Benchmarks trade slightly in the green in early deals

Indian equity benchmarks are trading slightly in the green terrain after a firm opening, rebounding from lower levels after witnessing selling pressure a day earlier on account of US Federal Reserve Chair Janet Yellen’s comments that the Fed may raise interest rates earlier than expected. Some support to the markets came in from Moody’s Analytics report that projected the ouster of the UPA government after a disappointing second term, saying that the BJP is likely to form the next government after the general elections. However, gains remained capped on report that foreign direct investment (FDI) into India grew by a meager 1.5 percent to $2.18 billion in January and for the April-January period, foreign investment inflows dipped 2 percent to $18.74 billion from $19.1 billion during the corresponding period of the previous fiscal.

On the global front, the US markets ended higher on the back of good economic data. Conference Board showed a bigger than expected increase by its index of leading economic indicators, while there was a modest drop in existing home sales and marginal rebound in initial jobless claims in the week ended March 15th. The Asian markets too were trading mostly in the green at this point of time.

Back home, foreign investors bought Indian shares worth $117.87 million on March 20, 2014. On the sectoral front, realty, consumer durables and metal witnessed the maximum gain in trade, while software and technology remained the only losers on the BSE sectoral space. The broader indices too were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1080 shares on the gaining side against 512 shares on the losing side while 82 shares remain unchanged.

The BSE Sensex opened at 21,823.52; about 83 points higher compared to its previous closing of 21740.09, and touched a high and a low of 21,870.11 and 21,763.31 respectively. The index is currently trading at 21,764.60, up by 24.51 points or 0.11%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a strong start with 62.97% stocks advancing against 32.11% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.45% and Small cap gained 0.34%. 

The top gaining sectoral indices on the BSE were, Realty up by 1.51%, Consumer Durables up by 0.99%, Metal up by 0.96%, Power up by 0.72% and Auto up by 0.68%, while IT down by 0.56% and Teck down by 0.33% were the top losers on the sectoral index.

The top gainers on the Sensex were Hindalco up by 1.80%, Tata Steel up by 1.60%, SBI up by 1.31%, Tata Power up by 1.28% and Wipro up by 1.22%. On the flip side, Axis Bank was down by 1.28%, ONGC was down by 0.74%, Infosys was down by 0.70%, TCS was down by 0.65% and Sun Pharma was down by 0.45% were the top losers on the Sensex.

Meanwhile, In order to curb volatility in domestic currency, the Finance Ministry wants the Reserve Bank of India (RBI) to intervene more frequently in the currency market to smoothen volatility. As per the Finance Ministry, the central bank should build reserves when the rupee strengthens and use this to bolster the currency when it depreciates.

Finance Ministry added that intervention at appropriate time also keeps speculators in check citing the example that in early 2008 when the rupee had strengthened to below 40 to the dollar, it could have been appropriate for the RBI to intervene at that time to buy the US currency to curb the appreciation. On the other hand, the central bank is still reluctant to use its reserves of nearly $300 billion to defend the currency when it depreciates, given that most of the amount is borrowed money. 

During 2013, Indian rupee depreciated over 20 percent against the dollar mainly due to high capital outflows amid concerns over the US Fed tapering programme and high CAD. The depreciation in rupee value leads to imports becoming costlier which is a concern for India as it is structurally an import intensive country.

Meanwhile, the RBI has taken some aggressive stance in currency management, sending clear signal that it would act against any speculation. The RBI bought dollars worth of $375 million against the $2.3 billion sold in January’2014, making it a net seller of the US currency after remaining a net buyer of dollars for three months in a row earlier. 

The CNX Nifty opened at 6,515.20; about 32 point higher as compared to its previous closing of 6,483.10, and has touched a high and a low of 6,522.90 and 6,494.85 respectively. The index is currently trading at 6,495.10, up by 12.00 points or 0.19%. There were 37 stocks advancing against 12 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were Tata Steel up by 1.63%, Bank of Baroda up by 1.60%, DLF up by 1.53%, PNB up by 1.49% and JP Associate up by 1.48%. On the flip side, Axis Bank down by 1.16%, ONGC down by 1.15%, Asian Paint down by 1.12%, Infosys down by 0.94% and TCS down by 0.93% were the top losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite increased 15.81 points or 0.79% to 2,009.29, Hang Seng rose 35.36 points or 0.17% to 21,217.52, KLSE Composite climbed 1.58 points or 0.09% to 1,819.75, Seoul Composite up by 13.15 points or 0.69% to 1,942.95 and Straits Times was up by 18.07 points or 0.67% to 3,075.27.

On the flip side, Taiwan Weighted was down by 17.18 points or 0.20% to 8,580.15 and Jakarta Composite down by 4.66 points or 0.10% to 4,694.32.

Japanese stock market remained shut for the trade today for Vernal Equinox holiday.