Markets continue to trade near intra-day high level in afternoon session

Indian equity benchmarks extended early gains to continue firm trade in afternoon session, hovering near the intra-day high levels amid heavy capital inflows and encouraging corporate earnings. Firm Asian cues coupled with the appreciation in rupee value too has enthused the markets to extend their gains. Sentiments got a boost as the World Bank’s report highlighted that India has replaced Japan to become the world's third biggest economy in terms of purchasing power parity (PPP). The World Bank's International Comparison Program (ICP) 2014 reported India's share in World GDP at 6.4% to $5.75 trillion in 2011 compared with China's at 14.9% and the US at 17.1%. Most of the sectoral indices on BSE were trading in green, while a mild weakness in IT sector was visible, though buying was broad based in the markets and apart from the blue chips, the broader markets too equally participated in the rally.  Oil and gas index was the top gainer on BSE up by over 1.80% followed by auto and banking indices both up by over 0.80%. Most of the public sector banks’ shares were trading up by over around 4% after Indian Overseas Bank (IOB) reported strong set of numbers for the quarter ended March 2014.

TVS Motors Company, extending its previous day’s 6% rally, has surged by around another 5%, after reporting an adjusted standalone net profit of Rs 82 crore for Q4FY14. Bharti Airtel was trading higher by 2% at Rs 341 after reporting 89% year-on-year jump in consolidated net profit at Rs 962 crore for Q4FY14, backed by strong growth in voice and data revenues. However, the shares of Ranbaxy Laboratories and Sun Pharmaceutical Industries are trading lower by up to 2% after Andhra Pradesh High Court asked stock exchanges as well as Securities and Exchange Board of India (SEBI) to maintain an interim status-quo on the merger.

On global front, Asian equity indices were trading mixed with Straits Times was up by 0.79% and Shanghai Composite up by 0.17%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,750 and 22,600 levels respectively. The market breadth on BSE was positive, out of 2,325 stocks traded, 1,364 stocks advanced, while 848 stocks declined on the BSE. The BSE Sensex is currently trading at 22,642.18 up by 175.99 points or 0.78% after trading in a range of 22,680.46 and 22,499.10. 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 0.98%, while Small cap index gained 0.67%.

The gaining sectoral indices on the BSE were Oil and Gas up by 1.80%, Bankex up by 1.29%, Auto up by 0.84%, Power up by 0.79% and FMCG up by 0.52%. While, IT down by 0.11% was the only losing index on BSE.   

The top gainers on the Sensex were Gail India up by 2.85%, M&M up by 2.21%, Dr Reddy’s Lab up by 2.18%, ONGC up by 1.91% and RIL up by 1.90%. On the flip side, Sun Pharma down by 1.25%, Bajaj Auto down by 1.12%, Tata Power down by 0.49%, Tata Steel down by 0.38% and SSLT down by 0.37%.

Meanwhile, the government has set coal production and offtake targets at 507 million tonnes and 520 million tonnes for Coal India Ltd (CIL) for the financial year 15. Public sector enterprise Coal India Ltd is the only producer of domestic coal accounting for around 80 percent of the domestic production. However, it looks difficult to achieve the set targets, as the company requires extraordinary efforts to enhance the coal production by 9.6 percent and off take by 10.3 percent to meet the coal production and off take target for current fiscal.

At present, CIL is struggling to meet domestic coal requirements and its production fell 4.21 percent short of its production target at 462.53 million tonnes in FY14 amid concerns like shutdown of mining activities in Talcher Coalfields in Odisha. The CIL’s coal production and off take grew only by 2.3 percent and 1.4 percent respectively in the previous year.

India, despite being world's fifth largest in terms of reserves and 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. 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 is currently trading at 6,769.30 up by 54.05 points or 0.80% after trading in a range of 6,780.15 and 6,723.65. There were only 34 stocks advancing against 16 declining on the index.

The top gainers of the Nifty were Gail up by 2.88%, PNB up by 2.73%, BPCL up by 2.46%, Dr Reddy’s Lab up by 2.26% and Asian Paints up by 2.25%. On the flip side, Sun Pahrma down by 1.21%, Bajaj Auto down by 0.88%, DLF down by 0.81%, SSLT down by 0.71% and Tats Steel down by 0.49% were the major losers on the index.

Asian equity indices were trading mixed; Straits Times was up by 0.79% to 3,263.32, Shanghai Composite up by 0.17% to 2,023.77, Jakarta Composite up by 0.29% to 4,833.81. While, Hang Seng down by 1.33% to 22,155.18, Taiwan Weighted down by 0.91% to 8,791.44 and Nikkei 225 down by 0.01% to 14,287.43.