Benchmarks continue to trade in green in afternoon session

Indian bourses after showing outperformance in early deals consolidated in noon trades holding on to their morning gains despite some profit taking which corrected the benchmarks to some extent. The major indices managed to remain in green supported by gains in healthcare, metal and consumer durables stocks. Sentiments got a boost as International Monetary Fund’s (IMF) report stated that India's growth is expected to recover from 4.4 percent in 2013 to 5.4 percent in 2014. Further, firm global cues coupled with the appreciation in rupee value against the dollar also added to the optimistic sentiments. Healthcare was the top gaining index up by around 2.24% on BSE supported by firm gain in Sun pharma and Ranbaxy stocks. Shares of Sun Pharmaceuticals Industries and Ranbaxy Laboratories were trading higher by up over 5% as brokerages affirmed buying rating on these stocks. However, there were considerable weakness in the IT and Teck stocks, restricting markets to extend gains.

Tata Motors DVR has surged 6.4% to its record high on the NSE at around Rs 232 on the back of heavy volumes. Suzlon Energy, extending its 24% rally in past two trading sessions was trading higher by 6% to around Rs 14.75, after the company announced that Senvion, a wholly owned German subsidiary had tied up euro 850 million in loans.

On global front, Asian equity indices were trading in green with Straits Times was up by 0.10% and Hang Seng up by 0.67%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,700 and 22,400 levels respectively. The market breadth on BSE was positive, out of 2,205 stocks traded, 1392 stocks advanced, while 710 stocks declined on the BSE.

The BSE Sensex is currently trading at 22,415.26 up by 71.81 points or 0.32% after trading in a range of 22,479.07 and 22,389.21. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.95%, while Small cap index up by 1.04%.

The gaining sectoral indices on the BSE were Healthcare up by 2.24%, Metal up by 1.94%, Realty up by 1.53%, Consumer Durables up by 1.40%, Bankex up by 0.84% and Auto up by 0.74%. While, IT down by 1.30%, Teck down by down by 1.09% and FMCG down by 0.14% were the losing indices on BSE.   

The top gainers on the Sensex were Sun Pharma up by 6.32%, Hindalco Inds up by 4.48%, Tata Motors up by 2.47%, Tata Steel up by 2.22% and SBI up by 1.57%. On the flip side, TCS down by 1.68%, ONGC down by 1.64%, Infosys down by 1.34%, Hero Motocorp down by 1.16% and Bajaj Auto down by 0.92%.

Meanwhile, the inflation indexed National Savings Securities have failed to attract retail investors as total mobilisation through these 10-year instruments, which was meant to be a hedge against inflation, has recorded at around Rs 100 crore. The factors like lack of awareness, absence of tax benefits, and a fall in retail inflation can be attributed to the poor response.

In 2013, the Government had issued two inflation-indexed products such as Inflation Indexed Bonds based on the Wholesale Price Index (WPI) and Inflation Indexed National Saving Securities-Cumulative for retail investors based on Consumer Price Index (CPI) inflation. The Government was expecting to mop up around Rs 20,000 crore from these two instruments. Meanwhile, the total mobilisation through both the instruments was around Rs 6,000 crore out of which approximately Rs 5,900 crore was garnered from inflation indexed bonds based on WPI and Rs 100 crore from the securities based on CPI inflation. Money collected through such instruments will be part of the Government’s borrowings plan for Rs 3.68-lakh crore between April and October’ 2014.

Recently, the Reserve Bank of India (RBI) has doubled the maximum limit for investment in inflation-indexed bonds to Rs 10 lakh per annum for individuals. Further, the investment limit for institutions like Hindu undivided family (HUF), Charitable Trusts, Education Endowments and similar institutions that are not profit-seeking in nature has been increased from Rs 5 lakh to Rs 25 lakh per annum.

The absence of tax benefits in the scheme has detracted individuals as there is no benefit available either on the principal investment or interest paid. Further, the declining retail inflation could also be reason for poor retail investors’ response. The CPI inflation in February came down to an over-two-year low of 8.1 percent from 8.79 percent in January.

The CNX Nifty is currently trading at 6,714 up by 18.95 points or 0.28% after trading in a range of 6,733.60 and 6,710.65. There were only 36 stocks advancing against 14 declining on the index.

The top gainers of the Nifty were Sun Pharma up by 6.21%, Hindalco up by 4.66%, Bank of Baroda up by 3.27%, NMDC up by 2.99% and Tata Motors up by 2.40%. On the flip side, Tech Mahindra down by 2.43%, ONGC down by 1.81%, HCL Tech down by 1.71%, TCS down by 1.55% and Infosys down by 1.35% were the major losers on the index.

Asian equity indices were trading in green; Hang Seng up by 0.67% to 22,748.80, Taiwan Weighted up by 0.48% to 8,930.57, and Straits Times was up by 0.10% to 3,207.40, Jakarta Composite up by 0.01% to 4,921.40 and Shanghai Composite up by 0.05% to 2,099.29. While, Nikkei 225 down by 2.01% to 14,313.77.