Markets continue to trade firm in afternoon session

Indian equity benchmarks continued to trade firm in afternoon session amid firm global cues and buying witnessed in frontline blue chip stocks such as Coal India, Bajaj Auto and L&T among others. Consistent buying from the foreign institutional investors (FIIs) and optimism about reforms oriented decisions by the new government has encouraged the major indices to extend their gains. Almost all the sectoral indices on the BSE were trading in green, while a mild weakness in the oil and gas sector was visible on account of profit booking by traders after the recent gains. Sentiments got a boost after Minister of Commerce Nirmala Sitharaman’s statement that the rising Current Account Deficit (CAD) and inflation are the issues which will be tackled on an urgent basis by the government. Investors’ sentiments also got some support as foreign inflows into the country increased by 8 percent to $24.29 in the FY14 form $22.42 billion recorded in the FY13. Realty was the top gaining index up by around 3.33% followed by metal and capital goods indices both trading up by over 2.40%. Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices were trading up by over 1.20%.     

Hindustan Zinc was trading higher by around 4% to Rs 180 after the Finance Ministry has started the process for fresh valuation of the company, seeking to push through a long-pending sale of the government's residual stake in the company. Nectar Lifesciences has rallied around 16% to Rs 33.75 amid reports that the promoters of the pharmaceutical company are planning to sell their entire stake in the company. IDBI Bank was trading higher by 4% to Rs 116 after state-owned bank said that its board has cleared a proposal to raise as much as Rs 4,000 crore either through qualified institutional placement (QIP) or a follow-on equity issue.

On global front, Asian equity indices were trading in green with Shanghai Composite up by 0.03% and Hang Seng up by 0.58%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,600 and 25,500 levels respectively. The market breadth on BSE was positive, out of 2,757 stocks traded, 2,077 stocks advanced, while 604 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,604.41 up by 207.95 points or 0.82% after trading in a range of 25,625.72 and 25,496.84. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading up; the BSE Mid cap index was up by 1.26%, while Small cap index up by 1.74%.

The gaining sectoral indices on the BSE were Realty up by 3.33%, Metal up by 2.56%, Capital Goods up by 2.41%, Infrastructure index up by 2.18% and Power up by 1.76%. While, Oil and Gas down by 0.54% was the only losing index on BSE.   

The top gainers on the Sensex were Coal India up by 4.60%, L&T up by 3.34%, Bajaj Auto up by 2.35%, Tata Steel up by 2.28% and Tata Power up by 2.21%. On the flip side, ONGC down by 2.54%, HUL down by 0.69%, M&M down by 0.66%, Infosys down by 0.17% and NTPC down by 0.15% were the top losers on the BSE.

Meanwhile, As per the Central Electricity Authority (CEA), India is likely to witness a power shortage of 5.1 percent compared to demand in the current financial year, with southern and north-eastern regions expected to witness high deficits. In its annual Load Generation Balance Report, the CEA highlighted that the peak power shortfall in southern region would be 12.7 percent, north eastern region (17.4 percent), eastern region (3.4 percent) and northern region (3.1 percent).

The CEA’s report stated that a power generation capacity of 17,800 MW comprising 14,958 MW of thermal, 842 MW of hydro and 2,000 MW of nuclear power stations would be installed in the country during the FY15. Further, the planning body for the power sector projected that gross energy generation in the country would be around 1,023 billion units from the power plants in operation and projects expected to be commissioned during this period.

In India, electricity is produced with the help of coal, crude oil, water and natural gas. The Indian power sector is the fifth largest and one of the most diversified sectors in the world with an installed capacity of around 230 GW, out of which coal-fired plants account for about 68 percent of India's installed electricity capacity. While, gas based installed capacity stands at nearly 8 percent at around 20 GW. In spite of large power capacity addition over the past six years, the country has been witnessing peak hour power deficit at around 3-5 percent due to high demand.

Industrial production is likely to fall by 40 percent during June-July’ 2014 due to frequent power outages in north Indian states that are also coping with severe heat wave.  Acute fuels shortage particularly coal in the country has also become primary reason for power deficit in the country, forcing the domestic power manufactures to operate at low capacity.

The CNX Nifty is currently trading at 7,658.05 up by 74.65 points or 0.98% after trading in a range of 7,666.60 and 7,580.25. There were 40 stocks advancing against 10 declining on the index.

The top gainers of the Nifty were Grasim up by 8.75%, Power Grid up by 5.62%, Ultra Tech Cement up by 5.09%, Ambuja Cement up by 4.76% and ACC up by 4.64%. On the flip side, ONGC down by 2.94%, BPCL down by 1.15%, M&M down by 0.97%, HUL down by 0.95% and Infosys down by 0.46% were the major losers on the index.

Asian equity indices were trading in green; Taiwan Weighted up by 0.31% to 9,162.74, Shanghai Composite up by 0.03% to 2,030.76, Hang Seng up by 0.58% to 23,058.34, Straits Times up by 0.10% to 3,302.48 and Nikkei up by 0.32% to 15,126 . While, Jakarta Stock Index down by 0.57% to 4,909.09