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 as funds and retail investors made fresh buying on the back of strong corporate earnings. Off day’s high, while Sensex and Nifty were trading above the crucial 24,350 and 7250 levels respectively, with gains of over 0.60%. Further, the market is waiting at RBI's rate action scheduled in its policy meeting on Tuesday. Although the central bank is likely to keep rates steady, some traders expects some other forms of easing that can help spur growth. However, some may cautious about subdued GDP data announced after the market hours on Friday. India’s economic growth remained below the 5% mark for the second year in a row at 4.7% in 2013-14.  In scrip specific development, Gains were led by Larsen & Toubro, which surged nearly 6% on the back of strong quarterly results announced on Friday. Suzlon Energy was up by 9% after its EBITDA (earnings before interest, tax, depreciation and amortization) turned positive. On the other hand, Financial Technologies India was trading down by 2.76%, after it reported a net loss of Rs 371.25 crore. Moreover, M&M was trading down after it reported 13% year-on-year drop in its monthly sales growth.

On the global front, most of the Asian stocks rose in early trade after a gauge of China’s manufacturing expanded at the fastest pace in five months and the nation’s policymakers said they will cut the reserve requirement ratio for some banks. Further, the US markets ended modestly higher in last session, snapping one of the best months of the year so far. Back home, traders were seen piling up positions in Capital Goods, PSU and Power stocks, while selling was witnessed in FMCG and Healthcare sector stocks. The market breadth on BSE was positive, out of 2311 stocks traded, 1574 stocks advanced, while 676 stocks declined on the BSE.

The BSE Sensex is currently trading at 24,366.89 up by 149.55 points or 0.62% after trading in a range of 24388.15 and 24270.20. 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 1.32%, while Small cap index was up by 1.43%.

The gaining sectoral indices on the BSE were Capital Goods up by 4.26%, India Infrastructure Index up by 1.66%, PSU up by 1.38%, Power up by 1.34% and Realty up by 1.16%. While, FMCG down by 0.84% and Healthcare down by 0.43% were the losing indices on BSE.   

The top gainers on the Sensex were L&T up by 5.56%, Bharti Airtel up by 2.62%, BHEL up by 2.52%, Gail India up by 1.98% and Hindalco up by 1.76%. On the flip side, NTPC down by 1.56%, Mahindra & Mahindra down by 1.24%, ITC down by 1.23%, TCS down by 1.08% and Sun Pharma down by 0.99%.

Meanwhile, in clear indications that the BJP government will carry forward reforms initiated during previous Congress regime, diesel prices were hiked by 50 paise a litre, excluding state levies, the second increase in rates in three weeks. Diesel price in Delhi will be hiked by 57 paise after including taxes, to Rs 57.28 per litre, while it will cost Rs 65.84 a litre in Mumbai as against Rs 65.21 at present.

The monthly hike in price came after several rounds of discussions that the new Oil Minister Dharmendra Pradhan held with state-owned oil firms on continuing with the reform initiated by the UPA government, which in 2013 decided raise diesel prices in small doses of up to 50 paise every month till such time that the subsidy on fuel consumed is wiped out.

Before the latest increase, diesel prices had risen by a cumulative Rs 9.55 a litre in 15 installments since January 2013, with the previous hike being the one on May 13, when rates went up by Rs 1.09 a litre, excluding local levies. Despite the latest hike, under recovery (loss) on retail diesel shall stand at Rs 2.80/litre.

Further, amid criticism of the diesel price hike, oil minister Dharmendra Pradhan has indicated that not increasing the diesel price could have hit investors sentiments and the government at this point of time does not want to take any step which will send a negative signal to the investors-both domestic and international. The minister underscored that he welcomes diverse political views and diverse view points are good for a democracy.

The CNX Nifty is currently trading at 7,276.85 up by 46.90 points or 0.65% after trading in a range of 7,279.95 and 7,239.50. There were 34 stocks advancing against 16 declining on the index.

The top gainers of the Nifty were L&T up by 5.85%, Jindal Steel up by 3.88%, NMDC up by 3.35%, BPCL up by 3.17% and Power Grid up by 2.83%. On the flip side, NTPC down by 2.09%, M&M down by 1.53%, Sun Pharma down by 1.50%, Hindustan Unilever down by 1.43% and ITC down by 1.39% were the top losers on the index.

Most of the Asian equity indices were trading in green; Nikkei 225 surged 2.05%, Straits Times increased by 0.01% and Seoul Composite was up by 0.24%. On the flip side, Jakarta Composite slipped 0.32% and KLSE Composite was down by 0.60%. Meanwhile, Taiwan, China and Hong Kong markets remained shut for the trade today for the Dragon Boat Festival.