Markets extend early gains; trade near intra-day high level

Indian bourses extended early gains to continue their firm trade in afternoon session, hovering near the intra-day high level on the back of strong buying ahead of exit poll results, which are likely to start coming in from the evening. The optimism on Dalal Street can be credited to the prospect of a Narendra Modi-led, stable NDA regime at the Centre after general election. Sentiment also got a boost as 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. Further, foreign institutional investors (FIIs) remaining net buyers in Indian equities and buying shares worth a net Rs 1268.78 crore in the previous session, too aided the sentiments. Most of the sectoral indices were trading firm and bankex was the top gainer on BSE, up by around 2.75% followed by oil and gas and capital goods indices, trading up over 2.50%. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices trading up by over 0.70%. However, investors were seen selling stocks of defensive sectors such as healthcare and IT.

Torrent Pharmaceuticals has surged around 5% after reporting 119% yoy jump in consolidated net profit at Rs 244 crore for Q4FY14 on back of strong international revenues. Shares of IRB Infrastructure Developers have surged about 7%, extending its 15% rally in past five trading sessions, after the company said it has bagged Rs 2,300 crore road project in Haryana from National Highways Authority of India (NHAI). On the other hand, Chambal Fertilisers was down nearly 3% at Rs 40, after the company reported sharp drop in net profit for the fourth quarter ended March 31, 2014.

On global front, Asian equity indices were trading in mixed with Shanghai Composite up by 1.94% and Taiwan Weighted down by 0.91% as investors turned cautious due to re-emergence of tensions in Ukraine and Russia. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,900 and 23,000 levels respectively. The market breadth on BSE was positive, out of 2,474 stocks traded, 1,313 stocks advanced, while 1,042 stocks declined on the BSE.

The BSE Sensex is currently trading at 23,433.07 up by 438.84 points or 1.91% after trading in a range of 23,443.02 and 23,008.65. 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 1.17%, while Small cap index was up by 0.73%.

The gaining sectoral indices on the BSE were Bankex up by 2.75%, Oil and Gas up by 2.55%, Capital Goods up by 2.53%, Realty up by 2.14%, and Metal up by 1.85%. While, Healthcare down by 0.34%, IT down by 0.13% and Consumer Durables down by 0.07% were the losing index on BSE.   

The top gainers on the Sensex were Coal India up by 4.09%, BHEL up by 3.92%, SBI up by 3.86%, HDFC Bank up by 3.55% and Axis Bank up by 3.10%. On the flip side, Cipla down by 1.41%, Wipro down by 1.33%, TCS down by 1.30%, Sun Pharma down by 1.21% and Hindalco Inds down by 0.49%.

Meanwhile, Deputy Chairman of Planning Commission, Montek Singh Ahluwalia has stated that rapid implementation of GST and reduction in fiscal deficit should be the thrust areas for the new government which will help Indian economy to achieve 7-7.5 percent growth. Pointing out that few quarters of down-turn is normal in any economic cycle, Ahluwalia asserted that if the new government implements suitable policies then it should be easy for the country to return to the high growth path.

Indian economy’s growth slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarter of FY14. The factors like high interest rate, low investments and slow execution of infrastructure projects have been impacting economy’s growth.

Ahluwalia further stated that the growth of the economy will also depend on the growth of the industry and the sectors like manufacturing and construction, which will have to grow at double digit growth rate. Indian industry has not performed up to expectations when the economy was growing at 8 percent, as the industry sector grew at only 6 percent. He emphasized that the growth of small and medium enterprises in the country is closely linked to the overall well-being of the economy and it is not possible to solve the problems of SMEs except in an environment of general economic growth. Therefore, it has become imperative for the country to boost the industrial sector. During April-February 2013-14 India’s annual industrial output growth declined by 0.1% from a year earlier.

By adding further, Planning Commission Deputy chief also said that new government must retain the system of speedy clearance of big infrastructure projects by the Cabinet Committee on Investment (CCI). Till January 2014, the CCI had cleared around 296 projects with estimated project cost of Rs 6,60,000 crore. The government has set the $1-trillion investment target for the infrastructure sector for the 12th Five Year Plan.

The CNX Nifty is currently trading at 6,979.40 up by 120.60 points or 1.76% after trading in a range of 6,983.35 and 6,862.90. There were 42 stocks advancing against 8 declining on the index.

The top gainers of the Nifty were Coal India up by 4.39%, BHEL up by 3.74%, SBI up by 3.72%, HDFC Bank up by 3.64% and Axis Bank up by 3.36%. On the flip side, Wipro down by 1.68%, HCL Tech down by 1.54%, Sun pahrma down by 1.41%, Cipla down by 1.36% and TCS down by 1.26% were the major losers on the index.

Asian equity indices were trading in green; Hang Seng up by 2.17% to 22,337.11, Jakarta Composite up by 0.48% to 4,921.83 and Shanghai Composite up by 1.94% to 2,050.09. While, Taiwan Weighted down by 0.91% to 8,808.61, Nikkei 225 down by 0.22% to 14,168.38 and Straits Times was down by 0.70% to 3,229.21.