Benchmarks continue to trade in green in late morning session

Local equity markets, after paring some gains in early deals, have gained some momentum on persistent bargain buying activities by funds and retail investors at lower levels post benchmark equity indices fell to 6 weeks low in previous trading session. However, some amount of prevailing caution ahead of the general elections outcome due on May 16, may limit the further uptrend of local equities. Off day’s low, while Sensex and Nifty were trading above the crucial 22,400 and 6,650 levels respectively, with gains of over 0.25%. Meanwhile, broader indices too were trading with decent amount of gains. Some support also crept into Dalal Street with the Europe India Chamber of Commerce (EICC) latest report stating that there was huge potential to boost the investment flow of European companies, who invested $198 billion in India between 2004 and 2013.

On the BSE sectoral front, maximum positions were built in banking counter, followed by Metal and Auto stocks, while selling was witnessed in Capital Goods, Realty and Consumer Durables counters. In scrip specific development, Financial Technologies and Multi Commodity Exchange of India are down 5 and 4 percent respectively as promoter Jignesh Shah was arrested. Procter and Gamble Hygiene and Health Care was trading at Rs.3,624, up 5.4% from its previous close, after it reported 55% jump in its net profit to Rs.80.76 crore for the quarter ended March 31, 2014.

On the global front, Asian stocks rebounded as Chinese exports and imports unexpectedly climbed and US Federal Reserve Chairman Janet Yellen said that the Fed will continue to support the US economy. Moreover, US stocks has ended higher on easing tension in Ukraine after claims by Russian President Vladimir Putin that all Russian troops deployed along the border with Ukraine have been withdrawn. Back home, Amtek Auto, Amtek India, Capital First, Glenmark Pharmaceuticals, Gulf Oil Corp, Orient Paper and Industries, Rain Industries, Sintex Industries and Union Bank of India will be in focus on account of March quarter earnings announcement.

The market breadth on BSE was positive, out of 1,976 stocks traded, 1,115 stocks advanced, while 106 stocks declined on the BSE.

The BSE Sensex is currently trading at 22,408.90 up by 85.00 points or 0.38% after trading in a range of 22,413.84 and 22,329.39. There were 23 stocks advancing against 7 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 gained 0.69%.

The gaining sectoral indices on the BSE were Bankex up by 0.73%, Metal up by 0.60%, Auto up by 0.54%, Healthcare up by 0.46% and PSU up by 0.43%. While, Capital Goods down by 0.34%, Realty down by 0.30% and Consumer Durables down by 0.11% were the losing indices on BSE.   

The top gainers on the Sensex were Cipla up by 2.26%, Hindalco up by 1.55%, ICICI Bank up by 1.45%, Tata Motors up by 1.24% and Tata Steel up by 1.18%. On the flip side, Gail India down by 1.29%,  L&T down by 0.73%, Hero MotoCorp down by 0.58%, Infosys down by 0.22% and Sun Pharma down by 0.18%.

Meanwhile, European companies are upbeat and keen to invest in India despite challenges faced by the economy. According to a study they are looking forward to a fresh round of growth once the new government is formed in the country this month. Domestic market growth potential, proximity to markets or customers and skilled workforce availability are the three most important reasons for European firms to invest in India.

Besides, the European Union (EU) is also confident of an early conclusion of the bilateral trade pact with Indian, which has been in the works for a while. Total India-EU bilateral trade was $94.43 billion during April-February, 2012-13 and stood at $109.86 billion for the entire fiscal year 2011-12.

Further, the study underscored that tactical green-field investments, landmark acquisitions and steadfast dedication through uncertain economic cycles have been the key ingredients for the success enjoyed by European companies in India. The study further has highlighted that European firms optimism for India have underpinned them adapt their products and services to the mass market and take a long term view of India.

Europe India Chamber of Commerce (EICC) Secretary General Sunil Prasad highlighted that global headquarters should not expect their India units to rake in the profits every quarter and rather should have lot of patience and deep pockets to sustain cash flow uncertainties. He further emphasized upon the need to focus n the potential and not the short-term challenges.

European companies spent $198 billion in India in the last 10 years, making them the largest investors. In the same period, Japanese and US firms channelised $138 billion and $50.7 billion, respectively, into their India units.

The CNX Nifty is currently trading at 6,675.25 up by 22.70 points or 0.34% after trading in a range of 6,680.85 and 6,656.05. There were 34 stocks advancing against 16 declining on the index.

The top gainers of the Nifty were Cipla up by 2.27%, ICICI Bank up by 1.73%, Hindalco up by 1.63%, Tata Steel up by 1.23% and Tata Motors up by 1.15%. On the flip side, Gail down by 1.95%, BPCL down by 0.92%, L&T down by 0.68%, Ambuja Cements down by 0.67% and DLF down by 0.53% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 1.11%, Hang Seng increased 0.54%, KLSE Composite jumped by 0.13%, Nikkei 225 spurted by 1.30%, Straits Times gained 0.45%, Seoul Composite added 0.25% and Taiwan Weighted was up by 0.51%. On the flip side, Jakarta Composite was down by 0.35%.