the next few years.The CNX Nifty is currently trading at 6,191.60 up by 24.95 points or 0.40% after trading in a range of 6,196.35 and 6,170.35. There were 33 stocks advancing against 17 declining on the index.

The top gainers of the Nifty were Cairn up by 2.20%, Wipro up by 2.17%, Bank of Baroda up by 2.00%, Ranbaxy up by 1.62% and ONGC up by 1.57%. On the flip side, Sun Pharma down by 1.80%, Grasim down by 1.46%, SSLT down by 1.20%, L&T down by 1.05% and NMDC down by 0.96% were the major losers on the index.

The Asian equity indices were trading mixed; Nikkei 225 up by 0.08%,Seoul Composite up by 0.23%, Taiwan Weighted up by 0.01%, Straits Times up by 0.57%. While, Hang Seng down by0.52 %, Jakarta Composite down by 1.11%, KLSE Composite down by 0.32%, and Shanghai Composite down by 1.60%.