Benchmarks add gains; Sensex above 22500 mark

Benchmarks added gains to continue firm trade near the highest point of the day in the late afternoon session on account of buying in frontline blue chip counters, taking cues from global counterparts. The markets started the trade on optimistic note after the International Monetary Fund (IMF) projected India's economy to grow by 5.4% in 2014-15 and 6.4% in 2015-16 on the back of strengthening global growth, improving export competitiveness and implementation of recently approved investment projects. Traders were seen piling position in HealthCare, Metal and Realty stocks while selling was witnessed in IT and TECK sector stocks. In scrip specific development, Bharat Forge was trading in green to ITS highest level since April 2006 after foreign brokerage firm Goldman Sachs upgraded the auto components maker to neutral from sell as part of its preference for cyclical shares over defensive ones. OnMobile Global was trading firm after the company executed a non-binding memorandum of understanding for potential divestment of its group company, Voxmobili SA.

On the global front, most of the Asian markets were trading in green, while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,700 and 22,500 levels respectively. The market breadth on BSE was positive in the ratio of 1696:901 while 126 scrips remained unchanged.

The BSE Sensex is currently trading at 22502.81, up by 159.36 points or 0.71% after trading in a range of 22,503.26 and 22379.95.

The broader indices continued to outperform; the BSE Mid cap index was up by 1.43%, while Small cap index up by 1.87%.

The gaining sectoral indices on the BSE were HealthCare up by 2.26%, Metal up by 1.96%, Realty up by 1.93%, Bankex up 1.91% and Auto up by 1.39% while, IT down by 1.43% and TECK down by 1.13% were the only losing indices on BSE.   

The top gainers on the Sensex were Sun Pharma up by 6.77%, Hindalco Industries up by 4.01%, Tata Motors up by 3.89%, SBI up by 2.64% and Axis Bank up 2.58%. On the flip side, TCS down by 1.41%, Infosys down by 1.34%, ONGC down by 1.23%, Wipro down by 0.84% and Hero Motocorp down by 0.71%.

Meanwhile, India’s steel consumption grew at a four-year low rate of 0.6 percent in FY'14 to 73.93 million tonnes (MT) mainly impacted by a prevailing economic slowdown and high interest rates. As steel demand derived from construction and automobile sectors, the performance of the steel industry is therefore largely dependent on overall economic growth of the country. Steel consumption in the country grows by 1.2 to 1.3 percent of the GDP growth.

Construction sector accounts for around 60 percent of the country's total steel demand while the automobile industry consumes 15 percent. Both sectors were plagued by a slowdown in the economy. Indian economy’s growth slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarter of FY'14. Furthermore, financial year 2013 was also not good for the steel industry as well with steel consumption growing by a mere 3.3 percent on account of subdued demand.

However, domestic steel consumption grew by 5.5 percent in FY'12 and 9.9 percent in FY'11. Domestic steel consumption is likely to remain under pressure in coming future on account of ongoing economic downturn.

The government has been taking various measures to enhance the domestic steel demand. In previous month, it has relaxed the norms for import of steel and its products amid subdued domestic production. Over the past few years, domestic steel industry has been struggling with increased input cost, leading to decline in steel production. Further, low iron ore production, a main raw material for steel production, mainly in Goa and Karnataka region has not only hampered the capacity utilization of various steel players, but also led to significant rise in the cost of iron ore in the domestic market due to limited supplies.

The CNX Nifty is currently trading at 6,736.30, up by 41.25 points or 0.62% after trading in a range of 6,740.00 and 6,705.10. There were 36 stocks advancing against 14 declining ones on the index.

The top gainers of the Nifty were Sun Pharma up by 6.61%, Bank of Baroda up by 5.82%, Hindalco up by 3.97%, PNB up by 3.91% and Tata Motors up by 3.74%. On the flip side, HCL Tech down by 2.24%, Tech Mahindra down by 2.23%, TCS down by 1.55% Infosys down by 1.47% and ONGC down by 1.26% were the major losers on the index.

Asian equity indices were trading in green; Hang Seng up by 1.09%, Taiwan Weighted up by 0.48%, Straits Times up by 0.27%, Jakarta Composite up by 0.01% and Shanghai Composite up by 0.33%. While, Nikkei 225 down by 2.10% was the only loser amongst Asian pack.

The European markets were trading in green; France’s CAC 40 was up 0.58%, Germany’s DAX added 0.47% and UK’s FTSE 100 gained 0.79%.