Benchmarks continue to trade marginally in green

Indian equity benchmarks continued to trade marginally in green amid buying witnessed in realty, consumer durables and healthcare stocks. Investors’ sentiments got support after the output of eight core industries grew by 1.7% at 153.5 in the month of November, boosted by good showing from electricity, cement and Steel sector in percentage terms. Further, PMEAC Chairman C Rangarajan's statement that Indian economy is likely to record 6-6.5 per cent growth in 2014-15 also added to the optimistic sentiments. Meanwhile, market gains remained capped amid selling witnessed in IT and Teck stocks. Investors remained worried over the fiscal deficit front as India’s fiscal deficit in the April-November period reached 94% of the targeted budgetary estimate of Rs 5.42 lakh crore, raising concerns that India may well overshoot the target. On stock specific movement, Hero MotoCorp, Coal India and M&M were trading up by over 0.50%, while, Tata Power, TCS and Wipro were trading down by over 0.60% on BSE. Shares of real estate companies were in focus, trading higher by up to 13% on the BSE as Maharashtra government has increased ready reckoner rates for residential and commercial properties.

Among other stocks, Elder Pharmaceuticals has soared nearly 14% to around Rs 262 on back of heavy volumes on the bourses and HOV Services is locked in upper circuit of 5% at Rs 83.25 on BSE after the company noted that it has appointed Morgan Stanley & Co to explore various strategic options.

On global front, all the major Asian markets are closed today on account of New Year. Back home, the NSE Nifty and BSE Sensex were trading up their psychological 6,300 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,082 stocks traded, 1,323 stocks advanced, while 650 stocks declined on the BSE.

The BSE Sensex is currently trading at 21,177.72 up by 7.04 points or 0.03% after trading in a range of 21,244.35 and 21,166.55. There were 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 0.63%, while Small cap index up by 0.94%.

The gaining sectoral indices on the BSE were Realty up by 2.04%, Consumer Durables up by 0.98%, Healthcare up by 0.64%, Auto up by 0.50% and FMCG up by 0.42%.  While, IT down by 0.49%, Teck down by 0.30% and Power down by 0.16%.

The top gainers on the Sensex were Hero MotoCorp up by 0.93%, Coal India up by 0.76%, M&M up by 0.56%, Cipla up by 0.49% and Gail India up by 0.47%. On the flip side, Tata Power down by 1.48%, TCS down by 0.81%, Wipro down by 0.65%, Axis bank down by 0.50% and BHEL down by 0.48%.

Meanwhile, showcasing the fiscal strain in the economy, India's fiscal deficit reached to Rs 5.1 lakh crore or 94% of the targeted budgetary estimate of Rs 5.42 lakh crore in the April-November period of current fiscal. The government has set target of containing the fiscal deficit at 4.8% of gross domestic production (GDP), while, the recently released fiscal deficit data has raised concerns that India may well overshoot its ambitious fiscal deficit target. On the other hand, Chidambaram has asserted several times that the red line of 4.8 percent of GDP for the fiscal deficit will not be breached. In the year-ago period, the country’s fiscal deficit was 80.4% of the budgeted target and the finance minister was able to contain the deficit at 4.9% of GDP in the last fiscal year.

High fiscal deficit is mainly due to the sluggish revenue collection amid prevailing economic slowdown. Gross direct tax collections rose 13.18% to Rs 3.68 lakh crore during the April-November period while indirect tax collections were up 4.9% at Rs 3.07 lakh crore compared with Rs 2.93 lakh crore in the year earlier. Net tax receipts during the April-November period stood at Rs 5.02 lakh crore, which is 47.6% of the estimated revenue. Conversely, during the first eight months of this fiscal, total expenditure stood at Rs 10.2 lakh crore, 61.3% of the budgeted estimate. The revenue deficit of Rs 3.93 lakh crore at the end of November has already overshot the whole year's target of Rs 3.79 lakh crore.

In order to contain the country's fiscal deficit, the government has been taking a number of measures including banning government departments for holding meetings in 5-star hotels among others to cut government spending in non-critical areas. Furthermore, the government has been expressing confidence to meet the divestment target of Rs 40,000 crore for current fiscal despite the fact it has so far only managed to raise Rs 3,000 crore against the target of Rs 40,000 crore.

The CNX Nifty is currently trading at 6,309.95 up by 5.95 points or 0.09% after trading in a range of 6,327.20 and 6,301.65. There were 36 stocks advancing against 14 declining on the index.

The top gainers of the Nifty were Asian Paints up by 2.49%, DLF up by 2.19%, Ranbaxy up by 2.12%, Lupin up by 1.19% and PNB up by 1.03%. On the flip side, Tata Power down by 1.48%, BHEL down by 0.85%, Wipro down by 0.73%, TCS down by 0.61% and Powergrid down by 0.60% were the major losers on the index.

All the major Asian equity indices remained closed for trade today on account of the New Year.