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

Indian bourses added gains to continue firm trend in late morning session, hovering near the intra-day high level driven by positive global cues and buying witnessed in front line blue chip stocks such as BHEL, Bharti Airtel and SSLT among others. Buying was broad based and all the sectoral indices were trading in green on BSE. Sentiments remained extremely bullish on persistent buying by foreign investors who expect the new BJP-led NDA government to take measures for reviving the investment climate.  With the improvement in trading sentiments, buying activity also gathered momentum in mid and small-cap sector stocks, having potential to appreciate. In scrip specific development, Coal India gained 1.27%, adding to yesterday's 5.10% surge, after a report that prime minister-designate Narendra Modi was exploring an overhaul of the state behemoth, a step that would unlock more value in the firm. Moreover, Ashok Leyland rose over 10% in trade to hit its fresh 52-week high of Rs 31.75, as the company reported over two-fold jump in net profit at Rs 363.39 crore for the fourth quarter ending March 31, 2014. While, shares of HDFC Bank traded 1.39% lower on news that foreign funds will not be able to invest in the stock.

On global front, Asian markets have made a strong start as investors lapped up signs of improving momentum in the world's biggest economies, with Tokyo's Nikkei poised to score its first weekly gain in over a month thanks to a weaker yen. US stocks ended higher for the second straight session, led by small-cap stocks, while the Nasdaq surged on a rally in biotech shares. Back home, the rupee hit a fresh eleven months high of 58.360 per dollar, tracking stronger domestic shares and following gains in Asian markets on improved risk appetite globally. Meanwhile, Bosch, Colgate Palmolive, Engineers India, Excel Industries, HDIL, ITC, Sun TV Network and State Bank of India will be in focus on account of March quarter earnings announcement. The market breadth on BSE was positive, out of 2401 stocks traded, 1827 stocks advanced, while 498 stocks declined on the BSE.

The BSE Sensex is currently trading at 24686.95 up by 312.55 points or 1.28% after trading in a range of 24692.09 and 24470.78. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.33%, while Small cap index up by 2.07%.

The gaining sectoral indices on the BSE were Capital Goods up by 2.47%, Power up by 2.42%, Realty up by 2.23%, Oil & Gas up by 1.75% and PSU up by 1.70%, while there were no losing indices on BSE.   

The top gainers on the Sensex were BHEL up by 4.68%, Bharti Airtel up by 4.36%, SSLT up by 3.40%, ONGC up by 2.86% and NTPC up by 2.60%. On the flip side, Hindalco down by 1.39%, HDFC Bank down by 0.92% and Bajaj Auto down by 0.22%.

Meanwhile, Industry body Assocham has outlined an action plan suggesting measures for new government to boost the economic growth.  The action plan is aimed at achieving economic growth of 9 to 10 percent over the medium term and sustaining the high-growth path.

Assocham’s action plan highlighted that the new government must introduce single-window clearance for pending projects, relax FDI limits across key sectors, privatise sick PSUs, divest its holding in top 10-15 PSUs to generate over Rs 1 lakh crore of capital. Further, the industry body has also pitched for GST implementation, liberalisation of ECB norms, incentives for investments, restoration of the SEZ policy to its original form and easing of processes for companies planning to set up manufacturing units.

Emphasizing the need to create an environment for increasing investments, Assocham President Rana Kapoor said that new government should introduce suitable policy framework to improve the business sentiments in the country. Further, a long term approach to fiscal consolidation along with clear policies is urgently needed for addressing structural bottlenecks and high inflation. Rana Kapoor further added that in order to expedite the implementation of big infrastructure projects, new government must accelerate land acquisition and environment clearances process for mega projects by setting up a joint task force comprising central ministries like environment, finance, administrative along with the states ministries. New government must take measures soon to replace existing state and central levies with a uniform tax as implementation of Goods and Services Tax (GST) can boost India's economy by up to two percentage points.

Currently, Indian economy is struggling with slowdown and the factors like low investments, slow execution of infrastructure projects and prevailing high interest rates in order to combat elevated inflation have been adversely impacting the domestic economy. Indian economy’s growth slowed down to 4.6% during the first three quarter of FY14 and is likely to remain at sub-5% level in FY14.

The CNX Nifty is currently trading at 7,359.85 up by 83.45 points or 1.15% after trading in a range of 7,363.45 and 7,293.90. There were 45 stocks advancing against 5 declining on the index.

The top gainers of the Nifty were BHEL up by 4.57%, Bharti Airtel up by 3.73%, SSLT up by 3.51%, DLF up by 3.22% and Jindal Steel up by 3.12%. On the flip side, Hindalco down by 1.39%, HDFC Bank down by 0.62%, Bajaj-Auto down by 0.39%, Asian Paint down by 0.34% and IndusInd Bank down by 0.30% were the major losers on the index.

Asian markets were traded in mixed; Jakarta Composite increased 0.09%, Nikkei 225 surged by 1.12%, Straits Times rose by 0.22% and Taiwan Weighted was up by 0.33%. On the flip side, Shanghai Composite declined 0.03%, Hang Seng tumbled by 0.09%, KLSE Composite decreased 0.15% and Seoul Composite was down 0.07%.