Benchmarks continue to trade in green in late morning session

Local equity markets, after paring some gains in early deals, have regained some momentum on persistent bargain buying activities by funds and retail investors, as the factory output growth rebounded to 13-month high of 3.4% in April and retail inflation eased to 8.23% in May on account of falling prices of essential food items. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 652.35 crore on June 12, 2014. However, a weak trend on other Asian bourses on concerns about the growing crisis in Iraq and overnight losses in the US markets, capped the gains. At present, benchmark equity indices have eked out modest profit of close to two tenth of a percent and trading past the crucial 25,600 (Sensex) and 7,650 (Nifty) levels respectively. Broader indices, Midcap and Small-cap outperforming larger peers were trading higher over half a percent. Meanwhile, IT stocks such as Infosys, TCS and Wipro were down 1-2 percent, weighed down by disappointing retail sales and jobless claims data out of the United States, while State oil refiners were trading down after rising crude oil scaled nine-month highs, as escalating civil war in Iraq hit risk appetite.

In scrip specific development, Edelweiss Financial Services was trading higher by 6%, extending its previous day’s 10% rally after Rakesh Jhunjhunwala bought a 1.3% stake in financial services firm through open market transaction. Central Bank of India gained after its board approved a proposal to raise additional equity capital. On the other hand, Tata Motors declined after the company reported a 5.14% drop in its global wholesales in May 2014 over May 2013.

On the global front, Most of the Asian equity indices were trading in the red at this point of time. Moreover, Wall Street indices too ended lower after US economic data painted a mixed picture and Brent crude prices rose on escalating violence in Iraq after Kurdish forces took control of the Iraqi oil city of Kirkuk. Back home, stocks from Realty, Capital Goods and Consumer Durables counters were supporting the markets’ uptrend, while those from Information Technology, FMCG and Oil & Gas counters were adding to the underlying cautious undertone. The market breadth on BSE was positive, out of 2421 stocks traded, 1432 stocks advanced, while 919 stocks declined on the BSE.

The BSE Sensex is currently trading at 25624.27 up by 48.06 points or 0.19% after trading in a range of 25688.31 and 25570.04. There were 13 stocks advancing against 17 declining ones on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.61%, while Small cap index gained 0.71%.

The top gaining sectoral indices on the BSE were, Realty up by 1.40%, Capital Goods up by 1.07%, Consumer Durables up by 1.01%, Power up by 0.92% and Bankex up by 0.60% while IT down by 0.38%, TECk down by 0.35%, FMCG down by 0.29% and Oil and Gas down by 0.05% was the few losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 2.52%, M&M up by 1.84%, Coal India up by 1.81%, HDFC Bank up by 1.48% and L&T up by 1.10%. On the flip side, TCS was down by 1.96%, Hindalco was down by 1.57%, Bharti Airtel was down by 0.91%, Axis Bank was down by 0.90% and Wipro was down by 0.57% were the top losers on the Sensex.

Meanwhile, in line with government’s ambitious plan of supplying 24x7 power in country, railways has stepped up efforts to expedite rail connectivity projects for smooth coal movement required for power generation. Railway Minister Sadananda Gowda held a meeting with Coal and Power Minister Piyush Goyal and decided to accelerate execution of three rail lines key to transport 100 million tonnes of coal per year from remote mines located in Chhattisgarh, Jharkhand and Odisha.

Railway Ministry has committed to complete three crucial rail link projects by 2016 and has given instructions to concerned officers to comply with timelines for construction of these lines. These projects are Tori-Shivpur (44 kms) Shivpur-Kathautia (53 kms) railway line in North Karanpura in Jharkhand, Jharsuguda-Barpalli-Sardega railway line (53 kms) in Lb Valley, Odisha and Bhupdevpuir-Korichapan-Dharamjaigarh (180 kms) in Mand-Raigarh coalfield, Chhattisgarh. Though, the railway started work on some of these lines nearly a decade ago, the delay in land acquisition, environmental clearance and poor coordination between state and central governments have hampered these projects’ progress.

Coal-fired plants account for around 68% of India's total installed electricity capacity. Acute coal shortage in the country has become primary reason for power deficit in the country leading to frequent blackouts in north India including Delhi. Further, India’s gas based installed power capacity stands at nearly 8 percent at 20,000 MW of which around 6,000 MW is currently stranded because of unavailability of natural gas.

The CNX Nifty is currently trading at 7,663.10 up by 13.20 points or 0.17% after trading in a range of 7,678.50 and 7,643.40. There were 26 stocks advancing against 24 declining on the index.

The top gainers of the Nifty were BHEL up by 2.85%, Ambuja Cement up by 2.57%, UltraTech Cement up by 1.96%, Coal India up by 1.80% and Cairn up by 1.76%. On the flip side, BPCL down by 2.87%, TCS down by 1.94%, Hindalco down by 1.92%, United Spirits down by 1.30% and Bharti Airtel down by 0.99% were the major losers on the index.

Asian equity indices were trading mostly in the red; Nikkei 225 tumbled by 0.34%, KOSPI Index declined 1.17%, Straits Times was lower by 0.02% and Jakarta Composite 0.20%. On the flip side, Hang Seng soared 0.28%, FTSE Bursa Malaysia KLCI was up by 0.01%, and Shanghai Composite was up by 0.96%.