Benchmarks end at fresh all time closing high levels

Monday’s session was another fabulous day of trade for the Indian equity markets, which scaled fresh high levels. Hectic buying activity which took place during last leg of trade drove the markets higher, with frontline gauges ending at their all time closing high levels of 22,750 (Sensex) and 6,800 (Nifty). Meanwhile, rally at Dalal Street also saw participation of broader indices, which outperforming larger peers, ended with profit of over a percent. Though, there was some cautiousness too with CRISIL’s report stating that it may not be easy for India to return to 9% growth during 2014-2019 and instead settle for an average 6.5% growth, provided there is a stable government at the Centre.

But, overall sentiments remained up-beat as foreign institutional investors (FIIs) bought shares worth a net Rs 433.40 crore on April 17, 2014, as per provisional data from the stock exchanges. Investors also reacted positively on Reliance Industries’ results, announced last week. The company has reported rise in net profit of 4.7 per cent to Rs 21,984 crore for the full financial year, the highest by any private sector firm in the country. Benchmarks witnessed sharp up-move in final hour of trade supported by rally in metal stocks after the Supreme Court lifted iron ore mining ban in Goa with a cap of not exceeding 20 mtpa. Also, the Goa government will be considering all leases expired post 2007.

On the global front, most of the Asian equity benchmarks ended in the red as tensions in Ukraine kept investors cautious amid an absence of catalysts as several markets remained closed for the Easter holiday. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Shares of capital goods companies like Larsen and Toubro (L&T), Bharat Heavy Electricals (BHEL), AIA Engineering and Pipavav Defence edged higher as foreign institutional investors (FIIs) continued their inflows in stocks of these companies on expectation that the policies of the new government at the centre would help kick-start the investment / capex cycle. Meanwhile, steel stocks remained on buyers’ radar after a report stated that global steel demand is likely to grow at a faster pace of 3.3 per cent this year, driven by rising demand for the commodity from India, Brazil, Russia, West Asia and North Africa. Additionally, hotel shares too witnessed some traction led by Hotel Leelaventure, which was up nearly 14% after the company said it is in talks with sovereign wealth funds of Abu Dhabi, Qatar and Malaysia to sell its prime properties in Delhi and Chennai for around Rs 1,850 crore to pare debt.

The NSE’s 50-share broadly followed index Nifty surged by over forty points to end above the psychological 6,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred and thirty points to surpass the psychological 22,750 mark. Broader markets too traded neck-to-neck with benchmarks and ended the session with gain of around a percent. The market breadth remained in favour of advances, as there were 1,761 shares on the gaining side against 1,029 shares on the losing side while 107 shares remain unchanged.

Finally, the BSE Sensex surged by 135.99 points or 0.60%, to settle at 22764.83, while the CNX Nifty gained 38.25 points or 0.56% to settle at 6,817.65.

The BSE Sensex touched a high and a low of 22795.58 and 22636.75, respectively. The BSE Mid cap index was up by 0.79%, while the Small cap index gained 1.38%.

The top gainers on the Sensex were SSLT up by 4.78%, L&T up by 4.04%, Mahindra & Mahindra up by 3.54%, BHEL up by 3.07% and Bharti Airtel up by 3.00%. While Wipro down by 6.65%, Hindustan Unilever  down by 1.69%, Sun Pharma down by 0.44%, HDFC down by 0.35% and Tata Power down by 0.30% were the top losers in the index.

On the BSE Sectoral front, Capital Goods up by 2.91%, Metal up by 2.23%, Bankex up by 1.34%, Auto up by 1.33% and PSU up by 1.31%, were the top gainers, while IT down by 0.68%, FMCG down by 0.39%, Realty down by 0.28% and Teck down by 0.18% were the only losers in the space.

Meanwhile, the inter-ministerial committee (IMC) will soon clarify concerns raised by bidders for three coal blocks put up for auction. Coal ministry has already held a meeting, headed by Coal Secretary S K Srivastava, to discuss coal bidders’ issues like whether a consortium can have more than four participating companies or not. The meeting also discussed whether bidders should be allowed to take sample of coal from Central Coalfields (CCL) to perform the yield analysis.

In February, the government had started the auction process of two Jharkhand mines - Jhirki & Jhirki (West) of East Bokaro Coalfield and Tokisud-II of South Karanpura Coalfield and Andal Babuisol of Raniganj Coalfield in West Bengal on block. These three mines have an estimated 500 million tonnes of reserves, for captive use of steel, cement and sponge iron firms. The move came after the Comptroller and Auditor General (CAG) criticized the government for delaying the auction process at a time when the country is facing acute shortage of coal.

India, despite being world's fifth largest in terms of reserves, the third-largest producer of coal has failed to keep pace with increasing domestic demand. Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Indonesia, South Africa and Australia. Presently, Coal India (CIL) is the only producer of domestic coal accounting for around 80 percent of the domestic production. CIL is currently also struggling to meet domestic coal requirement. Acute coal shortages in the country have become primary reason for power deficit as coal-fired plants account for 68% of India's installed electricity capacity. Meanwhile, in order to meet India’s growing coal demand, the government has planned to invite bids from private players to start coal mining in a public-private partnership (PPP) mode in the country, which would also end the monopoly of public sector unit Coal India.

The CNX Nifty touched a high and low of 6,825.45 and 6,786.90 respectively.

The top gainers of the Nifty were Larsen & Toubro up by 4.14%, SSLT up by 3.66%, Mahindra & Mahindra up by 3.63%, PNB up by 3.26% and Bharti Airtel up by 3.18%. On the other hand, Wipro down by 6.97%, Hindustan Unilever down by 2.04%, Cairn India down by 1.75%, DLF down by 1.35% and Power Grid Corporation of India down by 1.12% were the top losers.

The Asian markets concluded Monday’s trade mostly in red while Hong Kong Stock Exchange was closed today on account of Easter Monday holiday. Japan’s weakest export growth in a year spurred a wider-than-forecast trade deficit in March, adding to challenges for Prime Minister Shinzo Abe in steering the economy through the aftermath of an April 1 sales-tax rise. Japan’s trade balance fell to a seasonally adjusted -1.71T, from -1.18T in the preceding month whose figure was revised down from -1.13T. The trade data also helped spur a weaker yen to boost shares. Indonesia’s central bank expects inflation to ease in April, for a rise of 7.2% on the year compared to 7.32% the previous month. Deputy governor Perry Warjiyo stated that the bank estimated inflation on a monthly basis would be below 0.1%. The deputy governor also added that the country’s current account deficit is also expected to stand at below 2% of gross domestic product in the first quarter of the year.