Benchmarks continue to remain volatile in late morning trade

Benchmark equity indices continue to remain volatile with sensex and nifty swinging between negative and positive zone in late morning trade. Market participants turned cautious on report that the rupee has deprecated against the US dollar in early trade at the Interbank Foreign Exchange market due to increased demand for the US currency from importers. There was also some concern ahead of the December quarter gross domestic product (GDP) reading on Friday, which will be closely watched by the market to gauge whether the decline in economic growth has stemmed.

However, losses on down- side remained capped as some support came in from Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan’s statement that India's Current Account Deficit (CAD) is expected to be around two percent of GDP during the current fiscal on the back of slackening imports and increased shipments. Investors and traders will keenly track the trends in rollover of January derivative contracts to February for cues on near-term trends. The F&O segment expiry session will be held on Wednesday this month, as markets would remain closed on Thursday for Mahashivratri.

On the global front, Asian stocks dropped and the dollar firmed on Monday, as investors looked past the Group of 20’s latest commitment to spur faster global growth and turned their focus back to the impact of the US Federal Reserve’s stimulus withdrawal. Moreover, Chinese shares in the mainland and Hong Kong suffering major plunge on reports of property-lending curbs. Back home, traders were buying, Capital Goods, Healthcare and Realty stocks, while selling was seen in Power, Consumer Durables and IT.

The market breadth on BSE remains positive with advances to declines in the ratio of 999:801. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,700 and 6,100 levels respectively. The BSE Sensex is currently trading at 20681.33 down by 19.42 points or 0.09% after trading in a range of 20708.99 and 20637.30. There were 18 stocks advancing against 12 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.30% and Small cap index gained 0.24%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.86%, Healthcare up by 1.04%, Realty up by 0.29%, Auto up by 0.27% and FMCG up by 0.23% while Power down by 1.58%, Consumer Durables down by 0.58%, IT down by 0.49%, Metal down by 0.42%, and Bankex down by 0.33% were the top losers on the sectoral index.

The top gainers on the Sensex were Tata Power up by 4.38%, L&T up by 2.13%, BHEL up by 1.99%, Axis Bank up by 1.75%, and Sun Pharma up by 1.25%. On the flip side, NTPC was down by 10.37%, Tata Steel was down by 1.39%, TCS was down by 1.30%, HDFC Bank  was down by 0.96% and  HDFC was down by 0.86% were the top losers on the Sensex.

Meanwhile, Satisfied with the outcome of G20 meeting, Finance Minister P Chidambaram has stated that India's concern with regards to the US Fed tapering and IMF quota reforms were addressed during the G20 meet. The G20 Summit 2014 on February 22-23 was attended by Finance Ministers of several important countries including the US, Japan, France and Australia along with the representatives of global bodies like the International Monetary Fund (IMF) and European Central Bank. Collectively G20 nations represent 85 per cent of the global economy.

Chidambaram has expressed concern over the impact of monetary easing by the US Federal Reserve on the developing countries and highlighted the need to expedite IMF quota reforms to extend more benefits to emerging economies in the multilateral lending body. Emerging economies favored the IMF quota, however, it hit a roadblock as the US refused to increase its contribution. The IMF’s 14th round of quota reforms began in 2010 and will be completed by April 2014. Further, Finance Minister, during the G20 summit, asserted that developed nations should cooperate with developing countries during the economic recovery. Chidambaram has further stated that developing countries require more and better infrastructure, therefore India has strongly supported the World Bank’s proposal to set up a global infrastructure facility.

The G20 Summit adopted a soft target of raising the global GDP by 2 percent in the next five years. Central banks of G20 nations also maintained their commitment that monetary policy settings will continue to be carefully calibrated and communicated, considering the impacts on the global economy.  

The CNX Nifty is currently trading at 6,145.90 down by 9.55 points or 0.16% after trading in a range of 6,153.10 and 6,130.80. There were 25 stocks advancing against 25 decliners on the index.

The top gainers of the Nifty were Tata Power up by 4.25%, BHEL up by 2.06%, L&T up by 1.97%, Lupin up by 1.84%, and Axis Bank up by 1.59%. On the flip side, NTPC down by 10.57%, Jindal Steel down by 2.17%, Tata Steel down by 1.51%, TCS down by 1.34% and Power Grid down by 1.26% were the top losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined by 42.99 points or 2.03% to 2,070.70, Hang Seng dropped 289.29 points or 1.28% to 22,278.95, Jakarta Composite contracted 10.47 points or 0.23% to 4,635.68, KLSE Composite slipped by 3.92 points or 0.21% to 1,826.82, Nikkei 225 tumbled 135.04 points or 0.91% to 14,730.63, Seoul Composite dropped 7.71 points or 0.39% to 1,950.12 and Taiwan Weighted was down by 44.95 points or 0.52% to 8,556.91. On the flip side, Straits Times was up by 0.98 points or 0.03% to 3,100.91.