Benchmarks trade in fine fettle in early deals

Indian equity benchmarks have kick started the F&O expiry week on positive note 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 before the weekend. 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. However, gains remained capped up-to certain extent after global ratings agency CRISIL said 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.

On the global front, the US markets ended higher on Thursday amid encouraging jobs data and healthy earnings from large corporations including General Electric. The claims for unemployment benefits rose to 2,000 to a seasonally adjusted 304,000 in the week to April 12. Asian markets were trading mixed with Japanese market trading higher with the support of weakness in yen after country’s trade deficit widened more than forecast last month.

Back home, selling witnessed in the gems and jewellery stocks as Indian exports of gems and jewellery, which contributes about 15 percent of the country’s overseas shipments, fell by about 9 percent to $39.5 billion in 2013-14. On the sectoral front, capital goods, metal and power witnessed the maximum gain in trade, while software remained the lone loser on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1206 shares on the gaining side against 486 shares on the losing side while 78 shares remain unchanged.

The BSE Sensex opened at 22644.75; about 15 points higher compared to its previous closing of 22628.84, and touched a high and a low of 22726.86 and 22636.75 respectively. The index is currently trading at 22702.34, up by 73.50 points or 0.32%. There were 27 stocks advancing against 3 declines on the index.

The overall market breadth has made a strong start with 68.14% stocks advancing against 27.46% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.81% and Small cap gained 1.23%. 

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.21%, Metal up by 1%, Power up by 0.74%, PSU up by 0.73% and Bankex up by 0.68%, while IT down by 0.16% was the sole loser on the sectoral index.

The top gainers on the Sensex were L&T up by 1.51%, BHEL up by 1.44%, SSLT up by 1.30%, Hindalco up by 1.27% and SBI up by 1.20%. On the flip side, Wipro was down by 4.88%, HDFC was down by 0.83%, Hindustan Unilever was down by 0.69%, Sun Pharma was down by 0.10% and Tata Motors was down by 0.03% were the top losers on the Sensex.

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 opened at 6,789.25; about 9 point higher as compared to its previous closing of 6,779.40, and has touched a high and a low of 6,806.00 and 6,787.90 respectively. The index is currently trading at 6,797.75, up by 18.35 points or 0.27%. There were 37 stocks advancing against 13 declines on the index.

The top gainers of the Nifty were PNB up by 1.98%, L&T up by 1.62%, NMDC up by 1.61%, BHEL up by 1.43% and SSLT up by 1.38%. On the flip side, Wipro down by 4.98%, Asian Paint down by 1.61%, Cairn down by 1.33%, ACC down by 0.78% and HDFC down by 0.77% were the top losers on the index.

The Asian equity indices were trading mixed; Jakarta Composite increased by 7.66 points or 0.16% to 4,904.71, KLSE Composite advanced 9.54 points or 0.51% to 1,862.23, Nikkei 225 soared 55.64 points or 0.38% to 14,571.91 and Straits Times was up by 3.92 points or 0.12% to 3,257.12.

On the flip side, Shanghai Composite slipped by 5.65 points or 0.27% to 2,092.10, Seoul Composite dropped 10.09 points or 0.50% to 1,994.19 and Taiwan Weighted was down by 14.76 points or 0.16% to 8,951.90.

Hong Kong market remained shut for the trade today for Easter holidays.