Markets continue to trade in green

Indian equity benchmarks paired some early gains, but continued to trade in green amid buying witnessed in consumer durables, teck and IT stocks. Buying sentiments got a boost after NCAER, in its latest survey reported that the Business Confidence Index (BCI) rose by about 21.8 percent in January 2014 to 122.3 points from 100.4 in July-September quarter survey on the back of higher exports, enhanced farm produce and moderation in inflation. Further, firm global cues and appreciation in rupee value against the dollar also added to the optimistic sentiments. However, gains remained capped as investors were seen selling positions in metal and power stocks. Market participants also turned cautious as international rating agency Moody's expects marginal increase in Indian economic growth at 5.5 percent during FY15 citing that the forthcoming elections will delay the reform process and hurt growth. On stock specific movement, BHEL, Bharti Airtel and Wipro were trading up by over 1.40%, while, NTPC, Gail India and Coal India were trading down by over 1.20% on BSE.

NTPC, after losing more than 10% in previous session continued its losing streak and were trading down by over 2% to around Rs 114 as new norms by the electricity regulator CERC is seen negative for the PSUs. Credit Analysis and Research (CARE) decreased for the second day in a row and was down almost 2% to Rs 805 after IDBI rejected bids received from the potential investors. On the other hand, Aurobindo Pharma has surged 5% to around Rs 508 on back of heavy volumes on the bourses. Gujarat Gas Company has rallied nearly 9% to around Rs 242 after its board approved the consolidation of city gas distribution business.

On global front, Asian equity indices were trading in green with Nikkei up by 1.46% and Hang Seng up by 0.18%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,200 and 20,800 levels respectively. The market breadth on BSE was positive, out of 2,241 stocks traded, 1,184 stocks advanced, while 936 stocks declined on the BSE.

The BSE Sensex is currently trading at 20,857.79 up by 46.35 points or 0.22% after trading in a range of 20,912.54 and 20,847.72. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index up by 0.32%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.39%, Teck up by 0.82%, IT up by 0.77%, Healthcare up by 0.41% and FMCG up by 0.35%. While, Metal down by 0.68%, Power down by 0.33% and Oil and Gas down by 0.05% were the losing indices on BSE.   

The top gainers on the Sensex were BHEL up by 2.11%, Bharti Airtel up by 1.50%, Wipro up by 1.41%, Bajaj Auto up by 1.36% and Cipla up by 1.14%. On the flip side, NTPC down by 2.09%, Gail India down by 1.76%, Coal India down by 1.23%, SSLT down by 1.09% and Tata Power down by 0.91%.

Meanwhile, international rating agency Moody's expects marginal increase in Indian economic growth at 5.5 percent during FY15 citing that the forthcoming elections will delay the reform process and hurt growth. Presenting a sober picture of India's economic outlook, Moody’s stated that interest rates in the country will continue to remain high and hence the rupee will continue to be volatile, making it difficult for importers and exporters.

Moody's noted that lower economic growth, volatile exchange rates, rising borrowing costs and slow economic reforms have dampened prospects across many sectors. Moody’s assigned negative outlook for certain domestically focused sectors such as cement, automotive, steel, real estate, metals and mining, and retail which are dependent on regulations and policy-setting. Furthermore, the agency also gave a negative outlook for non-financial corporates in 2014 citing reasons such as weak economy, political uncertainty and an impact of the US Fed’s tapering.

Conversely, the rating agency noted that domestic sectors like exploration and production, IT/business process outsourcing and pharma which depend on the external sector are comparatively better placed. Regarding the pharma sector, Moody’s stated that domestic pharma industry will get benefit from patent expiries in the US, thus gave a stable outlook for the sector. Moreover, it also assigned the stable outlook for telecom sector noting that industry income will improve on the back of consolidation and improved pricing power with operators.

The CNX Nifty is currently trading at 6,202.35 up by 16.25 points or 0.26% after trading in a range of 6,216.85 and 6,197.35. There were only 28 stocks advancing against 22 declining on the index.

The top gainers of the Nifty were Ambuja Cement up by 2.91%, IDFC up by 2.71%, BHEL up by 2.11%, Wipro up by 1.56% and Bharti Airtel up by 1.49%. On the flip side, Gail down by 2.24%, NTPC down by 2.05%, NMDC down by 1.70%, Coal India down by 1.29% and SSLT down by 1.22% were the major losers on the index.

The Asian equity indices were trading in green; Nikkei up by 1.46%, Hang Seng up by 0.18%, Straits Times up by 0.04%, Shanghai Composite up by 0.10% and Taiwan Weighted up by 0.20%. On the flip side, Jakarta Composite down 0.50%, KLSE Composite was down by 0.01% and Seoul Composite down by 1.21%.