Strong trade continues in markets; Nifty above 7,500 mark

After getting a gap-up start, benchmark equity indices continue to trade in fine fettle in late morning deals on continued FII inflows on hopes that the new government will take steps to revive the economy. Foreign institutional investors bought shares worth a net Rs 1,368.97 crore on Thursday. Moreover, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Oil and gas stocks gained reacting to reports that the oil ministry may consult the Prime Minister’s Office for raising prices of liquefied petroleum gas and kerosene. Shares of sugar companies were trading higher after reports that government is planning to increase export subsidy.

In scrip specific development, shares of Infosys fell as much as 2% after Prasad Thrikutam, global head of strategic sales, marketing and alliances and one of the highest paid executives at the company has resigned. On the other hand, Idea Cellular has surged after opening a QIP issue through which it will offer equity shares worth Rs 3,000 crore. Moreover, Yes Bank rose after the bank said that its Capital Raising Committee approved the issue and allotment of 5.34 crore equity shares to eligible qualified institutional buyers at an issue price of Rs 550 per share. On the global front, Asian markets turned mixed as investors offered only polite applause for the European Central Bank's latest stimulus package.  US stocks rose on Thursday after the European Central Bank cut rates to record lows and pledged to do more if needed to fight off the risk of deflation.

Back home, the gains in oil & gas, realty and PSU stocks provided strength to the major indices. Buying activity also gathered momentum in stocks of mid and small-cap indices were trading up by over 1 percent. However, selling in IT and Teck sector stocks limited the upside. Metal stocks witnessed profit booking after the recent gains. The market breadth on BSE was positive, out of 2471 stocks traded, 1768 stocks advanced, while 615 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,182.98 up by 163.47 points or 0.65% after trading in a range of 25,258.98 and 25,153.92. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.25%, while Small cap index up by 1.52%.

The gaining sectoral indices on the BSE were Oil & Gas up by 4.28%, Realty up by 4.10%, PSU up by 2.54%, Infrastructure up by 1.49% and Healthcare up by 0.90%. On the flip side, IT down by 1.41%, Teck down by 0.86% and Metal down by 0.61% were the losing indices on BSE.   

The top gainers on the Sensex were ONGC up by 7.39%, Gail India up by 4.07%, RIL up by 3.36%, Hero MotoCorp up by 1.92% and Tata Power up by 1.64%. On the flip side, SSLT down by 2.62%, Infosys down by 2.04%, Hindalco down by 1.95%, TCS down by 1.79% and Wipro down by 0.61%.

Meanwhile, According to the Federation of Indian Export Organization (FIEO), India's exports are likely to touch $360 billion in the current fiscal from $312.35 billion in 2013-14. However, the FIEO President Rafeeq Ahmed said that to touch $360 billion exports mark, the new government will have to take various measures further.

The FIEO President also suggested the Commerce Ministry to fix export target for five years instead of annual target. India’s exports may reach at $750 billion after five years, though there is an urgent need to improve infrastructure and resolve issues related to revenue. FIEO has also stated that India’s export growth can come from the neighboring countries and any improvement in relationship with Pakistan will help boost the country’s exports.

During the financial year 2014, India’s exports touched $312.35 billion, a 3.98% growth over the previous fiscal year, but remained below the set exports target at $325 billion. India's share in global trade stands at about 2 percent. In India, Foreign Trade Policy (FTP) governs all exports and imports related activities and mainly aims at enhancing the country's exports. Over the last three fiscal years, India’s export has been hovering near $300 billion and it has become imperative to boost country’s exports and enhance its contribution in the world trade. 

The five-year FTP (2009-14) ended on March 31 and the new government formed after the general election will introduce new FTP for the period 2014-19 in June 2014. Meanwhile, new FTP is likely to promote exports of specific products in specific geographies and would also abolish conventional method of exports by focusing more on areas like branding of products in the global markets, exports of services and hi-tech products and new strategy for marketing.

The CNX Nifty is currently trading at 7,510.40 up by 36.30 points or 0.49% after trading in a range of 7,535.10 and 7,506.85. There were 30 stocks advancing against 20 declining on the index.

The top gainers of the Nifty were ONGC up by 7.48%, GAIL up by 4.39%, DLF up by 3.89%, BPCL up by 3.31% and Reliance Industries up by 3.11%. On the flip side, SSLT down by 2.75%, Infosy down by 2.19%, Hindalco down by 2.09%, TCS down by 1.77% and Jindal Steel down by 0.85% were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite dropped 0.78%, Hang Seng declined by 0.27%, KLSE Composite slipped 0.15%, Seoul Composite contracted 0.65% and Taiwan Weighted was down by 0.12%. On the flip side, Jakarta Composite strengthened 0.34%, Nikkei 225 up by 0.02% and Straits Times was up by 0.50%.