Benchmarks continue to trade in green; IT, Bankex pull

Indian equity benchmarks continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on optimistic mood from the early trade after the Reserve Bank of India (RBI) stated that the Indian economic growth is poised for a take-off amid signs of economic reforms, fiscal consolidation and projected improvement in investments. Investors however took cautious approach since the southwest monsoon continued its weak run. For the week ended Thursday, it was 25% below normal. Traders were seen piling up positions in IT, Bankex and TECK while selling was witnessed in Realty, Infra and FMCG sector stocks. Hectic buying activity was witnessed in sugar companies after the government decided to increase import duty on the sweetener from 15% to 25%. In scrip specific development, United Spirits was trading weak after the National Stock Exchange of India decided to remove this stock from Futures and Options segment.

On the global front, the Asian markets were trading mostly in green, while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,900 and 26,400 levels respectively. The market breadth on BSE was negative in the ratio of 1375:1482 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 26455.05, up by 94.94 points or 0.36% after trading in a range of 26383.16 and 26508.27. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index up by 0.12%.

The gaining sectoral indices on the BSE were IT up by 1.75%, Bankex up by 1.20%, TECK up by 1.10%, Capital Goods up by 0.53%, Auto up by 0.23% while, Realty down by 0.59%, INFRA down by 0.53%, FMCG down by 0.46%, Power down by 0.37% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.60%, Hindalco up by 2.45%, Infosys up by 1.67%, Axis Bank up by 1.28% and TCS up by 1.27%. On the flip side, Coal India down by 1.86%, HDFC down by 1.50%, Bharti Airtel down by 1.37%, Dr. Reddy’s Lab down by 1.29% and Hero MotoCorp down by 0.92% were the top losers.

Meanwhile, according to the World Gold Council (WGC), gold demand in rural India is likely to be lower this year with weak monsoon affecting household savings. Gold demand in the country mainly comes from rural households, especially farmers and about 7-8 percent of rural household savings goes into gold buying in the country.

The WGC stated that poor monsoon will impact the crop production, which in turn impact the rural gold demand. However, long-term demand for gold remains intact in India despite government restrictions, it added.  The WGC estimated that India’s gold demand at 850-950 tonnes in 2014 as against 974 tonnes in the last year. Gold is the second largest import item for India after crude oil and is mainly utilised to meet the demand of jewellery industry. To curb gold shipments to check country’s widening current account deficit (CAD), the government had taken various measures like high customs duty of 10% and 80/20 rule under which 20% of all gold imports by importers has to be re-exported. Meanwhile, the government’s measures to contain the gold imports yielded results as gold and silver imports fell by 40.02% to $33.46 billion in FY14 due to these stern government’s norms.

However, the council stated that government curbs have encouraged smuggling of gold into the country and about 200 tonnes out of the total demand of 850-950 tonnes projected for 2014 calendar year would be served through grey market. The WCG further stated that as India’s gold demand would remain strong for India in the long term, there is need to find ways to mobilise and monetise 22,000 tonnes of gold stock worth $1 trillion held in private hands via formal financial sector.

The CNX Nifty is currently trading at 7919.85, up by 28.75 points or 0.36% after trading in a range of 7900.05 and 7929.05. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.65%, HCL Tech. up by 3.48%, SBI up by 2.56%, PNB up by 2.47% and Hindalco up by 2.45%. On the flip side, United Spirits down by 1.96%, BPCL down by 1.81%, Coal India down by 1.78%, HDFC down by 1.72% and Bharti Airtel down by 1.37% were the top losers.

The Asian markets were trading mostly in green; Straits Times increased 5.98 points or 0.18% to 3,330.07, Shanghai Composite increased 10.35 points or 0.46% to 2,240.81, KOSPI Index increased 12.49 points or 0.61% to 2,056.70, Hang Seng increased 118.13 points or 0.47% to 25,112.23 and Taiwan Weighted increased 126.72 points or 1.37% to 9,380.10.

On the other hand, Nikkei 225 decreased 47.01 points or 0.3% to 15,539.19, Jakarta Composite decreased 9.98 points or 0.19% to 5,196.16 and FTSE Bursa Malaysia KLCI decreased 4.44 points or 0.24% to 1,870.37.

The European markets were trading in red; Germany’s DAX decreased 21.79 points or 0.23% to 9,379.74, France’s CAC decreased 18.45 points or 0.43% to 4,274.48 and UK’s FTSE 100 decreased 4 points or 0.06% to 6,773.66.