TRADING FIRM

Although benchmark indices have cooled a tad from intra-day's high but continue to trade in fine contour on continued buying by funds and retail investors after RBI aggressive stance of slashing short-term lending rate by 50bps. Strong global cues are an added advantage for Indian equity markets which for third consecutive session are showing heart tendering moves. Barometer 30 share index of BSE's Sensex is currently holding off its 17500 bastion, with gains of close to a percentage points. Similarly, widely followed 50 share index of NSE's Nifty is currently oscillating above the 5300 psychological level. However, broader indices once again are outperforming the frontliners.

On the global front, stabilizing risk appetite lifted Asian shares and riskier currencies on Wednesday, after firm demand at Spanish debt sales, positive US. corporate earnings and an improved sentiment in a Germany survey boosted investor confidence. Spain sold a more-than-planned 3.2 billion euros of 12- and 18-month bills on Tuesday due to good demand from domestic banks, easing some concerns about the country's refinancing ability. The US future indices continued to show an uptick in the screen trade.

Back on the home turf, stocks from Consumer Durable (CD), Auto and Oil & Gas counters were leading the gainers from the front, however, stocks from Fast Moving Consumer Goods (FMCG) remained the lone loser on the index. In stocks specific action, shares of HCL Technologies surging over 5% in early trade spurred optimism among IT index. India's fourth-largest software services exporter, reported a 28% rise in quarterly net profit, beating expectations, after customers boosted orders to cut operational costs amid the global economic uncertainty. While, Tobacco-to-hotels major ITC emerged as the most influential stock on the benchmark Sensex, for the first time ever, after it overtook Reliance Industries in terms of weightage. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1639:590, while 92 shares remained unchanged.

The BSE Sensex is currently trading at 17,500.40, up by 142.46 points or 0.82%. The index has touched a high and low of 17,522.80 and 17,447.26 respectively. There were 26 stocks advancing against only 4 declines on the index.

The broader indices continue to outperform benchmarks; the BSE Mid cap and Small cap indices surged by 1.15% and 1.09% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.97%, Auto up by 1.57%, Oil & Gas up by 1.38%, Power up by 1.37% and Realty up by 1.26%. While, Fast Moving Consumer goods down by 0.61% was the lone loser on the index.

The top gainers on the Sensex were Bajaj Auto up by 3.11%, Sun Pharma up by 2.45%, Hindalco up by 2.31%, Tata Motors up by 2.09% and TCS up by 1.81%. While, ITC down by 1.44%, Coal India down by 0.67%, Infosys down by 0.37% and HUL down by 0.28% remained the lone loser on the Sensex.

Meanwhile, Finance Minister Pranab Mukherjee is hopeful that the recent cut in interest rates will spur growth. He has also stated that the government will take additional steps to incentivize growth and control price rise. The Reserve Bank of India (RBI) in its monetary policy review slashed the repo rates by 50 basis points after a span of three years. The move is aimed at making credit cheaper and thereby increasing business activity.

After clocking over 8% economic growth for two years, India's GDP expansion declined to 3-year low of 6.9% in 2011-12. During the three year period, post the 2008 crisis, growth rates dropped due to the global slowdown and in part due to the high rates of credit. However, the RBI was not in a position to cut interest rates to stimulate growth due to the persistently high inflation. In fact RBI hiked policy rates 13 times between March 2010 and October 2011 to control the inflation.

With the recent cut, the Finance Minister is optimistic that the economy will recover its growth rate as India is driven by domestic demand and is only partly affected by the global scene. However, Mukherjee has cautioned that food inflation would continue to be high and the government will have to monitor the situation consistently. He also added that the government will do everything possible to maintain price stability.

The S&P CNX Nifty is currently trading at 5,334.15, higher by 44.45 points or 0.84%. The index has touched a high and low of 5,342.00 and 5,320.70 respectively. There were 42 stocks advancing against 8 declines on the index.

The top gainers of the Nifty were HCL Tech up by 4.66%, Bajaj Auto up by 3.15%, Siemens up by 2.78%, Sun Pharma up by 2.43%, ACC up by 2.27%.

On the flip side, ITC down by 0.79%, Infosys down by 0.71%, RCom down by 0.34%, HUL down by 0.31% and Coal India down by 0.20% remained the losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite gained by 1.33%, Hang Seng surged 1.26%, Jakarta Composite inched up by 0.10%, KLSE Composite added 0.31% to 1,601.11, Nikkei 225 spurted by 2.04%, Straits Times rose 0.57%, Seoul Composite expanded by 1.12% and Taiwan Weighted was up by 0.48%.