Markets soar to day’s high on bargain buying activities

Going from strength to strength, Indian equity markets have escalated to day’s high on sustained cheery picking activities by funds and retail investors for select blue chip stocks, available after previous two trading sessions’ bashing. Additionally, good earnings from IT giant, TCS and HCL Technologies also offered steroids to bulls. Besides, sanguine global peers also added to the underlying positive momentum of bourses. At day’s high, both Sensex and Nifty were trading above the crucial 22,450 and 6,700 levels respectively, with gains of over 3 /4 of a percent. Meanwhile, broader indices too following suite were up with similar amount of gains.

On the global front, Asian stocks were trading mostly positive on Thursday, taking cues from overnight gains at Wall Street. Supporting regional sentiment was Federal Reserve Chairwoman Janet Yellen, who gave a speech that emphasized a focus on low inflation, and reassured markets over continued low interest rates. Her comments came after a March policy meeting that left some investors worried that the Fed could be moving toward higher interest rates sooner than expected.

Closer home, since buying was broad based in nature, none of the sectoral indices were trading in red, however stocks from Realty, Auto and Information Technology counters were the top gainers of the session. IT counter cheered up after TCS and HCL Tech stocks rose post reporting earnings for quarter ended March 31, 2014. While, Tata Consultancy Services, India's largest IT services exporter, reported a better than expected 51.5 percent increase in the last three months, HCL Technologies posted better-than-expected earnings for quarter ended March 2014 on the back of strong margins. Its net profit grew to Rs 1,624 crore, up 8.5 per cent, from Rs 1,496 crore in previous quarter.The market breadth on BSE was positive, out of 2058 stocks traded, 1361 stocks advanced, while 584 stocks declined on the BSE.

The BSE Sensex is currently trading at 22453.58 up by 176.35 points or 0.79% after trading in a range of 22468.80 and 22312.19. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.81%, while Small cap index up by 1.15%.

The gaining sectoral indices on the BSE were Realty up by 1.79%, Auto up by 1.53%, IT up by 1.26%, Teck up by 1.04%, Consumer Durables up by 1.02% and Capital Goods up by 0.87%. While, there were no losing indices on BSE.   

The top gainers on the Sensex were Tata Motors up by 2.50%, ICICI Bank up by 2.01%, Wipro up by 1.94%, Hindalco up by 1.44% and Hero MotoCorp up by 1.43%. On the flip side, HDFC Bank down by 1.99% and ONGC down by 0.50% were the only losers on the Sensex.

Meanwhile, with the government having initiated the process of auctioning coal blocks, bidders have raised concerns on several serious and trivial issues, including discrepancies in reserves in the biggest of the three mines put up for sale, number of participating companies that consortium can have and the color of ink on which copies need to initialed. These issues are likely to be taken up in an Inter-Ministerial Committee (IMC)’s meeting on Thursday. i.e. April 17, 2014.

The ministers in this meeting would also deliberate on the issue whether bidders would be permitted to take sample of coal from Central Coalfields (CCL) to perform the yield analysis of Jhirki coal block. The issues that came to light at the pre-bidding meeting on April 4, included discrepancy in the coal reserves and area of the block given in the GR and the FRP of Jhirki & Jhirki (West) coal block. According to government estimates, Jhirki & Jhirki (West) of East Bokaro Coalfield has geological reserves of 267.91 MT coking coal for steel (blast furnace) and Tokisud-II of South Karanpura Coalfield with 127.692 MT of reserves for cement plant.

Additionally, another issue that would be on agenda of this meeting is the clarity on whether the permitted EUP (end use plans) would remain unchanged throughout the life of the mine or not and whether the bidders would have a free hand to change the proportion of coal consumption for different EUPs of the bidder mentioned at the time of the bidding.

The Centre in late February had began the auction process putting two mines in Jharkhand and one in West Bengal on block, having an estimated 500 million tonnes of reserves, for captive use of steel, cement and sponge iron firms. This was Centre’s first auction after its earlier practice was criticized by the Comptroller and Auditor (CAG) General for having caused notional loss of Rs 1.8 lakh crore to the exchequer.

The CNX Nifty is currently trading at 6,725.80 up by 50.50 points or 0.76% after trading in a range of 6,684.40 and 6,725.80. There were 46 stocks advancing against 4 declining on the index.

The top gainers of the Nifty were Tata Motors up by 2.52%, ICICI Bank up by 2.06%, Wipro up by 1.96%, Ambuja Cements up by 1.68% and M&M up by 1.58%. On the flip side, HDFC Bank down by 2.16%, Power Grid down by 0.79%, ONGC down by 0.60% and United Spirits down by 0.46% were the only losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng up by 0.22%, Nikkei 225 up by 0.24%, Taiwan Weighted up by 0.16%, Straits Times up by 0.03% and Jakarta Composite was up by 0.29%. On the flip side, Shanghai Composite down by 0.10%, and KOSPI Composite dropped by 0.30%.