Benchmarks extend gains; trade near intra-day high level

Indian equity benchmarks extended early gains to continue firm trade in afternoon session, hovering near intra-day high level amid a rally in capital goods, healthcare and consumer durables stocks. There was no instance of profit booking since morning with major indices fervently gained from strength to strength as investors continued hunt for fundamentally strong stocks. Buying was witnessed in frontline blue chip stocks such as Sun Pharma, L&T and Axis bank. Further, sustained buying by funds and retail investors on the back of encouraging fourth quarter earnings has provided strength to domestic markets. Most of the sectoral indices on BSE were trading in green and capital goods index was top gainer up by over 1.40% followed by healthcare and consumer durables both up by over 0.90%. Buying was broad based with both mid and small cap indices were trading higher. However, investors were seen selling stock of power and realty sectors.

LIC Housing Finance, extending its previous day’s 2% gains was trading higher by 2% at Rs 284, after reporting a healthy growth of 17% yoy in net profit at Rs 370 crore for the quarter ended March 31, 2014 (Q4). Further, VST Industries was trading 6% higher at Rs 1,890 on reporting 49% yoy growth in net profit at Rs 51.89 crore for Q4 FY14. Rallis India has also surged 6% to nearly Rs 176 after the agrochemicals company reported a 71% yoy jump in net profit at Rs 19.3 crore for Q4 FY14.

On global front, most of the Asian equity indices were trading in red with Jakarta Composite down by 0.09% and Hang Seng down by 0.84%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,800 and 22,800 levels respectively. The market breadth on BSE was positive, out of 2,407 stocks traded, 1,362 stocks advanced, while 919 stocks declined on the BSE.

The BSE Sensex is currently trading at 22,862.93 up by 104.56 points or 0.46% after trading in a range of 22,878.98 and 22,780.13. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index up by 0.59%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.40%, Healthcare up by 1.19%, Consumer Durable up by 0.93%, Bankex up by 0.67% and Teck up by 0.51%. While, Realty down by 0.13%, Power down by 0.11%, FMCG down by 0.06% and Metal down by 0.02% were the losing indices on BSE.   

The top gainers on the Sensex were Sun Pharma up by 2.33%, Axis Bank up by 2.08%, L&T up by 1.97%, BHEL up by 1.89% and ONGC up by 1.59%. On the flip side, NTPC down by 1.05%, HDFC down by 0.92%, Hindalco Inds down by 0.69%, Coal India down by 0.40% and ITC down by 0.20%.

Meanwhile, India’s fuel demand grew by slowest pace in almost 12 years at 0.7% to 158.197 million tonnes (MT) in FY14 from a year earlier. The world's fourth-largest oil consumer witnessed meager petroleum product demand since 2001-02 when demand had expanded by 0.4% to 100.432 MT.

The demand for diesel, India's most consumed fuel accounting for around 45 percent of the total petroleum product demand, registered the first decline since 2001-02 and fell by 1% at 68.37 MT in FY14 as the move to deregulate diesel rates through small monthly increases dried out the domestic demand. Small adjustments of 50 paise every month has increased the Diesel rates by a cumulative Rs 8.33 per since January 2013, leading to drop in demand. Furthermore, better power production had also resulted in moderation in diesel demand. However, diesel demand had risen by 6.7 percent in 2012-13 to 69.08 MT.

On the other hand, petrol consumption during FY14 rose by 8.8% to 17.13 MT while LPG demand was up 4.7 percent to 16.337 MT. Presently, petrol prices are at par with its cost of production, while the current selling price of diesel is still Rs 5.49 litre lower than its cost. In India, fuel retailers are currently losing Rs 5.49 a litre on diesel and Rs 34.43 per litre on kerosene sold through the public distribution system and Rs 506.06 per 14.2-kg cylinder of domestic cooking gas (LPG).

India imports about 75 percent of petroleum products requirement and pay an import bill of around $160 billion for petroleum and natural gas alone. Presently, India imports around 80% of its total oil needs and 25% of natural gas domestic demand. Meanwhile, oil ministry has formulated a roadmap for cutting India's dependence on imports to meet its energy needs. As per the Ministry, domestic crude oil demand to be cut to 50 percent by 2020 and by 25 percent in 2025 through intensive exploration and exploitation of untapped reserves. Presently, only 0.93 million sq km area in India is held under exploration and production in 19 basins as compared to total estimated sedimentary area of 3.14 million square kilometers, comprising 26 sedimentary basins.

The CNX Nifty is currently trading at 6,841.75 up by 26.40 points or 0.39% after trading in a range of 6,861.60 and 6,820.75. There were only 35 stocks advancing against 15 declining on the index.

The top gainers of the Nifty were Sun Pharma up by 2.39%, Axis Bank up by 2.09%, Kotak Bank up by 1.92%, L&T up by 1.84% and ONGC up by 1.62%. On the flip side, DLF down by 1.53%, HDFC down by 0.95%, HCL Tech down by 0.90%, NTPC down by 0.89% and Ultratech Cement down by 0.87% were the major losers on the index.

Asian equity indices were trading in red; Jakarta Composite down by 0.09% to 4,893.99, Hang Seng down by 0.84% to 22,539.70, Shanghai Composite down by 0.27% to 2,067.13, Straits Times was down by 0.74% to 3,253.79 and Taiwan Weighted down by 0.20% to 8,956.92. While, Nikkei 225 up by 0.94% to 14,524.36.