Benchmarks recover from day’s low; broader indices continue to outperform

Recovering from day’s low, benchmark equity indices gained bit of momentum however were still trading below the neutral line in red, with loss of over quarter of a percent in afternoon deals. However, going further in the session Markets could bounce back into positive territory tailing positive start of European markets. Presently, off day’s high, while Sensex and Nifty were little short of the crucial 22,550 and 6750 levels respectively. Conversely, broader indices outperforming larger peers were trading with gains in range of 0.25%-0.50%. On the global front, against the backdrop of indecisive performance of Asian counterparts, European share market got off to a positive start amidst caution ahead of outcome of U.S. Federal Reserve's policy meet on late Wednesday and a clutch of US economic data in the week ahead. Closer home, most of the sectoral indices on BSE were trading into positive terrain, nevertheless prominent gainers were stocks belonging to Consumer Durables, Realty and Information Technology counters which garnered maximum investors’ interest. On the flip side, stocks from Metal, Fast moving consumer goods and Auto counters were witnessing maximum brunt of profit-booking. Amongst non-sectoral guage activity, telecom stocks rang loud after The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) Tuesday cleared the 3G intra-circle roaming agreements signed between Bharti Airtel, Vodafone India and Idea Cellular, saying the pacts didn't violate any license conditions and also quashed the penalties levied on the three operators by the telecom department (DoT). The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 925:886; while 49 shares remained unchanged. The BSE Sensex is currently trading at 22545.85, down by 85.76 points or 0.38% after trading in a range of 22,681.89 and 22,470.43. There were 9 stocks advancing against 21 stocks declining on the index. The broader indices have added gains; the BSE Mid cap index was up by 0.29%, while Small cap index up by 0.57%. The gaining sectoral indices on the BSE were Consumer Durables up by 0.78% Realty up by 0.59%, IT up by 0.35%, Teck up by 0.26% and Capital Goods were up by 0.09%. While, Metal down by 1.58%, FMCG down by 0.76%, Auto down by 0.71% Bankex down by 0.58% and Power down by 0.37% were the losing indices on BSE.    The top gainers on the Sensex were Wipro up by 1.03%, Sun Pharma up by 0.57%, L&T up by 0.41%, ONGC up by 0.30% and Infosys up by 0.25%. On the flip side, Tata Steel down by 3.13%, Hindustan Unilever down by 2.17%, Bajaj Auto down by 2.03%, Hindalco Inds down by 1.42% and Cipla down by 1.33%. Meanwhile, the Fitch group entity India Ratings has stated that the new government will need to push strong policy reforms to bring economy back to higher growth trajectory. In its latest report it has stated that though the worst appeared to be over, Indian economy is unlikely to migrate to a high growth phase of around 9% over the next two-to-three years. Indian rating has kept its growth forecast for FY15 at 5.6 %. The rating agency also rejected the possibility of drop in farm productivity saying that the reservoir are a decadal high already and it is too early to assess the impact of possible El Nino. India Meteorological Department (IMD) predicted a sub-normal monsoon this year because of the El Nino effect. It has noted that till April 3, 2014 adequate water storage in major reservoirs was 25 per cent higher than last year and 37 per cent higher than the average of last 10 years which will help in alleviating some pressure which is likely to emanate from lower-than-average seasonal rainfall. The rating agency projects seasonal factors primarily rainfall to continue to exert pressure on inflation. However, it expect that both WPI and CPI-based inflation to fall and average out at 5.5 per cent and 8 per cent in FY15. Further, India Ratings estimates current account deficit (CAD) to be $45.4 billion (2.1 percent of GDP) in FY15 as against around $32 billion (1.7% of GDP) last fiscal. Capital flows are expected to be buoyant and are estimated to touch $60 billion in FY15. Rise in foreign currency assets and a manageable CAD will support the rupee, which is expected to settle at around 57-58 by end of FY15. It added that a mild decline in inflation and the rupee appreciation will impact interest rate positively and expects 10-year G-sec rate to settle around 8.3-8.4% by end-March 2015. Regarding the industry growth, the report highlighted that the industrial sector will grow by 4.1 % in FY15 mainly due to better mining and electricity sector performance. Indian economic growth is estimated at around 4.9% during the FY14. The CNX Nifty is currently trading at 6,740.75, down by 20.50 points or 0.30% after trading in a range of 6,779.70 and 6,711.10. There were 22 stocks advancing against 26 declining on the index, while 2 stocks remained unchanged. The top gainers of the Nifty were Grasim up by 2.33%, Ambuja Cement up by 1.82%, Ultratech Cement up by 1.81%, Tech Mahindra up by 1.61% and ACC up by 1.27%. On the flip side, Jindal Steel down by 3.58%, Tata Steel down by 3.11%, HUL down by 2.30%, Bajaj Auto down by 2.19% and Hindalco Inds down by 1.52% were the major losers on the index. Asian equity indices were trading mixed; Hang Seng up by 0.17%, Shanghai Composite up by 0.53% and Taiwan Weighted up by 0.71%. While,  Straits Times was down by 0.44%, Nikkei 225 down by 0.98% and Jakarta Composite down by 0.19%.  European shares got off to a positive start; with CAC 40 adding 0.38%, DAX rising by 0.48% and FTSE 100 advancing 0.22%.