MARKETS CLAW BACK

The faith which appeared to be dwindling in the early trade at Dalal Street has now been restored as the benchmark indices after paring the initial gains have enticed some traction since the investor's indulged in buying few front line stocks available at attractive valuation post the three day's declining trajectory of the bourses. The recovery of the bourses also came on the heels of European finance ministers agreeing to safeguard their banks on Tuesday as doubts about whether a planned second bailout package for debt-laden Greece would go ahead, sparked off substantial fears. On the global front, the S&P 500 brushed up against a bear market on Tuesday as investors rushed in to buy technology and other beaten-down sectors and stocks.  Meanwhile, Asian shares too have pared some early losses in early trade. However, the US future indices continued to show downtick in the screen trade. Back home, on the BSE Sectoral front, stocks from Information Technology, Realty, TECk counters stood firm in the trade. However, stocks from Bankex, Consumer Durable and Public Sector Undertaking counters remained the weak spells. The 30 scrip sensitive index-Sensex- on Bombay Stock Exchange (BSE)-adding over 75 points was at sniffing distance of 16k level. Meanwhile, the 50 share index -Nifty-on National Stock Exchange (NSE)- gaining over 25 points was trading above  the 4750 mark. The broader indices too allured some additional gains inline with their front line indices as both midcap and smallcap index were trading up over 0.25% each. The overall market breadth on BSE settled in the favour of advances which outpaced declines in the ratio of 1234:768, while 83 shares remained unchanged.
However, the bourses may once again pare some gains going further as the seasonally adjusted HSBC Markit Business Activity Index, based on a survey of around 400 firms, plunged in September to 49.8 -- its lowest reading since April 2009 -- and below the 50 mark which separates growth from contraction.
The BSE Sensex is currently trading at 15,951.49, up by 86.83 points or 0.55%. The index has touched a high and a low of 16,019.60 and 15,877 respectively. There were 22 stocks advancing against just 8 declines on the index.
The broader indices too enticed further gains; the BSE Mid cap and Small cap indices rose 0.35% and 0.29% respectively.
The top gaining sectoral indices on the BSE were, IT up by 1.48%, Realty up by 1.15%, TECk up by 1.13%, Metal up by 0.98% and  FMCG up by 0.93%. While, Bankex down by 1.35% and CD down by 0.42% remained the only losers on the index.
The top gainers on the Sensex were Jaiprakash Associates up by 3.35%, Tata Motors up by 2.28%, HDFC up by 2.11%, Sterlite Industries up by 1.99% and DLF up by 1.72%.
On the flip side, SBI down by 2.50%, ICICI Bank was down by 2.30%, HUL down by 0.57%, Bharti Airtel down by 0.34% and BHEL down by 0.26% were the top losers on the Sensex.
Meanwhile, despite the deprived revenue collection, which, indicates that the government's financial position is in poorer state compared to the last year, the ministry of finance is confident that the government will achieve its fiscal deficit target of 4.6% of Gross Domestic Product (GDP). Further, the ministry has also ruled out any additional increase in the borrowing programme. Last week, the government had announced that it will borrow additional Rs 53,000 crore.
According to the Controller General of Account's (CGA) data released on September 30, estimated the government fiscal deficit in the first five month of current financial year is at Rs 2.7 lakh crore, which is more than 66% of the budgeted estimate for the current fiscal year. On the other hand, during April-August 2010, the government's fiscal deficit was around 40% of the budget estimate.
A finance ministry official said that this was in line with past trends and last year was an exceptional situation given that the government raked in over Rs 1 lakh crore by auctioning spectrum for third generation (3G) mobile services. 'If you look at the five year moving average, the fiscal deficit was 60.5%. So, we are not completely off the mark. We have not completely deviated from the past trends,' official added.
The government's financial health is also under pressures because of the huge tax refund. In the April-August 2011, the government refunded around Rs 64,000 crore to the taxpayers, which was almost, three times more compared to the past. Because of this, the net tax revenue is around 21.8% of the budget estimate for the 2011-12. The finance ministry official said 'as you see the effect tapering off, we will be back on course at least on the revenue side.'
During the April-September 2011, the direct tax collections grew by around 23.5%, whereas indirect tax increased by 25.5%. The finance ministry is also confident to surpass the direct tax collections target. The official said the government may end up exceeding the direct tax collections by around Rs 10,000 crore, while the effect of revenue lost due to lower duties on fuel would be made up as service tax collections were buoyant.

On the disinvestment target, official said the finance ministry is working on an alternate plan. For the current financial year, the government has set the target of Rs 40,000 crore, however, in the first half of current fiscal year, the government was able to generate around Rs 1,100 crore. Due to uncertainties in capital market, it is likely that the government may miss the disinvestment target.

The S&P CNX Nifty is currently trading at 4,798.85, higher by 26.70 points or 0.56%.  The index has touched a high and low of 4,819.35 and 4,774.45 respectively. There were 34 stocks advancing against 16 declines on the index.
The top gainers of the Nifty were JP Associates up by 3.50%, Tata Motors up by 2.42%, HDFC up by 2.27%, Sterlite Industries up by 2.14% and DLF up by 1.95%.
On the flip side, SBI down by 2.55%, ICICI Bank down by 2.17%, PNB down by 1.08%, BPCL down by 0.70% and SAIL India down by 0.65% were the major losers on the index.
Asian markets trade mixed at this point of time; Jakarta Composite was up by 0.46%, KLSE Composite gained 0.55% and Straits Times up by 0.17%.On the flip side, Nikkei 225 down by 0.91%, Seoul Composite down by 1.72% and Taiwan Weighted down by 0.29%
Stock markets in China remained closed on Wednesday in observance of Golden Week holiday while bourses in Hong Kong too were closed for public holiday.