Benchmarks continue to trade in green in late morning session

After getting a gap-up start, benchmark equity indices continued to trade in fine fettle in late morning deals on the back of buying by funds and retail investors following the beginning of new settlement for June month in the derivatives segment. However, the upside was capped as foreign institutional investors (FIIs) continued to remain net seller of Indian equities over the past four sessions. Traders were seen piling up positions in Realty, Metal and Capital Goods stocks, while selling was witnessed in Bankex, IT and Teck sector stocks. Moreover, defense stocks like BEML, Bharat Electronics, Astra Microwave Products, Pipavav Defence and Offshore Eng Co, were trading higher after the report that the government was considering introducing 100% foreign direct investment in defense. In scrip specific development, shares of Voltas gained nearly 4% after the operating profits for the quarter ended March 31, 2014 was significantly higher by 58% at Rs 123 crore as compared to Rs 78 crore for the corresponding period previous year. Moreover, shares of Crompton Greaves were up over 3% after the company's profit rose 2.5 times to Rs 63.82 crore in fourth quarter as against Rs 25.27 core profit in same period last year. 

Meanwhile, traders were awaiting Q4 economic growth data due later in the day, while some traders were waiting for the Reserve Bank of India’s (RBI) bi-monthly monetary policy review due out on Tuesday. The trade is likely to turn choppy in absence of supportive cues from Asian peers. On the global front, Asian markets were witnessing profit booking following weak report that the U.S. economy shrank at a 1 per cent annual rate in the first three months of the year.  However, US stocks had ended higher on Thursday as traders shrugged off data that showed the economy shrank in the first quarter and bet on improvement in the second quarter.

Back home, Aurobindo Pharma, BGR Energy Systems, Mahindra and Mahindra, Tata Chemicals, ABG Shipyard, Financial Technologies India, Future Retail, Hindustan Motors, Multi Commodity Exchange of India and Suzlon Energy will be in focus on account of March quarter earnings announcement. The market breadth on BSE was positive, out of 2204 stocks traded, 1376 stocks advanced, while 755 stocks declined on the BSE.

The BSE Sensex is currently trading at 24306.80 up by 72.65 points or 0.30% after trading in a range of 24353.59 and 24167.94. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.88%, while Small cap index up by 1.12%.

The top gaining sectoral indices on the BSE were, Realty up by 3.62%, Metal up by 1.62%, Capital Goods up by 1.56%, Oil & Gas up by 1.49% and Power up by 1.37%, while Bankex down by 0.47%, IT down by 0.42% and Teck down by 0.06% were the only losers on the sectoral index.

The top gainers on the Sensex were ONGC up by 2.19%,  BHEL up by 2.07%, Bharti Airtel up by 1.98%, Tata Steel up by 1.81% and Gail India up by 1.52%. On the flip side, Tata Motors down by 1.52%, Wipro down by 1.20%, Axis Bank down by 1.05%, SBI down by 0.93% and TCS down by 0.86%.

Meanwhile, Finance Ministry has stated that the Reserve Bank of India (RBI) will come out with fresh guidelines on new bank licences in the next four months. During April, the RBI has issued bank licences to only two companies IDFC and Bandhan Financial Services.

Financial Services Secretary G. S. Sandhu said that the central bank will take four months to draft new guidelines for issuing banking licences to more players. Currently, there are 25 public and private sector applicants for new banking licence including NBFCs and various large corporates such as India Post, IFCI and large business houses such as the Anil Ambani group and the Aditya Birla group. The move will help to enhance the penetration level of the Indian banking industry which in turn will provide impetus to economic growth through providing more credit to small and medium size enterprises. At present, there are 27 public sector banks and 22 private sector lenders in India.

According to the RBI’s final guidelines for new set of proposed banks, banks should have a minimum equity capital of around Rs 5 billion and not have foreign ownership of more than 49% for the first five years of operation. The norms also require that one out of every four branches opened by the new banks should be located in rural areas.

The CNX Nifty is currently trading at 7,254.00 up by 18.35 points or 0.25% after trading in a range of 7,272.50 and 7,118.45. There were 34 stocks advancing against 16 declining on the index.

The top gainers of the Nifty were DLF up by 3.63%, Jindal Steel up by 2.43%, ONGC up by 2.34%, BPCL up by 2.17% and Bharti Airtel up by 2.09%. On the flip side, Tata Motors down by 1.59%, HDFC down by 1.16%, Wipro down by 1.09%, HCL Tech down by 1.05% and ACC down by 1.01% were the top losers on the index.

Most of Asian markets were trading in red; Jakarta Composite declined 1.01%, KLSE Composite slipped by 0.10%, Nikkei 225 tumbled by 0.35%, Straits Times decreased 0.24%, Seoul Composite shed by 0.40% and Taiwan Weighted was down by 0.18%. On the flip side, Shanghai Composite was marginally in green by 0.04 points and Hang Seng was up by 0.23%.