Benchmarks continue firm trade; Power, Capital Goods pull

Indian equity benchmarks continued their firm trade in the late afternoon session on account of buying in frontline counters and firm cues from global counterparts. The sentiments were on optimistic mood from the early trade after the Business Outlook Survey by the Confederation of Indian Industry (CII), reported that the Indian industry is upbeat on its growth prospects after the new government took charge at the centre. Traders were seen piling up positions in Power, Capital Goods and PSU sector stocks. In scrip specific development, Dr. Reddy’s Laboratories was trading in green after foreign brokerage firm remain overweight on the pharma major with an upward target price. Housing Development & Infrastructure was trading in green after foreign brokerage firm bought shares in the company.

On the global front, the Asian markets were trading mostly in green, while the European markets traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,550 and 25,300 levels respectively. The market breadth on BSE was positive in the ratio of 1962:896 while 129 scrips remained unchanged.

The BSE Sensex is currently trading at 25375.98, up by 276.06 points or 1.10% after trading in a range of 25406.98 and 25179.55. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.62%, while Small cap index was up by 1.52%.

The gaining sectoral indices on the BSE were Power up by 2.46%, Capital Goods up by 2.22%, PSU up by 2.12%, Bankex up by 1.99% and India Infrastructure Index up by 1.85% while there were no losers.

The top gainers on the Sensex were Tata Power up by 3.61%, ICICI Bank up by 2.93%, Sun Pharma up by 2.78%, L&T up by 2.45% and SBI up by 2.17%. On the flip side, RIL down by 0.84%, Mahindra & Mahindra down by 0.44% and Hero Motocorp down by 0.28% were the only losers on the BSE.

Meanwhile, Steel Ministry has stated that country’s eastern region will witness large steel production capacity expansion in future with an investment of nearly Rs 9 lakh crore which will push India's steel capacity by an additional 160 million tonnes per annum (mtpa) capacity in the next 10-15 years.

As per the steel ministry estimates, 16 new steel plants are set to come up in mineral-rich eastern states adding 42 mtpa new capacity in coming five years, another 45 mtpa in next five years and further 73 mtpa in about 15 years from now. State wise, 6 new plants are likely to come up in Odisha, 5 in Jharkhand, 4 in Chhattisgarh and one in West Bengal with a cumulative investment of Rs 8.92 lakh crore investments till 2030. A majority of the steel plants are located in the country’s eastern part mainly because of its rich raw material base and locational advantages.

India is world fourth largest steel maker behind China, Japan and the US with 100 mtpa steel production capacity now, up from 75 mtpa four years ago. The ministry has excluded confidence that India has potential to become a global leader both in production and consumption of steel. With Rs 12 lakh crore investment, including Rs 8.92 lakh crore in the eastern region could enhance the country’s total steel production to 300 MT by 2030.  Describing steel as an engine of growth, steel ministry has also pitched for infrastructure status for steel sector and sought for indigenization of design, manufacturing and erection of plants.

Ministry also highlighted the key concerns that are impeding growth such as decline in iron ore production, low priority in coal and gas allocation, delay in statutory clearances and infrastructure bottlenecks. Over the past four years, India’s steel production remained static at 81.2 MT in 2013, 77.3 MT 2012, 73.6 MT in 2011 and 69 MT in 2010 owing to the prevailing economic slowdown impacting domestic consumption.

The CNX Nifty is currently trading at 7,599.05 up by 90.25 points or 1.20% after trading in a range of 7,605.95 and 7,531.60. There were 45 stocks advancing against 5 declining on the index.

The top gainers of the Nifty were IDFC up by 4.40%, BPCL up by 3.99%, PNB up by 3.98%, Tata Power up by 3.66% and Bank of Baroda up by 3.62%. On the flip side, McDowell down by 3.89%, Reliance Industries down by 0.80%, Hero Motocorp down by 0.34%, M&M down by 0.17% and Maruti down by 0.08% were the losers on the index.

Most of the Asian equity indices were trading in green; Nikkei 225 up by 0.44%, Taiwan Weighted up by 0.93%, Jakarta Stock Index up by 0.54%, and Shanghai Composite up by 0.58% while, Straits Times down by 0.65% and Hang Seng down by 0.13% were the losers on the index.

The European markets were trading in green; Germany’s DAX added 0.31%, France’s CAC 40 gained 0.06% while UK’s FTSE 100 was up by 0.08%.