Benchmarks magnify gains; Nifty touches 7000 mark

Indian equity benchmarks added gains to continue their firm trade in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on optimistic note from early trade on expectation of Bharatiya Janata Party (BJP) winning a majority, a party which is seen by markets as being more investor friendly. The NSE’s volatility index, or India VIX, also hit its highest level since March 11, 2009, and is headed for a fourth consecutive session of gains ahead of exit poll results scheduled later in the day. Investors are however keeping an eye on Consumer Price Inflation (CPI) data and Industrial Production data due later in the session, the latest one’s before the RBI’s next monetary policy on June 3. Traders were seen piling up positions in Oil & Gas, PSU and Bankex stocks, while selling was witnessed in HealthCare sector stocks. In scrip specific development, United Spirits was trading weak after brokerage firm downgraded the stock to reduce from buy.

On the global front, the Asian markets were trading on a mixed note, while the European markets traded mostly on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,950 and 23,400 levels respectively. The market breadth on BSE was negative in the ratio of 1344:1360 while 147 scrips remained unchanged.

The BSE Sensex is currently trading at 23471.48, up by 477.25 points or 2.08% after trading in a range of 23503.71 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 0.79%, while Small cap index was up by 0.51%.

The gaining sectoral indices on the BSE were Oil & Gas up by 2.79%, PSU up by 2.53%, Bankex up by 2.42%, FMCG up by 2.26% and Capital Goods up by 2.16% while, HealthCare down by 0.81% was the sole losing index on BSE.   

The top gainers on the Sensex were Coal India up by 4.14%, HDFC Bank up by 4.07%, ITC up by 3.50%, Hero MotoCorp up by 3.37% and Gail India up by 3.28%.

On the flip side, Sun Pharma down by 1.63%, Cipla down by 1.55%, Hindalco Industries down by 1.04%, Wipro down by 0.62% and TCS down by 0.61% were the losers on the index.

Meanwhile, concerned over the prevailing economic slowdown in the country, the industry chamber Assocham has said that the new government should divest stake in the top 10 cash-rich PSUs to raise around Rs 1 lakh crore, which can be used to provide much-needed push to economic growth and tide over revenue shortfall. 

Assocham President Rana Kapoor also said that the new government formed after the general election should take advantage of robust state of domestic stock markets helped by heavy inflow of funds from the foreign institutional investors (FIIs). The disinvestment at high level in cash-rich PSUs will help the new government to improve its revenue, which faces constraint of lower tax earnings because of slowdown in economy. The top 10 PSUs in which the government can divest 10 percent or more stake are ONGC, Coal India, State Bank of India, NTPC, IOC, NMDC, Power Grid Corporation, BHEL, GAIL and Bank of Baroda.

Industry body further noted that the combined market capitalisation of the top 10 PSUs has exceeded Rs 11 lakh crore and if a stable government is formed at the Centre, the combined the m-cap of these PSUs is expected to go up by another 15-20 percent, reflecting an opportunity to new government for better realizations from minority divestment.

In the previous fiscal year, the Government was able to disinvest only around Rs 16,000 crore as against the set target of Rs 40,000 crore mainly on account of subdued economic conditions. The government had cut Rs 79,790 crore from the budgeted Plan expenditure of Rs 5,55,532 crore for financial year 2013-14 amid concerns over burgeoning fiscal deficit. India’s fiscal deficit is likely to widen at 4.6% of GDP in the previous fiscal as compared to 4.89% of GDP in FY13.

The CNX Nifty is currently trading at 6,988.15, up by 129.35 points or 1.89% after trading in a range of 7,000.25 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 4.42%, Ultratech Cement up 4.30%, HDFC Bank up by 4.08%, ITC up by 3.69% and Hero MotoCorp up by 3.36%.

On the flip side, McDowell down by 2.43%, Sun Pharma down by 2.00%, Cipla down by 1.48%, Hindalco Industries down by 1.39% and Jindal Steel down by 1.23% were the major losers on the index.

Asian equity indices were trading on a mixed note; Hang Seng up by 1.82%, Jakarta added 0.47% and Shanghai Composite spurted 2.08% while, Taiwan Weighted declined by 0.91%, Nikkei 225 lost 0.35% and Straits Times lost 0.90% were the losers amongst Asian pack.

The European markets were trading mostly in green; France’s CAC 40 was up by 0.16%, Germany’s DAX added 0.28% and UK’s FTSE 100 gained 0.27%.