Benchmarks extend gains; trade near intra-day high level

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high level amid a rally in Realty, Metal and Consumer Durables stocks. Sentiments remained bullish on comments by RBI Governor Raghuram Rajan that India is better prepared to deal with any fallout from the ongoing Iraq crisis. Sentiment on the street also got some support from report that foreign institutional investors (FIIs) bought shares worth a net Rs 48.02 crore on June 17, 2014. However, weak trend in Asian stocks coupled with depreciation in rupee value have limited the gains. At present, Sensex and Nifty were trading above the crucial 25,550 and 7,650 levels respectively, with gains of over 0.25%. Apart from blue chips, broader indices too equally participated in the gain with both mid cap and small cap indices trading up by over 0.90%.

In scrip specific development, Cipla surged after the company announced that it has acquired around 60% stake in a Sri Lankan company for $14 million via its wholly-owned arm to market its products in that country. Moreover, Essar Shipping was trading at Rs 26.50, up 5% from its previous close after Leman Diversified bought 1.9 million shares of the company. On the other hand, United Spirits was trading down by 2.72%, as the company raised concerns on Tuesday over its accounting of items related to debtors and a loan given to its promoter UB Group.

On global front, most of the Asian equity indices were trading in red as investors await the Federal Reserve monetary policy decision scheduled to be released later in the day. However, US stocks had ended higher on Monday, led by a flurry of merger news, but the advance was limited as investors kept a close watch on rising oil prices caused by turmoil in Iraq. Back home, stocks from Realty, Metal and PSU counters were supporting the markets’ uptrend, while those from Information Technology and FMCG counters were adding to the underlying cautious undertone. The market breadth on BSE was positive, out of 2333 stocks traded, 1562 stocks advanced, while 687 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,586.09 up by 64.90 points or 0.25% after trading in a range of 25592.58 and 25490.56. 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 0.98%, while Small cap index gained 1.11%.

The gaining sectoral indices on the BSE were Realty up by 1.40%, Metal up by 1.29%, PSU up by 1.21%, India Infrastructure Index up by 1.20% and Consumer Durables up by 1.19%. On the flip side, IT down by 0.23% and FMCG down by 0.07% were the only losers on the sectoral index.

The top gainers on the Sensex were Cipla up by 5.85%, Hindalco up by 2.98%, GAIL up by 1.86%, SSLT up by 1.83% and ONGC up by 1.82%. On the flip side, TCS down by 0.99%, Wipro down by 0.79%, ITC down by 0.61%, HDFC Bank down by 0.57% and Sun Pharma down by 0.51% were the top losers on the Sensex.

Meanwhile, in wake of rising retail prices, the government is considering steps to discourage exports of milk products, by withdrawing export incentives currently in force. Among others, government provides incentives on exports on skimmed milk products under Vishesh Krishi and Gram Udyog Yojana (VKGUY).

The issue was deliberated during the high-level meeting convened by Finance Minister Arun Jaitley to discuss issues related to inflation and price rise of essential commodities. Jaitley in the meeting underscored that government was monitoring prices of 22 commodities and a price increase in 4-5 commodities had been noticed, including that of milk among others.

Recently, all major milk producers, including Mother Dairy and Amul, raising milk prices by Rs 2 per litre across all variants due to increase in procurement costs, lifted annual retail inflation in milk and its products in May at 11.28%. Meanwhile, milk production in India, the world's largest producer and consumer, stood at 132.4 million tonnes 2012-13, as per National Dairy Development Board (NDDB) data. It is estimated to have increased by 6 per cent to about 140 million tonnes in 2013-14 fiscal.

In the high-level meeting, which was also attended by Food Minister Ramvilas Paswan, Jaitley outlined some of the key steps the government would take to check the food price rise, which includes, export restrictions on potato and onion, Removal of curbs on sale of fruits and vegetables, additional supply of rice, import of pulses and edible oil among others.

The CNX Nifty is currently trading at 7,656.05 up by 24.35 points or 0.32% after trading in a range of 7,657.95 and 7,620.25. There were 36 stocks advancing against 14 declining on the index.

The top gainers of the Nifty were Cipla up by 5.76%, Kotak Mahindra Bank up by 3.28%, Hindalco up by 3.10%, SSLT up by 2.12% and Gail up by 1.78%. On the flip side, TCS down by 1.09%, Wipro down by 0.73%, Sun Pharma down by 0.72%, ICICI Bank down by 0.61% and HCL Tech down by 0.58% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng decreased by 0.08%, KOSPI Index slipped 0.67%, Jakarta Composite declined 0.28%, Shanghai Composite tumbled by 0.37% and FTSE Bursa Malaysia KLCI was down by 0.09%. On the flip side, Nikkei 225 spurted by 0.87% and Straits Times was up by 0.12%.