Benchmarks vault close to 2% on election optimism

Steadily adding ground, local equity markets have climbed to day’s high on persistent buying activities by funds and retail investors on high hopes of victory of business-friendly reformer Modi's Bharatiya Janata Party (BJP) led government in elections set to conclude next week. India's five-week elections are set to conclude on Monday, with exit polls from media organizations to be issued after the last votes are cast. Both, Sensex and Nifty have vaulted close to 2% and were trading past the crucial 22750 and 6750 levels respectively. Meanwhile, broader indices too have equally participated in the rally, with both Midcap and small-cap index trading higher with gains in the range of 0.65%-0.85%.

Markets remained largely unscathed from negative start of European counterparts, which declined at the open on Friday, falling from a six-year high reached the prior day when ECB President Mario Draghi hinted at a rate cut next month. On the flip side, Asian counterparts were set for a mostly positive close on account of dovish comments by the U.S. Federal Reserve chair Janet Yellen and upbeat Chinese trade data that suggested some signs of stabilisation in the world's second-largest economy.

Back home, stocks from Banking, Realty and Capital Goods counters were witnessing maximum investors’ demand, while those from Healthcare counter was the only loser. Banking stocks were among the leading gainers, with the National Stock Exchange banking sub-index gaining as much as 3.1 percent to a record high. Meanwhile, Metal stocks gained, with Hindalco Industries ending 1.2 percent higher and Tata Steel gaining 0.53 percent on hopes for revival in Chinese demand. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1401:911; while 126 shares remained unchanged.

The BSE Sensex is currently trading at 22774.16, up by 430.12 points or 1.92% after trading in a range of 22795.18 and 22,317.18. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.85%, while Small cap index up by 0.65%.

The gaining sectoral indices on the BSE were Bankex up by 3.09%, Realty up by 2.64%, Capital Goods up by 2.46%, Oil & Gas up by 2.21% and Power up by 1.98%. While, Healthcare down by 0.34% was the only losing index on BSE.   

The top gainers on the Sensex were Hindalco Inds up by 4.47%, ICICI Bank up by 4.16%, Maruti Suzuki up by 3.66%, Coal India up by 3.48% and HDFC up by 3.48%. On the flip side, Dr Reddy’s Lab down by 0.90% and Sun Pharma down by 0.44% were the only losers on the index.

Meanwhile, countering opposition’s attack on the Centre over the state of the economy, Finance Minister P Chidambaram highlighted that the economy has stabilized and was about to see a revival in the investment, leading to high growth.

On the capex plan, he underscored that domestic capital expenditure of about 23 public sector undertakings, including Navaratnas and Mini Ratnas, for the current fiscal would be at Rs 1.33 lakh crore as against Rs 1.25 lakh crore in the previous year and further praised the performance of the public sector undertakings (PSUs) for driving domestic investment.

Besides, Chidambaram expressed confidence that inflation of food items would be contained and said the Government brought about 1,200 lakh tonnes of wheat and rice to the public through various schemes and the public distribution system.  He highlighted that government had sold 69.01 lakh tonnes of wheat in the open market in the year 2012-13, while in the following year, the government sold 61.10 lakh tonnes of wheat. Similarly, the government had sold 0.99 lakh tonnes of rice during 2012-13, while in 2013-14, the government sold 1.48 lakh tonnes of rice in the open market.

The Finance Minister further stated that the Foreign Direct Investment (FDI) in the last financial year, till February, was $26.90 billion. Additionally, he added that Rupee at 60 per dollar was true reflection of the value of currency.The CNX Nifty is currently trading at 6,788.45, up by 128.60 points or 1.93% after trading in a range of 6,793.40 and 6,652.15. There were 47 stocks advancing against 3 declining on the index.

The top gainers of the Nifty were Hindalco up by 4.53%, ICICI Bank up by 4.14%, IDFC up by 3.78%, HDFC up by 3.47% and Coal India up by 3.46%. On the flip side, Dr Reddy’s Lab down by 0.87%, Sun Pharma down by 0.63% and Lupin down by 0.54% were the major losers on the index.

Asian equity indices were trading in green; Hang Seng up by 0.02%, Nikkei 225 advanced up by 0.25%, Straits Times was up by 0.02% and Jakarta Composite added 0.17%. While,  Shanghai Composite down by 0.03% and Taiwan Weighted declined by 0.46% were the only losers on the index.

European markets got off to a negative start; with France’s CAC 40 declining 0.47%, UK’s FTSE 100 shedding 0.29% and Germany’s DAX sliding by 0.13%.