Benchmarks extend gains; trade near intra-day high levels

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high levels on the back of across-the-board buying by funds and retail investors on hopes that the reform measures in next week’s Union Budget will boost India’s economic growth. Firm global cues coupled with the appreciation in rupee value against the dollar too added to the optimistic sentiments. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 182.55 crore on June 27, 2014. However, a delayed monsoon has led to many a worried face this year and investors fear this might cause a drop in agricultural output and push prices. At present, Sensex and Nifty were trading above the crucial 25,350 and 7,550 levels respectively, with gains of over 1%.  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 1.15%. In scrip specific development, ONGC rose as its board has approved the proposal for redevelopment of its giant offshore field - Mumbai High (North) - involving a capital investment of Rs 5,706.47 crore. Further, shares of Cipla surged after the company signed agreement to acquire 51% stake in a pharmaceuticals manufacturing and distribution business in Yemen for $21 million. Shares of Inox Leisure were trading higher after reports that the company is in talks to buy Satyam Cineplexes in a transaction that may be valued at Rs.220 crore.

On global front, Asian markets have mostly made a green start with some of the indices approaching their biggest quarterly advance on decline in crude prices. Moreover, US stocks ended modestly higher on last Friday, led by technology shares, though downbeat second-quarter and full-year forecasts from DuPont, kept a lid on gains. Back home, all the sectoral indices on the BSE were trading in the green with Oil and gas index was the top gainer up by over 1.95% followed by auto and banking indices both up by over 1.80%. Meanwhile Hindustan Unilever, ICICI Bank, Punjab National Bank, IDBI Bank, Central Bank of India, UCO Bank, Rallies India and Gammon India will be in focus on account of annual shareholders’ meetings on June 30, 2014.

The BSE Sensex is currently trading at 25388.67 up by 288.75 points or 1.15% after trading in a range of 25398.28 and 25179.55. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.30%, while Small cap index was up by 1.18%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.96%, Power up by 1.90%, Banking up by 1.89%, PSU up by 1.81% and Realty up by 1.45%, while there was no loser on the sectoral index.

The top gainers on the Sensex were Tata Power up by 2.41%, SBI up by 2.30%, ICICI Bank up by 2.11%, Sun Pharma up by 2.07% and L&T up by 2.02%. On the flip side, TCS down by 0.06% was the lone loser on the Sensex.

Meanwhile, according to the Business Outlook Survey by the Confederation of Indian Industry (CII), the Indian industry is upbeat on its growth prospects after the new government took charge at the Centre. Most of the respondents are upbeat about their businesses in the first quarter of 2014-15 than the previous quarter.

The CII Business Confidence Index (CII-BCI) for the April-June quarter of 2014-15 rose from 49.9 in the Q4 FY14 to 53.7 points in Q1FY15, above 50 mark that separates strong business sentiments from weak. CII’s survey is based on responses from over 150 industry members and around 54 percent of the respondents were from the manufacturing sector while 45 percent were from services.

The survey found that most businesses, besides increasing new investment, have started experiencing a rise in capacity utilisation, which augurs well for turnaround of the economy. Around 56 percent of the respondents expect their sales and new orders to increase in the first quarter of 2014-15 is much higher than the previous quarter wherein only around 35 percent respondents expected a rise in sales.

The CII Director-General Chandrajit Banerjee stated that business sentiments got a boost amid expectations that a stable government at the Centre would bring growth back to India along with a mild upturn in some economic indicators in the form of decline in twin deficits, recovery in exports, buoyant foreign capital inflows, strengthening rupee and moderating inflation. C Banerjee expects that index to gather momentum in the coming days, riding on improved business confidence.

The CNX Nifty is currently trading at 7,594.40 up by 85.60 points or 1.14% after trading in a range of 7,597.40 and 7,531.60. There were 48 stocks advancing against 2 declining on the index.

The top gainers of the Nifty were Bank of Baroda up by 3.36%, PNB up by 3%, BPCL up by 2.77%, Tata Power up by 2.50% and SBI up by 2.27%. On the flip side, MCDOWELL-N down by 4.17% and Maruti Suzuki down by 0.10% were the only losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 up by 0.31%, Hang Seng improved 0.15%, KOSPI Index strengthened by 0.34%, Jakarta Composite soared 0.24%, Shanghai Composite gained 0.65% and Taiwan Weighted was up by 0.79%. On the flip side, Straits Times slipped 0.35% and FTSE Bursa Malaysia KLCI was down by 0.02%.