Benchmarks continue to trade firm on sustained buying activities

Trading from strength to strength, Indian equity markets continue to remain upbeat on sustained buying activities across the board, thanks to positive global cues. In the final session of week, benchmarks after making a gap-up start, went on capturing ground and were now at striking distance of the crucial 20,700 (Sensex) and 6,150 (Nifty) levels respectively, with gains of over 3/4 of a percent.  Meanwhile, broader indices too were contributing to the rally at Dalal Street as both midcap and Smallcap indices were trading higher with gains of over half a percent.

On the global front, a survey showing brisk US manufacturing activity gave Asian stock markets a lift on Friday, though underlying concerns about China's economic growth kept investors from rushing to buy some emerging market assets.

Closer home, while there were no losers on BSE sectoral front, barring realty stocks. The rally at Dalal Street was led by stocks from banking counters, which were on investor’s radar after severe slump in last session. Despite IMF suggesting RBI to go for more interest rate hikes, given the sticky nature of inflation. Following suite were the stocks belonging to Metal and Fast Moving Consumer Goods counters. The overall market breadth on BSE was in the favour of advances which were outnumbering declines in the ratio of 1332:450; while 60 shares remained unchanged.

The BSE Sensex is currently trading at 20695.27, up by 158.63 points or 0.77% after trading in a range of 20725.04 and 20599.91. There were 23 stocks advancing against 7 declines on the index.

The broader indices pared some early gains; the BSE Mid cap index was up by 0.69% and Small cap index gained 0.61%.The top gaining sectoral indices on the BSE were, Bankex up by 1.15%, FMCG up by 1.10%, Metal up by 0.96%, Capital Goods up by 0.67% and IT up by 0.59%, while there were no losers on the sectoral space.

The top gainers on the Sensex were Axis Bank up by 2.28%, ICICI Bank up by 1.73%, ITC up by 1.70%, Tata Steel up by 1.55% and Wirpo up by 1.34%. On the flip side, Bharti Airtel down by 0.96%, Hero MotoCorp down by 0.81%, BHEL down by 0.70%, Cipla down by 0.53% and NTPC down by 0.46% were the top losers on the Sensex.

Meanwhile, the International Monetary Fund (IMF) has lauded India's ability to keep a tight check on spending and monetary policy in the face of snail-paced economic growth and soaring inflation, especially amid difference of opinion over handling these two toxic factors between the government and the Reserve Bank of India (RBI). It was all praises for Indian authorities for their ability to maintain macroeconomic and financial stability amid a challenging macroeconomic landscape.

In consonance with the views, while Finance minister P Chidambaram slashed spending and put in place several measures to ensure that the fiscal deficit was contained at desired level, RBI Governor Raghuram Rajan, a former IMF chief economist, raised the key repo rate by 75 basis points to 8.00 percent since becoming head of India's central bank in September.

IMF however has recommended RBI to go for more interest rate hikes, given the sticky nature of inflation. Further, it also revised its previous forecast upwards to a 4.6 per cent GDP growth in FY14, which would improve to 5.4 per cent in FY15. Though, the new growth estimates are higher than the IMF’s previous forecast of 3.75 per cent in the current fiscal and 5.1 per cent in the next fiscal, India is way more optimistic about economic recovery, given that Interim Budget 2014-15 has pegged the economy’s growth at 4.9 per cent this fiscal and at least 6 per cent in FY15.

Further, the report, which comes just ahead of spring meeting of IMF, said that India was successful to shore up its growth and revive investor sentiments since July last year. The report pointed that while, no further policy changes were assumed in the baseline, but slightly stronger global growth, improving export competitiveness, a favorable monsoon, and a confidence boost from recent policy actions would deliver a modest growth rebound in the near term.

The CNX Nifty is currently trading at 6,141.85, up by 50.40 points or 0.83% after trading in a range of 6,148.60 and 6,108.00. There were 41 stocks advancing against 9 decliners on the index.

The top gainers of the Nifty were BPCL up by 3.69%, Ambuja Cements up by 3.44%, Axis Bank up by 2.28%, Ultratech Cement up by 1.98% and ACC up by 1.85%. On the flip side, Ranbaxy down by 1.29%, DLF down by 1.22%, Bharti Airtel down by 1.18%, Hero MotoCorp down by 0.76% and BHEL down by 0.66% were the top losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng strengthened by 0.50%, Jakarta Composite rose 0.72%, KLSE Composite increased 0.09%, Nikkei 225 surged by 2.88%, Straits Times added 0.56%, KOSPI Composite spurted 1.41% and Taiwan Weighted advanced 0.91% On the flip side, Shanghai Composite down by 1.46% was the only loser among Asian pack.