Benchmarks continue to trade firm in afternoon session

Indian equity benchmarks continued to trade firm in afternoon session amid firm global cues and buying witnessed in frontline blue chip stocks such as Bharti Airtel, BHEL and SSLT among others. Domestic benchmarks extended gains on the back of persistent buying by domestic and foreign investors who expect the new Government to take measures for reviving business and investments climate in the country. Most of the sectoral indices were trading in green with power being the top gaining index up by 2.56% on BSE. Further, the gains in capital goods, realty and oil and gas stocks provided strength to the major indices. Buying activity also gathered momentum in stocks of mid and small-cap indices trading up by over 1 percent. However, consumer durables sector stocks witnessed profit booking after the recent gains.    

Ashok Leyland has rallied around 11% to Rs 32 after its net profit more than doubled to Rs 363 crore Q4FY14 mainly due to exceptional items including sale of non-crore assets. Jain Irrigation Systems was trading around 7% higher to Rs 117 after posting 39% yoy increase in consolidated net profit to Rs 75.34 crore for Q4FY14 due to higher sales. Deepak Nitrite has surged around 10% to Rs 880 on reports that the company is planning to raise funds for expansion and to repay debt.

On global front, major Asian equity indices were trading in green with Straits Times up by 0.21% and Nikkei 225 up by 0.86%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,300 and 24,500 levels respectively. The market breadth on BSE was positive, out of 2,719 stocks traded, 1,912 stocks advanced, while 715 stocks declined on the BSE.

The BSE Sensex is currently trading at 24,611.72 up by 237.32 points or 0.97% after trading in a range of 24,697.60 and 24,470.78. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.14%, while Small cap index up by 1.63%.

The gaining sectoral indices on the BSE were Power up by 2.56%, Capital Goods up by 2.12%, Oil and Gas up by 1.47%, Realty up by 1.38% and Teck up by 1.38%. On the flip side, Consumer Durables down by 0.36% was the only losing index on BSE.   

The top gainers on the Sensex were Bharti Airtel up by 3.90%, BHEL up by 3.41%, SSLT up by 3.09%, Tata Power up by 2.31% and ONGC up by 2.28%. On the flip side, Hindalco Inds down by 1.51%, HDFC Bank down by 1.20%, Bajaj Auto down by 0.63% and Gail India down by 0.08%.

Meanwhile, concerned over the stagnate oil and gas production in India, Oil Ministry has urged the new government to take measures soon for enhancing the fuel exploration activities in the country. Oil Ministry has highlighted that the national oil companies such as ONGC and HPCL are losing focus on domestic exploration, while the signed contracts with private explorers such as Reliance Industries are going out of track.

Oil Ministry has reported that subsidy bill increased to $26 billion per annum but the domestic oil and natural gas production is not showing any sign of revival. Many decisions taken by the previous Government over the past few years have proved wrong. The landmark scheme of Direct Benefit Transfer on LPG (DBTL), where customers got subsidy in cash to buy cooking gas at market rates, was a mistake. Ministry further stated that production sharing contracts (PSCs) beleaguered by legal disputes and no clarity on engagement with Iran in view of US sanctions has not only delayed participation in a mega gas field but also hampered Iran-Pakistan-India gas pipeline. Oil Ministry is of the view that production sharing contracts must be revised based on the experience with existing contracts.

Presently, Oil Ministry has been engaging in a legal fight with Reliance Industries over the fall in natural gas output from the eastern offshore KG-D6 block. Output there has dipped to a tenth of the planned production of 80 million standard cubic metres per day. Oil and Natural Gas Corporation (ONGC) has started focus more on downstream business of petrochemicals as against its core business of producing more oil and natural gas. Furthermore, refiner Hindustan Petroleum Corp (HPCL) setting up sugar mills as an example of diversion from core activities.

India currently is the fourth largest oil consumer in the world behind the US, China and Japan, and imports around 80 percent of its oil needs. It is estimated that India will become the world's largest oil importer by 2020. So far, the country had not invested much in intensive exploration and exploitation of untapped oil and gas reserves in the country. Presently, only 0.93 million sq km area in India is held under exploration and production in 19 basins as compared to total estimated sedimentary area of 3.14 million square kilometres, comprising 26 sedimentary basins.

The CNX Nifty is currently trading at 7,343.75 up by 67.35 points or 0.93% after trading in a range of 7,365.35 and 7,293.90. There were 40 stocks advancing against 10 declining on the index.

The top gainers of the Nifty were IDFC up by 4.34%, Bharti Airtel up by 4.01%, Power Grid up by 3.63%, BHEL up by 3.47% and SSLT up by 2.99%. On the flip side, Hindalco down by 1.52%, HDFC Bank down by 1.18%, Indusind Bank down by 1.15%, Bajaj Auto down by 0.72% and Kotak Bank down by 0.54% were the major losers on the index.

Asian equity indices were trading in green; Straits Times up by 0.21% to 3,272.50, Nikkei 225 up by 0.86% to 14,461.32, Jakarta Index up by 0.09% to 4,974.32, Taiwan Weighted up by 0.43% to 9,008.22, Hang Seng up by 0.04% to 22,962.76 and Shanghai Composite up by 0.37% to 2,028.42.