Benchmarks trade jubilantly on firm global cues

Extending their previous session’s northward journey, Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals on Monday with frontline gauges surpassing their crucial 25,300 (Sensex) and 7,550 (Nifty) bastions on the back of strong global cues. The US markets ended higher in last session supported by a late rally but there was cautiousness on uncertainty about the near-term outlook for the markets even though the consumer sentiment improved in the month of June. The Asian markets were trading mostly in the green at this point of time with some of the indices approaching their biggest quarterly advance on decline in crude prices, though the Japanese market was marginally in red as yen strengthened.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Moreover, the market is banking on start of an investment cycle and government action. It has been reported that in budget the new government may enhance the Plan expenditure for 2014-15 by around Rs 11,000 crore in the Budget next month, which would be about 2 per cent higher than what was provided in the previous fiscal’s budget.

Meanwhile, none of the sectoral indices were trading in the red, while capital goods and banking witnessed the maximum gain in trade. PSU, power, consumer durables, metal, infrastructure, realty and healthcare too were trading significantly. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1459 shares on the gaining side against 455 shares on the losing side while 61 shares remain unchanged.

The BSE Sensex opened at 25179.55; around 80 point higher compared to its previous closing of 25099.92, and has touched a high and a low of 25374.03 and 25179.55 respectively. The index is currently trading at 25367.66, up by 267.74 points or 1.07%. There were 28 stocks advancing against just 2 declines on the index.

The overall market breadth has made a strong start with 73.87% stocks advancing against 23.04% declines. The broader indices too were trading in the green; the BSE Mid cap and Small cap indices up by 1.18% and 0.94% respectively. 

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.83%, Banking up by 1.77%, PSU up by 1.72%, Power up by 1.58% and Consumer Durables up by 1.37%, while there was no loser on the sectoral index.

The top gainers on the Sensex were SBI up by 2.16%, L&T up by 2.02%, ICICI Bank up by 1.90%, HDFC up by 1.78% and ONGC up by 1.78%. On the flip side, TCS was down by 0.60% and M&M was down by 0.03% were the top losers on the Sensex.

Meanwhile, highlighting agriculture as a critical sector for India's economy, Industry body Assocham has suggested a slew of short- and long-term measures to provide impetus to agriculture sector.  Industry body has stated that sector has the potential to take India’s gross domestic product (GDP) to 8% and create millions of jobs in rural areas. Besides, the sector’s growth would create a surge in consumption-based demand in India, giving the manufacturing and services sectors a boost as well. Agricultural sector, which comprises around 15% of the GDP, expanded at 4.7% in the reported fiscal year as compared to the marginal growth at 1.4% in the FY13.

Assocham suggested the government to adopt an enabling policy environment, modern technology and boost supply-chain efficiency to address food inflation, encourage investment-led growth and ensure food security. In order to enhance supply chain efficiencies, the Agricultural Produce Market Committee (APMC) Act should be implemented in all states.  Further, there is need to replace direct cash transfers and investment subsidies, input-based subsidies to farmers with low-cost credit and linking the MGNREGA to agriculture for asset creation.

Industry Chamber also urged the government to develop effective communication systems between farmers and laboratories by setting up broadband connections and regional Kisan TV channels. Better communication system will help to disseminate real time data along with adoption of a scientific approach to roll out biotechnology applications for better yield and nutrition. Assocham also suggested permitting 100 percent foreign direct investment (FDI) in food processing.

Assocham also recommended the government to take measure for encouraging high value agriculture like horticulture, floriculture, fisheries, poultry and dairy which in turn will enhance job creation in the country. It also suggested that agri-exports be revamped through consistent and stable trade policies and focus on integrated food processing clusters for high-value exports.

The CNX Nifty opened at 7,534.05; about 26 points higher as compared to its previous closing of 7,508.80, and has touched a high and a low of 7,587.15 and 7,531.60 respectively. The index is currently trading at 7,586.00, up by 77.20 points or 1.03%. There were 47 stocks advancing against 3 declines on the index.

The top gainers of the Nifty were BPCL up by 3.26%, Bank of Baroda up by 2.68%, PNB up by 2.57%, SBI up by 2.04% and Tata Power up by 1.93%. On the flip side, MCDOWELL-N down by 3.23%, TCS down by 0.64% and M&M down by 0.13% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 spurted by 28.12 points or 0.19% to 15,123.12, Hang Seng improved 55.03 points or 0.24% to 23,276.55, KOSPI Index strengthened by 7.32 points or 0.37% to 1,995.83, Jakarta Composite soared 13.90 points or 0.29% to 4,859.03, Shanghai Composite gained 13.66 points or 0.67% to 2,050.07 and Taiwan Weighted was up by 74.90 points or 0.80% to 9,381.73.

On the flip side, Straits Times slipped 10.53 points or 0.32% to 3,260.52 and FTSE Bursa Malaysia KLCI was down by 0.61 points or 0.03% to 1,880.32.