Markets pare gains on profit-booking; Nifty holds above 7600 level

Local equity markets though came off day’s high, but were trading near life time high levels, on account of profit-booking which was witnessed at higher levels. Markets soared to day’s high after President Pranab Mukherjee unveiled new government’s economic reforms agenda, which included introducing a general sales tax, encouraging foreign investment and speeding approvals for major business projects, but bourses halved their gains soon on profit-booking by market-participants. Paring gains, both Sensex and Nifty were holding above the crucial 25,500 and 7600 levels, with gains of close to half a percent. Meanwhile, broader indices outdoing their larger peers were trading with gains of over a percent.

On the global front, Asian pacific shares looked set for positive close of Monday after stronger first quarter growth in Japan added to positive sentiment from solid hiring in the US The revised data showed the world's No. 3 economy in better shape to withstand the drop in consumer demand that followed a 3 percentage point hike in sales tax on April 1. Additionally, European shares inched higher at the open on Monday, building on last week's rally and tracking gains on Wall Street and in Asia in the wake of reassuring U.S. jobs data.

Closer home all the sectoral indices on BSE were supporting the uptrend of the markets, barring stocks from Oil & Gas counters, which was the only losing index. On the flip side, stocks from Realty, Capital Goods and Metal counters were the prominent gainers of the index. In non-sectoral activity, fertilizer stocks, RCF, Chambal fertilizers and Tata Chemicals were on investor’s radar after reports suggested of Government planning urea price hike to curb fertiliser subsidies. Additionally, Railway stocks were witnessing strong demand with most of them locked in upper circuit after President Pranab Mukherjee in his address to the Joint Session of Parliament said that the government will launch a diamond quadrilateral project of high-speed trains. The overall market breath on BSE was in the favour of advances which thumped declines in the ratio of 2066:794; while 88 shares remained unchanged.

The BSE Sensex is currently trading at 25516.5, up by 119.99 points or 0.47% after trading in a range of 25496.8 and 25644.8. 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 0.79%, while Small cap index was up by 1.25%.   

The gaining sectoral indices on the BSE were Realty up by 3.15%, Capital Goods up by 2.13%, Metal up by 2.00%, Consumer Durables up by 1.68%, India Infrastructure Index up by 1.41%. On the flip side,Oil & Gas down by 1.12% was the only losing index on BSE.   

The top gainers on the Sensex were Coal India up by 4.39%, L&T up by 3.33%, Bajaj Auto up by 2.72%, Tata Steel up by 2.37% and Tata Power. On the flip side, ONGC down by 3.07%, Mahindra & Mahindra down by 1.48%, SBI down by 0.8%, NTPC down by 0.63% and Infosys down by 0.59% were the top losers.   

Meanwhile, concerned over the rising trade deficit with China, Prime Minister Narendra Modi has stated that India need to focus on imparting skills to its young population, expand the scale of projects it undertook and improve the speed of execution in order to compete with China. India’s trade deficit with China averaged at around $35 billion during the past three years. During January-April’ 2014, the total volume between China and India amounted to $ 21.98 billion out of which India exported $6.57 billion and imported $15.41 billion, representing a trade deficit of $8.84 billion.

Emphasizing the need to focus more on skill, scale and speed, Prime Minister has said that it has become imperative to take benefit of country’s favorable demography, as 65 percent of population was below 35 years of age. By adding further, Narendra Modi said that skill development such as teaching, nursing and paramedics need to be a priority area and good teachers are one of the biggest needs of society. Further, universities should be actively involved in research and analysis of the developmental process, to contribute significantly for policy-related decisions.

Narendra Modi cited the three colours of the national flag to express views on the development of key sectors for overall economic growth of the country. Beginning with green, Prime Minister said that India needs to bring about a second green revolution focusing on increased agro-productivity, agro technology, value addition and decentralization of warehousing. Further, a white revolution must focus on increasing milk productivity and developing a support system for ensuring cattle health. While, the saffron colour represents energy and India needs a saffron revolution which will focus on renewable energy sources such as solar energy to meet India's growing energy demand.  Prime Minister further added that in infrastructure the focus needs to shift from highways to i-ways and optical fibre networks.

The CNX Nifty is currently trading at 7629.90, up by 46.5 points or 0.61% after trading in a range of 7580.25 and 7669.75. There were 32 stocks advancing against 18 stocks declining on the index.   

 The top gainers on Nifty were Grasim up by 8.67%, Power Grid up by 6.36%, Ultra Cement up by 4.77%, Coal India up by 4.58% and ACC up by 4.52%. On the flip side, ONGC down by 3.40%, BPCL down by 2.63%, M&M down by 1.96%, SBI down by 1.12% were the top losers.   

Asian equity indices were trading in green; Taiwan Weighted up by 0.31%, Shanghai Composite up by 0.01%, Hang Seng up by 0.58%, Straits Times up by 0.08% and Nikkei up by 0.32% to 15,126 . While, Jakarta Stock Index down by 0.57% was the only loser on the index.

European markets got off to a positive start; with Germany’s DAX rising by 0.40%, France’s CAC 40 adding 0.71% and United Kingdom’s FTSE 100 surging 0.66%.