Benchmarks add gains; trade hovers near intra-day high

Indian equity benchmarks added gains to continue firm trade hovering near the highest point of the day in the late afternoon session on account of buying in frontline blue chip counters. The markets took note of Standard and Poor's report which stated that it may upgrade India’s outlook if the government that is elected next month addresses some of the country’s fiscal and economic challenges through steps such as passing a goods and services tax. Traders were seen piling positions in Realty, Auto and Bankex stocks. In scrip specific development, HCL Technologies was trading in green after the IT major reported better-than-expected earnings for quarter ended March 2014 on the back of strong margins. Hathway Cable and Datacom was trading firm after foreign brokerage firm started coverage on the stock with a buy rating. JSW Steel was trading in green after the company hiked its stake in Vallabh Tinplate to 50%.

On the global front, the Asian markets were trading on a mixed note, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,750 and 22,500 levels respectively. The market breadth on BSE was positive in the ratio of 1527:1062 while 132 scrips remained unchanged.

The BSE Sensex is currently trading at 22591.66, up by 314.43 points or 1.41% after trading in a range of 22593.06 and 22312.19.

The broader indices were trading in green; the BSE Mid cap index was up by 1.26%, while Small cap index was up by 1.30%.

The gaining sectoral indices on the BSE were Realty up by 2.22%, Auto up by 1.98%, Bankex up by 1.61%, Capital Goods up by 1.40% and Oil & Gas up by 1.38% while there were no losing indices on BSE.   

The top gainers on the Sensex were Tata Motors up by 3.57%, ICICI Bank up by 3.25%, Tata Power up by 2.94%, Hindalco Industries up by 2.70% and Wipro up by 2.69%. On the flip side, HDFC Bank down by 1.33% and NTPC down by 0.61% were the only losers on the index.

Meanwhile, after a miserable performance in the previous fiscal, the National Highways Authority of India (NHAI) is ready with new work plan for current financial year and planned to award around 5,000-km highway contracts in FY15.

As per the NHAI work plan, about 2,300 km of highway projects with a total project cost of over Rs 15,000 crore will be awarded through cash contracts, or Engineering, Procurement, Construction (EPC) mode and 3,000 km projects with cost of over Rs 35,000 crore to be bid via the public-private partnership (PPP) mode. However, the NHAI’s work plan reflects the continual gloom in the sector. NHAI is likely to award projects through EPC mode if it is able to acquire 90% of the land. On the other hand, final award on PPP mode would depend on the market response. So far, bidders’ response to PPP mode remained poor and NHAI would convert PPP to the EPC mode if no bids are received. If PPP projects have to be converted to the EPC mode, then NHAI's financial capacity would have to be examined. Over the past few month, developers’ interest towards PPP mode projects has declined as raising equity for highways PPPs has become difficult.

Over the past few years, road sector is struggling with slowdown and the NHAI had blamed the issues like financial stress, land acquisition delays and environmental clearances and enhanced construction risk for the current downturn in the sector. During FY14, NHAI has managed to award around 500 km of road projects, while in FY13 only 1,116 km of projects were awarded against a target of 9,500 km.

The CNX Nifty is currently trading at 6,768.15, up by 92.85 points or 1.39% after trading in a range of 6,771.25 and 6,684.40. There were 46 stocks advancing against 4 declining ones on the index.

The top gainers of the Nifty were Ambuja Cements up by 3.97%, Tata Motors up by 3.84%, ICICI Bank up by 3.56%, Jindal Steel up by 3.19% and Tata Power up by 3.12%. On the flip side, HDFC Bank down by 1.38%, Power Grid down by 0.79%, McDowell down by 0.55% and NTPC down by 0.45% were the only losers on the index.

Asian equity indices were trading on mixed note; Taiwan Weighted up by 0.23%, Jakarta Composite inched up by 0.37% and Hang Seng added 0.28% while, Shanghai Composite slid by 0.30%, Nikkei 225 was down by 0.15 points and Straits Times was down by 0.06%.

The European markets were trading in green; France’s CAC 40 was down 0.05%, Germany’s DAX lost 0.19% and UK’s FTSE 100 dropped 0.32%.