Benchmarks steadily build on to early gains; Sensex trades past 22800 level

Steadily building on gains, benchmark equity indices have eked out modest profit of close to two tenths of a percent and trading past the crucial 22,800 (Sensex) and 6,800 (Nifty) levels respectively on sustained buying activities by funds and retail investors in backdrop of positive global cues. Gains of index heavyweight, Reliance Industries (RIL), which spelled optimistic across Oil & Gas pivotal have got the momentum going at Dalal Street. Broader indices too are contributing to the up-move of the bourses. Both Midcap and Small-cap outperforming larger peers are trading higher over half a percent.

On the global front, Asian shares were supported on Tuesday after Wall Street stocks extended gains into a fifth day, though investors continued to see tensions in Ukraine as a threat to risk appetite.Asian shares took their cue from the S&P 500 index, which rose for a fifth straight day on Monday to mark its longest winning streak since October

Closer home, while most of the sectoral indices were supporting the upside of the bourses, stocks from Metal, Auto and Fast Moving Consumer Goods (FMCG) counters were providing a ceiling to benchmarks’ gains. Metal stock lost its sheen on profit-booking. Nearly one-and-a-half years after it banned mining in Goa, the Supreme Court on Monday allowed mining in the state, but with an annual cap of 20 million tonnes of iron ore extraction. Prominent gainers for the session, besides Oil & Gas were stocks from Realty and Capital Goods counters. The market breadth on BSE was positive, out of 2106 stocks traded, 1240 stocks advanced, while 785 stocks declined on the BSE.

The BSE Sensex is currently trading at 22809.35 up by 44.52 points or 0.20% after trading in a range of 22853.03 and 22754.51. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index up by 0.72%.

The gaining sectoral indices on the BSE were Oil & Gas up by 2.11%, Realty up by 0.98%, Capital Goods up by 0.93%, PSU up by 0.56% and Consumer Durables up by 0.39%. While, Metal down by 0.79%, Auto down by 0.37%, FMCG down by 0.31%, Power down by 0.13% and Bankex down by 0.10% were the losing indices on BSE.   

The top gainers on the Sensex were Gail India up by 2.60%, RIL up by 2.41%, ONGC up by 1.76%, L&T up by 1.18% and HDFC Bank up by 0.95%. On the flip side, SSLT down by 2.43%, Hindalco down by 1.26%, Tata Power down by 1.08%, Tata Motors down by 1.02% and SBI down by 0.95%.

Meanwhile, way lower than 9% annual growth rate achieved in 2010-11, Rating agency Crisil has forecasted a stable government post-elections to help economy grow at an average of 6.5 percent for the next five years. However, this growth rate is strictly based on the premise of decisive mandate in the ongoing general elections 2014-15.

It further elucidated that it is not the election results which impact the economy, but policies formulated by the new government that will boost growth. The analytical firm Crisil opined that a decisive mandate would create an environment for speedy resolution of policy bottle-necks, hasten reforms and jump start investment efficiency, which has fallen drastically over the last two years.

Credit rating and research firm is of the view that an improvement in investment efficiency, which is expected to kick in with faster project clearances, implementation of stalled infrastructure projects and resumption of mining activities, will shore up investment growth when both domestic and global demand begin to rebound and improve capacity utilization, thus laying out the groundwork for the country's doorway into a phase of healthier growth.

Crisil, however, pointed out that evolving investment dynamics, illustrate that neither a surge in investments nor improvement in efficiency witnessed during fiscals 2004-2011, which led to near 9 percent GDP growth, would recur in the next five years.

Nonetheless, the rating agency underscored that achieving an average growth of 6.5 percent over the next five fiscals was inadequate for a country with over 269 million BPL populations as this would not do enough to accelerate growth, and thus job creation, setting off a vicious cycle of lower household income, consumption and investment spending that would be so much harder to shake off. It further warned that in absence of proper solution for pressing policy and implementation issues, average growth rate of 6.5% would be unsustainable.

The CNX Nifty is currently trading at 6,825.80 up by 8.15 points or 0.12% after trading in a range of 6,838.00 and 6,813.00. There were 22 stocks advancing against 28 declining on the index.

The top gainers of the Nifty were BPCL up by 2.74%, Gail up by 2.64%, Reliance Industries up by 2.46%, ONGC up by 1.87% and L&T up by 1.26%. On the flip side, SSLT down by 2.36%, Ambuja Cements down by 2.08%, IndusInd Bank down by 1.64%, Hindalco down by 1.43% and PNB down by 1.40% were the major losers on the index.

Most of the Asian equity indices were trading in green; KLSE Composite gained 0.07%, Nikkei 225 surged 0.08%, Straits Times increased by 0.46%, Seoul Composite rose 0.22% and Taiwan Weighted was up by 0.34%. On the flip side, Shanghai Composite slipped 0.05%, Hang Seng declined by 0.27% and Jakarta Composite was down by 0.56%.