Markets get a positive start; banking and metal witness some profit booking

Indian markets after a cautious but positive start are trading in a tight range, though there is still not sign of fatigue after the big gains in the last session and barring some profit booking in high fliers of last session banking and metal, all other sectors are retaining their gains with IT taking the lead on the back of weakness in the rupee against dollar. Earlier, the global cues gave mixed signals for the local markets after major US indices closed mostly in green, while the Asian markets made a soft start snapping a three-day advance, barring one or two indices which remained marginally in green. back home, the healthcare sector too is showing good upmove, supported by surge in Ranbaxy on reports that New York Attorney General Eric Schneiderman will announce a settlement with US units of Ranbaxy Laboratories and Teva Pharmaceutical Industries over allegations the two rival generic drug makers made an unlawful agreement to restrict competition.

The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 1102 shares on the gaining side against 444 shares on the losing side while 66 shares remain unchanged.

The BSE Sensex opened at 20643.85; about 9 points higher compared to its previous closing of 20634.21, and touched a high and a low of 20694.42 and 20629.56 respectively. The index is currently trading at 20673.93, up by 39.72 points or 0.19%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a strong start with 68.36% stocks advancing against 27.54% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.65% and Small cap gained 0.88%. 

The top gaining sectoral indices on the BSE were, Healthcare up by 0.94%, IT up by 0.83%, Teck up by 0.76%, Consumer Durables up by 0.33% and Capital Goods up by 0.30%, while Metal down by 0.68%, Power down by 0.03% and Bankex down by 0.03% were the top losers on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 1.31%, BHEL up by 1.20%, Dr Reddys Lab up by 1.14%, Infosys up by 1.13% and  Mahindra & Mahindra up by 0.96%. On the flip side, Tata Steel was down by 1.42%, SSLT was down by 1.26%, HDFC was down by 1.12%, Tata Power was down by 0.88% and Tata Motors was down by 0.41% were the top losers on the Sensex.

Meanwhile, global rating agency Moody's underscored that India's interim budget 2014-15, somewhat termed as populist by the rest, was in line with the expectations and underpin the government's ‘Baa3’ rating with a stable outlook. Moody's stable outlook on India's Baa3 sovereign rating, which incorporates the macro-economic risks posed by the government's high deficit and debt ratios, also takes into account its recent efforts to bring down the fiscal deficit through ad hoc measures. Besides, it also incorporates the medium-term credit support provided by the government's favorable access to domestic savings for the purposes of financing its large borrowing requirements.

However, the rating agency has said that the new government would determine the longer-term fiscal trends that could impact the government's credit profile. Further, it also cautioned that India's fiscal position remains 'weak'. Moody’s although acknowledged that India’s fiscal deficit ratios had declined over the last few years, but remained higher than those of similarly rated peers. Moody's further highlighted governments higher-than- budgeted subsidy bill reveals the fiscal position's exposure to commodity prices and exchange-rate fluctuations.

Some of the global rating agencies like Moody's, S&P and Fitch have repeatedly threatened to lower India's credit rating and a downgrade would mean pushing the country's sovereign rating to junk status, making overseas borrowings by corporates costlier. In the interim budget 2014-15, the government pegged fiscal deficit for the current financial year to be contained at 4.6 per cent of GDP, which is lower than the fiscal deficit of 4.9 per cent of GDP in the previous financial year.

The CNX Nifty opened at 6,132.05; about 5 point higher as compared to its previous closing of 6,127.10, and has touched a high and a low of 6,143.75 and 6,125.75 respectively. The index is currently trading at 6,140.20, up by 13.10 points or 0.21%. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 3.39%, UltraTech Cement up by 1.35%, Sun Pharma up by 1.33%, BHEL up by 1.30% and ACC up by 1.29%. On the flip side, Jindal Steel down by 2.12%, Tata Steel down by 1.45%, HDFC down by 1.14%, Kotak Bank down by 1.06% and SSLT down by 0.98% were the top losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng dropped 16.85 points or 0.07% to 22,570.87, KLSE Composite slipped by 1.83 points or 0.10% to 1,823.41, Nikkei 225 crumbled 96.43 points or 0.65% to 14,746.81, Seoul Composite decreased 9.18 points or 0.47% to 1,937.73 and Taiwan Weighted was down by 2.10 points or 0.02% to 8,554.13.

On the flip side, Shanghai Composite was up by 12.13 points or 0.57% to 2,131.20, Jakarta Composite rose 12.78 points or 0.28% to 4,568.98 and Straits Times was up by 15.83 points or 0.52% to 3,086.61.