Benchmarks pare gains; Sensex slips below 25000 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 the early trade ahead of Prime Minister designate Narendra Modi’s swearing in ceremony later in the day, wherein street primarily awaits composition of Modi's cabinet, allocation of portfolios to the Prime Minister's office. Traders were seen piling up positions in Capital goods, Auto and IT stocks, while selling was witnessed in Realty, Consumer Durables and HealthCare sector stocks. Hectic activity was witnessed in defence stocks like BEL, BEML, Pipavav Defence, BHEL and L&T on buzz that Narendra Modi is expected to retain one of the most crucial Defence ministry with himself. In scrip specific development, Sun Pharmaceutical Industries and Ranbaxy Laboratories were both trading firm after Andhra Pradesh High Court cleared the decks for the $4 billion deal by lifting the stay it had imposed last month.

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 7,400 and 24,900 levels respectively. The market breadth on BSE was positive in the ratio of 1718:1196 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 24988.63, up by 295.28 points or 1.20% after trading in a range of 25175.22 and 24912.57. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.35%, while Small cap index was down 0.30%.

The gaining sectoral indices on the BSE were Capital Goods up by 4.05%, Auto up by 2.78%, IT up by 1.49%, TECK up by 1.10% and PSU up by 0.92%. On flip side, Realty down by 3.0%, Consumer Durables down 1.46% and HealthCare down by 0.23% was the only losers on the index.

The top gainers on the Sensex were M&M up by 6.90%, L&T up by 5.58%, Tata Motors up by 3.71%, Wipro up by 3.22% and BHEL up by 2.57%. On the flip side, Hindalco Industries down by 1.71%, SBI down by 1.61%, Reliance Industries down by 1.13%, Cipla down by 0.99% and Tata Power down by 0.71%.

Meanwhile, in order to boost the Indian financial sector, Finance Ministry has prepared a reforms agenda for the new government aimed at freeing up the financial sector which will put the country back on a high-growth trajectory. The Ministry’s draft includes proposals such as new monetary policy framework, a revamp of the stock and commodities markets, and implementation of recommendations made by the Financial Sector Legislative Reforms Commission (FSLRC). FSLRC had earlier suggested a uniform Indian Financial Code and limiting RBI's role to regulating banking operations, payment systems, monetary policy management and consumer protection.

Finance Ministry is also of the view that Commodities futures markets should be able to support price discovery of various commodities particularly in country's large farm sector. Therefore, it pitched for complete revamp of commodities and stock markets to deepen them. Further, the Finance Ministry has also sought for stricter measures to deal with non-performing loans. Ministry is of the view that recovery efforts will not make much progress unless banks' books are cleaned up and some innovative ideas are in the works to achieve this.

Gross NPAs of public sector banks rose to 4.44% of advances at the end of March as compared to 2.32% in the year ago. Delays in implementation of project due to hurdles like land and environment clearances during the past few years contributed to the rise in NPAs, particularly in the infrastructure sector. The ministry also recommended the new government to take realistic decision on Urjat Patel report on inflation targeting. The RBI’s panel led by Deputy Governor Urjit Patel has outlined inflation-targeting as part of the monetary policy framework and suggested central bank to bring down retail inflation to 6% by January 2016.

The CNX Nifty is currently trading at 7,441.85, up by 74.75 points or 1.01% after trading in a range of 7,504.00 and 7,428.55. There were 32 stocks advancing against 18 declining ones on the index.

The top gainers of the Nifty were M&M up by 6.84%, L&T up by 5.68%, Grasim up by 5.00%, Tata Motors up by 3.78% and Wipro up by 3.01%. On the flip side, DLF down by 3.62%, IDFC down by 3.07%, Asian Paints down by 2.53%, Bank of Baroda down by 2.17% and Hindalco Industries down by 1.91% were the major losers on the index.

Asian equity indices were trading mostly in green; Straits Times added 0.16%, Nikkei 225 advanced 0.97%, Taiwan Weighted gained 0.31% and Shanghai Composite up by 0.34% while, Hang Seng down by 0.01% and Jakarta Index down by 0.12%.

The European markets were trading mostly in green; France’s CAC 40 was up by 0.21%, Germany’s DAX added 0.84% while UK’s FTSE 100 lost 0.07%.