Benchmarks continue firm trade; Nifty above 6200 mark

Indian equities added gains to continue firm trade in the late afternoon session on account of buying in frontline blue chip counters. Investor’s however maintained cautious approach on poll report which highlighted that India’s economic growth likely slowed to a near decade-low at the end of last year as high interest rates hit factory activity. Traders were seen piling positions in HealthCare, FMCG and Capital Goods stocks, while selling was witnessed in Metal, Realty and PSU sector. In scrip specific development, Dr. Reddy’s Laboratories was trading in green on growing hopes about its US business. The drug maker has launched Sumatriptan injection, used for migraine, for US markets. The market may remain volatile today as traders may roll over positions in the Futures and Options (F&O) segment from the near-month i.e. February 2014 series to next month i.e. March 2014 series. The near month February 2014 F&O contracts will expire today i.e. February 26, 2014. The stock market will remain closed on Thursday i.e. February 27, 2014 on account of Mahashivratri.

On the global front, the Asian markets were trading mixed, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,200 and 20,900 levels respectively. The market breadth on BSE was negative in the ratio of 1247:1269 while 135 scrips remained unchanged.

The BSE Sensex is currently trading at 20962.63, up by 110.16 points or 0.53% after trading in a range of 20976.52 and 20860.02. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.06%, while Small cap index was up by 0.29%.

The gaining sectoral indices on the BSE were HealthCare up by 0.90%, FMCG up by 0.84%, Capital Goods up by 0.69%, Auto up by 0.56% and Bankex up by 0.46%. While, Metal down by 2.03%, Realty down by 1.04% and PSU down by 0.32% were the only losing indices on BSE.   

The top gainers on the Sensex were Gail India up by 2.46%, Wipro up by 2.26%, Dr. Reddy’s Lab up by 2.06%, Sun Pharma up by 2.06% and ITC up by 1.60%. On the flip side, SSLT down by 3.23%, Tata Steel down by 3.02%, Coal India down by 1.85%, Tata Power down by 1.30% and ONGC down by 0.85%.

Meanwhile, commodity market regulator Forward Markets Commission (FMC) is likely to allow higher quantity futures in gold, silver, as well as farm products such as soyabean and wheat. The FMC has discussed with leading bourses like MCX and NCDEX a doubling of exposure limits in these commodities.

The regulator, in order to increase the trade volume on bourses and has been tinkering with norms as giving exchanges the freedom to fix turnover charges for brokers, from the floor of Rs 1 per lakh earlier. During the first 10 months of current fiscal, the trade volume on exchanges has declined by 40 percent to Rs 80 lakh crore from a year earlier after the government introduced a Rs 10 per lakh transaction tax on sellers of non-farm and processed farm futures contracts. Moreover, Rs 5,600 crore scam on commodity spot exchange NSEL eroded the investors’ confidence further. Furthermore, liquidity in gold on metals and energy bourse MCX has declined after government raised import duty on the metal to 10 per cent in a year to contain the widening India’s current account deficit (CAD).

Meanwhile, with the FMC's latest move, hedgers and large speculators in commodity futures contracts would get to trade greater quantities of gold, silver, soyabean and wheat. However, it is expected that the move alone may not help deepen the market due to the absence of substantial two-way liquidity (both buy and sell sides) in many contracts, restricting participants to raise their stakes on leading bourses like MCX and NCDEX exchanges.

The CNX Nifty is currently trading at 6,228.25, up by 28.20 points or 0.45% after trading in a range of 6,231.45 and 6,202.10. There were 31 stocks advancing against 19 declining ones on the index.

The top gainers of the Nifty were Gail up by 2.75%, Dr. Reddy’s Lab up by 2.27%, Sun Pharma up by 2.25%, Wipro up by 2.13% and BPCL up by 2.00%. On the flip side, NMDC down by 3.72%, SSLT down by 3.15%, Tata Steel down by 2.93%, JP Associates down by 2.32% and IDFC down by 2.04% were the major losers on the index.

The Asian equity indices were trading mixed; Hang Seng up by 0.54%, Shanghai Composite up by 0.35%, Seoul Composite up by 0.30% and Taiwan Weighted up by 0.29%.

On the flip side, Nikkei down by 0.54%, Straits Times down by 0.50%, Jakarta Composite down 1.08% and KLSE Composite was down by 0.32%.  

The European markets were trading in red; France’s CAC 40 was down 0.20%, Germany’s DAX was down 0.05% and UK’s FTSE 100 dropped 0.32%.