Markets trade firm led by power and capital goods

Markets continue to trade firm in the afternoon session with no sense of any profit booking and almost all the sectoral indices trading in green led by power, capital goods, realty and oil & gas sector stocks. There is euphoria in the Power sector stocks on buzz that the incoming government will have a major thrust on the area, while infra and realty stocks too are expecting some recovery coming out of stagflation. Traders were also getting support from the relentless buying by the foreign institutional investors. On the same time some consolidation in rupee has given a reason to cheer for the exporters after Reserve Bank of India was reportedly spotted buying dollars via state-run lenders. However, markets witnessed some selling in a knee-jerk reaction to the nation’s biggest lender State Bank of India’s numbers, which reported a decline in net profit of 20.89% to Rs 14173.77 crore for the year ended March 31, 2014, as compared to Rs 17916.23 crore for the year ended March 31, 2013. For the quarter ended March 31, 2014 the bank reported a net profit decline of 7.83% to Rs 3040.74 crore, as compared to Rs 3299.22 crore in same quarter last year. However, the bank was able to reduce its net NPA to 2.57% from 3.24%.

The BSE Sensex is currently trading at 24607.81, up by 233.41 points or 0.96% after trading in a range of 24697.60 and 24470.78. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap index was up by 1.22%, while Small cap index up by 1.71%.

The top gaining sectoral indices on the BSE were Power up by 2.71%, Capital Goods up by 1.98%, Metal up by 1.68%, Realty up by 1.31% and TECK was up by 1.21%. On the flip side, Consumer Durables down by 0.16% and Bankex down by 0.04% were the only losing indices on BSE.    

The top gainers on the Sensex were Bharti Airtel up by 4.12%, SSLT up by 3.88%, Tata Power up by 3.77%, NTPC up by 3.45% and BHEL was up by 3.18%. On the flip side,Hindalco down by 1.93%, HDFC Bank down by 1.69%, Gail India 1% and Bajaj Auto down by 0.42% were the losers. 

Meanwhile, the Department of Disinvestment (DoD) is of the view that new government could look at the possibility of strategic sale of state-owned enterprises in the non-core sectors like textiles, petrochemical and transport equipments in order to meet the ambitious disinvestment target of Rs 51,925 crore this fiscal. These views formed part of the suggestions made by the DoD for new government which will assume office on May 26.

The department further noted that move to divest entire stake in the non-strategic public sector units (PSUs) would help the government in realising the true value of the investments made in setting up of these firms.

During the interim budget, the government proposed to mobilise Rs 15,000 crore from the stake sale in HZL and Balco. It presently holds 29.54 percent share in HZL and 49 percent in Bharat Aluminium Company (Balco). Further, the government hoped to garner Rs 36,925 crore from disinvestment in different PSUs in 2014-15. 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.

India Inc had also expressed the need for new government to divest stake in the top 10 cash-rich PSUs to raise around Rs 1 lakh crore, which could have been used to provide much-needed push to economic growth and tide over revenue shortfall. India Inc had highlighted that the new government 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 CNX Nifty is currently trading at 7,339.85, up by 63.45 points or 0.87% after trading in a range of 7,365.35 and 7,293.90. There were 39 stocks advancing against 11 declining ones on the index.

The top gainers of the Nifty were IDFC up by 5.26%, Bharti Airtel up by 4.24%, SSLT up by 3.96%, BHEL up by 3.30% and Tata Power was up by 3.07%. On the flip side, Hindalco down by 1.74%, HDFC Bank down by 1.54%, Kotak Bank was down by 1.21%, Indusind Bank was down by 1.16% and GAIL down by 0.88% were the major losers on the index.

Asian equity indices were trading in green; Straits Times up by 0.28% to 3,274.68, Nikkei 225 up by 0.87% to 14,462, Jakarta Index up by 0.02% to 4,970.86, Taiwan Weighted up by 0.43% to 9,008.22, Hang Seng up by 0.07% to 22,969.83 and Shanghai Composite up by 0.66% to 2,034.57.

The European markets slipped into red after a flat start, CAC 40 was down by 0.07% to 4474.14, DAX was down by 0.05% to 9715.62 and FTSE 100 was down by 0.21% to 6806.02.