Benchmarks continue to trade in green in late morning deals

After getting a gap-up start, benchmark equity indices continue to trade in fine fettle in late morning deals on continued buying activities by both funds and retail investors. Sentiments got upbeat on hopes that exit pulls due after the close of markets would show opposition Bharatiya Janata Party winning a majority in ongoing elections. Overseas investors, who have been the biggest driver of the rally, continue to be buyers in the cash market. On Friday, FIIs bought Indian cash shares worth 12.69 billion rupees ($211.48 million), much higher than the five-day average of 3.09 billion rupees, exchange and regulatory data show. On the BSE sectoral front, maximum positions were built in Oil & Gas counter, followed by Capital Goods and Bankex stocks, while defensive stocks such as IT and pharma were under selling pressure as investors bet on high beta cyclicals, which have been the big outperformers this year.

On the global front, Asian markets began the week on a cautious note as pro-Russian rebels in eastern Ukraine claimed a majority of voters in a disputed referendum chose independence, raising fears of a civil war. While US stocks rose with the Dow Jones Industrial Average ended at a record high last Friday, boosted by IBM, while a rebound in high-growth momentum names helped the broader market. Back home, Ballarpur Industries, Balrampur Chini Mills, Coromandel International, DB Corp, Finolex Industries, Indiabulls Power, Indian Bank, Just Dial, Orchid Chemicals and Pharmaceuticals, Prime Focus and Torrent Power will be in focus on account of March quarter earnings announcement. The market breadth on BSE was positive, out of 2154 stocks traded, 1250 stocks advanced, while 802 stocks declined on the BSE.

The BSE Sensex is currently trading at 23314.22 up by 319.99 points or 1.39% after trading in a range of 23410.36 and 23008.65. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.90%, while Small cap index up by 0.79%.

The gaining sectoral indices on the BSE were Oil & Gas up by 2.57%, Capital Goods up by 2.00%, Bankex up by 1.88%, PSU up by 1.83% and Power up by 1.69%. While, IT down by 0.38%, Healthcare down by down by 0.16% and Consumer Durables down by 0.15% were the losing indices on BSE.   

The top gainers on the Sensex were RIL up by 3.19%, Gail India up by 3.09%, SBI up by 2.92%, Axis Bank up by 2.56% and Coal India up by 2.41%. On the flip side, TCS down by 1.41%, Wipro down by 0.96%, Sun Pharma down by 0.95%, Cipla down by 0.85% and Hindalco down by 0.35%.

Meanwhile, Easing pressure on the country’s external sector as well as the rupee, India’s trade deficit contracted to $10.01 billion in April as compared to $10.51 billion in the previous month and $17.67 billion reported in the corresponding month of the previous year.

The contraction in trade deficit was credited to high exports which increased by 5.26% to $25.63 billion in the reported month from $24.35 in April 2013 mainly on the back of healthy growth in engineering, marine and leather goods shipments. Engineering, marine and leather goods exports during April recorded growth of 21.25 %, 42.18 % and 30.42 % respectively.

Furthermore, Indian imports too witnessed strong contraction at 15% to $35.72 billion in April from $42.02 billion in the same month of previous year. Contraction in domestic import was primarily driven by weak domestic demand and restrictions on gold imports that steepened the fall in non-oil imports to 21.5% y-o-y to $22.74 billion in the reported month. Gold imports last month declined by 74.13 % to $1.75 billion from $6.78 billion in April 2013 due to the stern Government’s norms like high customs duty of 10% and existing 80/20 rule under which 20% of all gold imports by importers has to be re-exported. Oil imports for the month of April also declined by 0.6 % to $12.98 billion as compared to $13.05 billion in the corresponding month last year.

Trade deficit, being an important component of current account deficit (CAD), raised hopes that the improvement in CAD in the last financial year will continue in the new fiscal year. In the FY14, the CAD is likely to improve to around 2% of GDP level as against the record high at 4.8% of GDP in FY13 on the back of improved trade deficit figure.

The CNX Nifty is currently trading at 6,946.20 up by 87.40 points or 1.27% after trading in a range of 6,975.70 and 6,862.90. There were 43 stocks advancing against 7 declining on the index.

The top gainers of the Nifty were Reliance Industries up by 3.24%, SBI up by 2.93%, Axis Bank up by 2.82%, IndusInd Bank up by 2.68% and Gail up by 2.64%. On the flip side, TCS down by 1.34%, Sun Pharma down by 1.28%, Wipro down by 1.26%, Cipla down by 1.10% and Hindalco down by 0.56% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite increased by 1.89%, Hang Seng surged by 2.41%, KLSE Composite up by 0.01%, Nikkei 225 up by 0.06%,  Jakarta Composite added 0.48% and Seoul Composite was up by 0.49%. On the flip side, Straits Times slipped by 0.65% and Taiwan Weighted was down by 0.88%.