Benchmarks magnify their gains; soar to day’s high

Benchmark equity indices, soaring to-day’s high, have almost doubled their gains on relentless bargain-buying of select blue chip stocks, available at attractive valuations after five sessions of fall. Puffing up gains of over half a percent, both Sensex and Nifty were trading above the crucial 22,500 and 6,700 levels respectively, despite little participations from broader indices. On the broader front, while, Midcap index was trading higher with gains of over quarter of a percent, Small cap index was trading lower with loss of close to one tenth of a percent.

On the global front, Asian share markets looked set for mostly negative close on Monday after a survey of Chinese manufacturing disappointed, while the simmering conflict in Ukraine also weighed on the sentiment. Early gains evaporated when HSBC's final reading of its April PMI for manufacturers in China eased back to 48.1 from a preliminary reading of 48.3. The survey showed factory activity in the world's second largest economy contracted for a fourth consecutive month in April, though the index was up a tick on eight-month low seen in March.

Closer home, most of the sectoral indices on BSE were trading in green, with notable gainers being Oil & Gas, Metal and Capital Goods counters, however, stocks from Technology, Information Technology and Power counters witnessing the maximum brunt of profit-booking were the top losers of the index. IT stocks tanked after rupee extended its appreciating streak for fourth straight session on Monday and strengthened near the crucial 60/$ level, tracing the strength of Asian currencies against dollar. On the flip side, Oil & Gas stocks were witnessing maximum demand, with HPCL stocks scaling its 52 weeks high level and BPCL spurting over 2%. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1213:1155; while 124 shares remained unchanged.

The BSE Sensex is currently trading at 22524.26, up by 120.37 points or 0.54% after trading in a range of 22,545.18 and 22,354.45. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.27%, while Small cap index down by 0.09%.

The gaining sectoral indices on the BSE were Oil and Gas up by 2.43%, Metal up by 1.51%, Capital Goods up by 1.12%, PSU up by 1.10% and Bankex up by 0.71%. While, Teck down by 0.74%, IT down by 0.64%, Power down by 0.31%, Realty down by 0.29% and Healthcare down by 0.22% were the losing indices on BSE.   

The top gainers on the Sensex were Hindalco Inds up by 4.65%, ONGC up by 4.03%, RIL up by 2.41%, L&T and Axis Bank were up by 1.73%. On the flip side, Tata power down by 1.50%, Bharti Airtel own by 1.40%, Infosys down by 1.36%, Wipro down by 1.34% and HDFC down by 1.21% were the top losers on the index.

Meanwhile, Foreign Direct Investment (FDI) in India’s services sector has declined by 54 percent to 2.18 billion during April-February FY14 as compared to $4.74 billion in the same period of previous fiscal. Foreign investments declined during FY14 as global investors remained worries over the prevailing political uncertainty in the country like formation of new government as sectors such as banking need necessary reforms.

Indian services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, represent around 60% share in the country’s GDP. Overall foreign inflows into the country declined to $20.76 billion during the first 11 months of FY14 from $20.89 billion recorded in the corresponding period of FY13. Other sectors that received highest inflows during the first eleven months of FY14 include automobiles ($1.28 billion), pharmaceuticals ($1.27 billion) and construction development ($1.05 million). Country wise, maximum FDI during the reported period was received form Mauritius with $4.48 billion followed by Singapore ($3.91 billion), UK ($3.21 billion) and Netherlands ($2.20 billion).

FDI is considered crucial for India, which requires around $1 trillion in the 12th five year plan (2012-2017) to overhaul its infrastructure sector such as ports, airports and highways to boost growth. Meanwhile, in order to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. The government has relaxed FDI norms in around 12 sectors which include telecom, tea, pension and petroleum and natural gas among others. Despite the government various efforts to increase FDI, foreign investment during April-February FY14 has declined, reflecting the need to take more measures to improve the business environment in the country.  

The CNX Nifty is currently trading at 6,722.95, up by 28.15 points or 0.42% after trading in a range of 6,732.05 and 6,680.45. There were 26 stocks advancing against 21 declining stocks on the index, while 3 stocks remained unchanged.

The top gainers of the Nifty were Hindalco up by 5.01%, ONGC up by 4.05%, Jindal Steel up by 3.47%, Reliance up by 2.45% and BPCL up by 2.32%. On the flip side, HCL Tech down by 1.91%, NMDC down by 1.81%, HDFC down by 1.58% Bharti Airtel down by 1.49%, and Tata Power down by 1.43% were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite down by 0.02%,  Hang Seng plunged 1.29%, and Straits Times was down by 0.06%. While, Jakarta Composite up by 0.07% and Taiwan Weighted up by 0.04% were the gainers among Asian pack. Japanese and South Korean markets were shut for trade.