Benchmarks pare initial gains in late morning

Indian equity benchmarks have trimmed initial gains and continued to trade in green in late morning deals. Market participants’ sentiments remained boost as the rupee appreciated against the US dollar in early trade on the Interbank Foreign Exchange market on increased foreign fund inflows amid a higher opening in the domestic equity market. Some support to the market also came from report that the Overseas investors bought Indian shares worth Rs 267 crores ($43.03 million) on Monday, provisional exchange data showed.

Market sentiments also improved on the back of latest survey of National Council of Applied Economic Research (NCAER), which said that after a slide in the second quarter of the current fiscal, higher exports, enhanced farm produce and moderation in inflation improved business confidence during the October-December period. The Business Confidence Index (BCI) rose by about 21.8 percent to 122.3 points from 100.4 in July-September quarter, 2013-14. Also, the Reserve Bank of India (RBI) Governor Raghuram Rajan has said that the central bank’s focus is to bring down inflation to boost investor confidence.

On the global front, Asian markets were trading mostly higher at this point of time, tracking positive cues from the US and European markets as telecommunication and health-care companies led gains Back home, traders were buying, Consumer Durables, Teck and IT stocks, while selling was seen in Metal, Power and Oil & Gas.

The market breadth on BSE remains positive with advances to declines in the ratio of 1118:757. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,800 and 6,150 levels respectively. The BSE Sensex is currently trading at 20852.22 up by 40.78 points or 0.20% after trading in a range of 20912.54 and 20847.72. There were 15 stocks advancing against 15 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.45% and Small cap index gained 0.35%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.52%, Teck up by 0.87%, IT up by 0.86%, Metal up by 0.57% and FMCG up by 0.47%, while Metal down by 0.57% Power down by 0.34%, Oil & Gas down by 0.12% and Auto down by 0.05% were the top losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 1.57%, Wipro up by 1.30%, Bharti Airtel up by 1.18%, Infosys up by 0.84% and TCS up by 0.77%. On the flip side, NTPC was down by 2.01%, Gail India was down by 1.89%, Coal India was down by 1.47%, SSLT was down by 1.03% and Axis Bank was down by 0.67% were the top losers on the Sensex

Meanwhile, Keeping inflation battle at the top of agenda, the Reserve Bank of India (RBI) Governor Raghuram Rajan has asserted that the central bank's focus is to bring down inflation to boost investor confidence. Emphasizing the need for India to strengthen its fundamentals like inflation rate, the Governor has stated that if investors have a sense that inflation rate is going to come down, both domestic and international investors would be more prepared to take a bet on the rupee.

RBI had already highlighted that persistence high Inflation has been impacting the economic fundamentals particularly domestic currency. WPI inflation eased to eight-month low at 5.05% in January as compared to 6.16% in December. Meanwhile, the domestic currency has depreciated over 15% during 2013 mainly on account of high gold imports and high capital outflow. 

Regarding the prospect of new government after the May general elections, Raghuram Rajan expressed hope that a stable government after the Lok Sabha elections will continue the broad fiscal policies of the current regime and India may finally get the Goods and Services Tax (GST), an ambitious indirect tax reform measure. The CNX Nifty is currently trading at 6,199.95 up by 13.85 points or 0.22% after trading in a range of 6,216.85 and 6,197.35. There were 28 stocks advancing against 21 decliners while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Ambuja Cements up by 2.87%, IDFC up by 2.71%, BHEL up by 1.50%, Wipro up by 1.43% and ACC up by 1.21%. On the flip side, Gail down by 2.34%, NTPC down by 1.71%, Coal India down by 1.49%, SSLT down by 1.20% and Tata Power down by 0.97% were the top losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite added 1.98 points or 0.10% to 2,078.67, Hang Seng gained by 110.42 points or 0.49% to 22,498.98, Nikkei 225 soared 213.63 points or 1.44% to 15,051.31, Straits Times spurted 2.83 points or 0.09% to 3,108.67, Seoul Composite rose 13.25 points or 0.68% to 1,962.30 and Taiwan Weighted was up by 16.69 points or 0.19% to 8,577.30.

On the flip side, Jakarta Composite declined 24.84 points or 0.54% to 4,598.73 and KLSE Composite was down by 0.16 points or 0.01% to 1,828.52.