Benchmarks pare gains; Nifty holds 7300 mark

Indian equity benchmarks pared some of their gains however continued to trade firm in the late afternoon session on account of buying in front line counters. The sentiments were on optimistic note from early trades over growing investor confidence that new Prime Minister Narendra Modi will take steps to boost economic growth. Traders were seen piling up positions in Power, Realty and Metal stocks, while selling was witnessed in Consumer Durables stocks. Hectic activity was witnessed in Power sector stocks on buzz that the incoming government will have a major thrust on the area, while Infra and Realty stocks too were expecting some recovery coming out of stagflation. In scrip specific development, Jain Irrigation Systems was trading firm after its March quarter net profit jumped 39 percent to Rs 75.34 crore, driven by higher sales. Reliance Communications was trading in green following reports that Chinese firm Citic Telecom is in talks with the company to buy a significant stake in its sub-marine cable business Global Cloud Xchange.

On the global front, the Asian markets were trading mostly in green, while the European markets too traded on optimistic note. 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 in the ratio of 2033:858 while 101 scrips remained unchanged.

The BSE Sensex is currently trading at 24538.85, up by 164.45 points or 0.67% after trading in a range of 24697.60 and 24470.78. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap index was up by 1.10%, while Small cap index up by 1.47%.

The top gaining sectoral indices on the BSE were Power up by 2.74%, Realty up by 1.86%, Metal up by 1.82%, PSU was up by 1.69% and Capital Goods up by 1.34%. On the flip side, Consumer Durables down by 0.58% was the only losing indices on BSE.    

The top gainers on the Sensex were Tata Power up by 5.63%, SBI was up by 5.42%, SSLT up by 4.01%, Bharti Airtel up by 3.43% and NTPC up by 3.26%. On the flip side, HDFC Bank down by 2.21%, Hindalco Industries down by 2.16%, Gail India down 1.82% Tata Motors down by 0.87% and Bajaj Auto down by 0.61% were the top 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 7,315.65, up by 39.25 points or 0.54% after trading in a range of 7,365.35 and 7,293.90. There were 33 stocks advancing against 17 declining ones on the index.

The top gainers of the Nifty were Jindal Steel up by 6.71%, Tata Power up by 5.53%, SBI up by 5.34%, IDFC up by 4.38% and SSLT was up by 3.80%. On the flip side, Hindalco Industries down by 2.22%, Kotak Bank was down by 2.12%, HDFC Bank down by 2.12%, NMDC was down by 2.00% and GAIL India down by 1.80% were the major losers on the index.

Asian equity indices were trading mostly in green; Straits Times up by 0.32%, Nikkei 225 up by 0.87%, Taiwan Weighted up by 0.43%, Hang Seng up by 0.05% and Shanghai Composite up by 0.66% while, Jakarta Index was trading down by 0.02% to 4,970.86,

The European markets were trading mostly in green; France’s CAC 40 was up by 0.05%, Germany’s DAX added 0.08% while UK’s FTSE 100 lost 0.19%.