Benchmarks make gap-up opening; Sensex surpasses 25,000 mark

Extending their jubilation to third straight day, Indian equity benchmarks have made a gap-up opening and frontline gauges trading with a gain of over a percent, surpassing their crucial 25,000 (Sensex) and 7,450 (Nifty) ahead of the swearing-in ceremony of Narendra Modi as India’s 15th Prime Minister. Meanwhile, the office of Prime Minister-designate Narendra Modi, before he takes over as India’s prime minister, indicated a smaller size of the next government and clubbing of ministries for smarter governance. Sentiments also remained up-beat with a FICCI survey, which has said that 93 percent out of the 76 CEOs covered by it, project a substantial improvement in the near-term economic situation with the Narendra Modi-led new government taking charge at the Centre. Some support also came in after an Assocham study indicated that riding on huge expectations from the incoming Modi government, foreign investment inflows are estimated to more than double to $60 billion level this fiscal.

Global cues too remained supportive with US markets continuing their bull run in previous session buoyed by good data of new home sales. Asian stocks were trading mostly in the green at this point of time as geopolitical risks faded following a victory for billionaire Petro Poroshenko in Ukrainian elections. Japanese market has taken the lead with yen holding its three-day gains.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. On the sectoral front, all the sectoral indices on the BSE were trading in the green with auto, capital goods, power and realty segments gaining the most. Metal, banking, oil and gas, technology and software too were trading with significant gains. The broader indices were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive; there were 1,543 shares on the gaining side against 444 shares on the losing side while 69 shares remain unchanged.

The BSE Sensex is currently trading at 25014.81, up by 321.46 points or 1.30% after trading in a range of 25037.54 and 24912.57. There were 26 stocks advancing against 4 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 1.22% and Small cap index gained 1.34%.

The top gaining sectoral indices on the BSE were, Auto up by 2.55%, Capital Goods up by 2.38%, PSU up by 2.24%, Realty up by 2.07% and Power up by 2.01%, while there was no loser.

The top gainers on the Sensex were Maruti Suzuki up by 4.02%, Coal India up by 3.65%, Tata Motors up by 3.41%, NTPC up by 2.84% and Tata Steel up by 2.82%. On the flip side, Hero MotoCorp was down by  0.64%, Dr Reddys Lab was down by 0.62%, Hindustan Unilever was down by 0.35% , Cipla was down by 0.30%  and ITC was down by 0.04%  were the losers on the Sensex.

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 7,454.25 up by 87.15 points or 1.18% after trading in a range of 7,457.45 and 7,428.55. There were 41 stocks advancing against 8 declines on the index.

The top gainers of the Nifty were Maruti up by 4.66%, Grasim up by 4.12%, Tata Motors up by 3.62%, NTPC up by 2.93% and L&T up by 2.91%. On the flip side, Asian Paint down by 1.39%, Lupin down by 0.95%, Hero Moto Co down by 0.83%, DR Reddy down by 0.81% and Cipla down by 0.62% were the top losers on the index.

Asian markets were traded in mixed; Nikkei 225 surged by 75.23 points or 0.52% to 14,537.40, Straits Times rose by 6.22 points or 0.19% to 3,284.24, Shanghai Composite increased 7.37 points or 0.36% to 2,041.94 and Taiwan Weighted was up by 37.69 points or 0.42% to 9,045.91.

On the flip side, Jakarta Composite decreased 6.22 points or 0.13% to 4,966.84, Hang Seng tumbled by 15.47 points or 0.07% to 22,950.39, KLSE Composite decreased 3.92 points or 0.21% to 1,865.30 and Seoul Composite was down by 5.49 points or 0.27% to 2,011.68.