Markets continue to trade firm; realty, infrastructure stocks surge

Indian bourses continued to trade firm in the afternoon session on account of fresh buying by funds and retail investors. Firm global cues coupled with some positive industry related announcement has enthused the domestic equity benchmarks to extend gains and most of the sectoral indices were trading in green. Global investors are expecting that the situation in Ukraine will ease following comments from Nikolai Patrushev, Secretary of the Russian Security Council. Realty and infrastructure stocks were on buyers' radar as the Securities and Exchange Board of India (SEBI) has cleared the new norms for setting up and listing of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Buying was also witnessed in frontline blue chip stocks such as M&M, Tata Motors and L&T among others. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices were trading up by over 0.70%. However, the stocks of FMCG and power sector were trading in negative territory. 

Stock specific movement, Mahindra and Mahindra (M&M) has surged over 4% to Rs 1,281 on expectation of agri machinery sector would get strong booster over next 2-3 years as better prospects of agriculture sector supported by number of government aids and more focus on rural economy by new government. On the other hand, IDBI Bank has dipped around 5% to Rs 79.35 on reports that the Central Bureau of Investigation (CBI) began probing loans by state-owned bank to Kingfisher Airlines that went bad.

On global front, most of the Asian equity indices were trading in green with Straits Times Index up by 0.68% and Taiwan Weighted up by 0.96%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,600 and 25,000 levels respectively. The market breadth on BSE was negative, out of 2,431 stocks traded, 628 stocks advanced, while 1,719 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,498.23 up by 169.09 points or 0.67% after trading in a range of 25,550.72 and 25,456.75. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.74%, while Small cap index up by 1.19%.

The gaining sectoral indices on the BSE were Auto up by 2.04%, Realty up by 2.01%, Capital Goods up by 1.29%, infrastructure up by 0.79% and Bankex up by 0.59%. On the flip side, FMCG down by 0.28% and Power down by 0.11% were the losing indices on the BSE.

The top gainers on the Sensex were M&M up by 4.93%, Tata Motors up by 2.77%, Infosys up by 1.92%, L&T up by 1.66% and Maruti Suzuki up by 1.46%. On the flip side, Dr Reddy’s Lab down by 1.75%, Tata Power down by 1.31%, NTPC down by 0.91%, HUL down by 0.41% and Bajaj Auto down by 0.35% were the top losers on the BSE. 

Meanwhile, the Confederation of Indian Industry (CII) has stated that green shoots have started to appear in the manufacturing sector, which is critical for job creation, as many segments are likely to post higher output in coming future. The CII-Ascon  survey for the April-June quarter indicated that important manufacturing sectors like consumer durables including the vehicle industry and white goods industry witnessed strong recovery in output which in turn led to improvement in the overall industry growth.

The survey categorizes the growth range into four broad categories include excellent (over 20 percent), good (10-20 percent), low (0-10 percent) and negative. As per the survey, the number of sectors showing high and excellent growth (10 percent and above) have increased to 24 in the quarter April-June 2014 from 15 in last quarter in January-March 2014.

Further the survey indicated that sub-sectors such as smartphones, tablets, LEDs and LCDs have achieved phenomenal growth of over 20 percent in the reported quarter. The passenger car segment has also grown for the first time in the last two years between 5 and 10 percent. The survey added that good growth of automobile industry is mainly driven by the excise duty cuts announced in the interim budget and its extension in the Budget 2014-15 presented by the new government. Further, excise duty stimulus has also provided impetus to capital goods sector as well as the white goods segment in April-June 2014.

The CII-Ascon survey noted that key manufacturing sectors during April-June quarter had shown stability in its growth which also improved the overall industry sentiment. Meanwhile, the Manufacturing sector, which consists around 75.5% weight in the IIP, recorded a contraction of 0.8% in FY14 fiscal as compared to growth of 1.3% in FY13.

The CNX Nifty is currently trading at 7,613.40 up by 44.85 points or 0.59% after trading in a range of 7,633.55 and 7,599.75. There were 34 stocks advancing against 16 declining on the index.

The top gainers of the Nifty were M&M up by 4.92%, DLF up by 2.99%, Tata Motors up by 2.75%, IDFC up by 2.39% and Ultra-tech Cement up by 2.38%. On the flip side, Dr Reddy’s Lab down by 1.95%, HCL Tech down by 1.76%,Power Grid down by 1.18%, NTPC down by 1.05% and Tata Power down by 0.99% were the major losers on the index.

Most of the Asian equity indices were trading in green; Jakarta Stock Price Index up by 0.76% to 5,092.70, Straits Times Index up by 0.68% to 3,311.34, Taiwan Weighted up by 0.96% to 9,172.91, Nikkei 225 up by 2.37% to 15,129.28, Hang Seng up by 1.24% to 24,633.30 and Shanghai Composite up by 1.18% to 2,220.37