Benchmarks add gains; trade continues in green

Indian equities added gains to continue firm trade in the late afternoon session on account of buying in frontline counters. However, prevailing caution ahead of RBI’s policy review on January 28, 2014, is mainly weighing on the sentiments after earlier expectations for the RBI to hold rates have been thrown into doubt after the central bank recommended making taming high consumer inflation a priority. Traders were seen piling positions in Capital Goods, FMCG and HealthCare stocks while selling was witnessed in Auto, Metal and Oil & Gas sector stocks. In scrip specific development, Larsen & Toubro (L&T) was trading firm after the company posted a 22.44% increase in standalone net profit for the December quarter. KPIT Technologies dropped after its consolidated net profit fell 8.93% to Rs 60.77 crore on 3.53% fall in net sales to Rs 677.93 crore in Q3 December 2013 over Q2 September 2013.

On the global front, the Asian markets barring Jakarta Composite were trading in red, while the European markets were trading on a mixed note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,300 and 21,300 levels respectively. The market breadth on BSE was negative in the ratio of 1167:1349 while 146 scrips remained unchanged.

The BSE Sensex is currently trading at 21368.63 up by 30.96 points or 0.15% after trading in a range of 21,378.07 and 21,264.71. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading on a mixed note; the BSE Mid cap index was down by 0.36%, while Small cap index was up by 0.15%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.84%, FMCG up 0.24%, HealthCare up by 0.15% and Consumer Durables up by 0.09%. While, Auto down by 1.01%, Metal down by 0.51%, Oil & Gas down by 0.46%, IT down by 0.43% and PSU down by 0.35% were the top losing indices on BSE.  

The top gainers on the Sensex were L&T up by 2.56%, Gail India up by 2.13%, HDFC up by 1.69%, Axis Bank up by 1.47% and Sun Pharma up by 1.43%. On the flip side, M&M down by 2.57%, ONGC down by 1.40%, NTPC down by 1.21%, Tata Steel down by 1.08% and SSLT down by 0.97% were the major losers on the Sensex.

Meanwhile, ahead of the Reserve Bank of India (RBI) monetary policy meet on January 28, Economic Affairs Secretary Arvind Mayaram has stated that signs of moderation in WPI inflation have strengthened the case for a cut in interest rates to boost economic growth. Arvind Mayaram has emphasized that there could not be a case for rate hike by the central bank at this point of time when industrial growth continues to be in the red, prevailing sluggish investments scenario and low employment opportunities in the country. WPI inflation eased to five-month low at 6.16% in December as compared to 7.52% in November and 7.31% during the corresponding month of the previous year.

Meanwhile, the central bank had already noted the fight to tame inflation would remain its top of agenda and has been continually raising the policy rates over the past few months. Prevailing high interest rates scenario in economy has been adversely impacting the growth of Indian industries. Indian industrial output registered the worst performance in six months with contraction of 2.1% in November on y-o-y basis as compared to 1.8% in October. Indian industrial production growth contracted by 0.2% during the April-November 2013-14 period from a year earlier owing to the high interest rates and prevailing economic downturn.

Earlier, India Inc had also urged the Reserve Bank to lower interest rates in order to provide boost to the growth of Indian industries. India Inc added that achieving a sustained moderation in WPI is an issue for the country, however, the recently released inflation number gives scope for cutting the interest rates in a bid to improve domestic supply response.

The CNX Nifty is currently trading at 6,342.15, up by 3.20 points or 0.05% after trading in a range of 6,348.00 and 6,316.40. There were 22 stocks advancing against 28 declining ones on the index.

The top gainers of the Nifty were L&T up by 2.60%, Gail India up by 2.24%, Jindal Steel up by 2.01%, HDFC up by 1.83% and Sun Pharma up by 1.46%. On the flip side, HCL Tech down by 2.93%, M&M down by 2.71%, ONGC down by 1.55%, IndusInd Bank down by 1.43% and NTPC down by 1.36% were the major losers on the index.

All the Asian equity indices were trading in red barring Jakarta Composite which was up by 0.29%; while Seoul Composite down by 1.16%, Shanghai Composite down by 0.47%, Nikkei 225 down by 0.79%, Hang Seng down by 1.51%, Taiwan Weighted down by 0.35%, Straits Times down by 1.05%  and KLSE Composite down by 0.32%.

The European markets were trading on a mixed note; France’s CAC 40 was up 0.20%, Germany’s DAX lost 0.17% and UK’s FTSE 100 gained 0.04%.