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, owing to sustained foreign capital inflows coupled with a firming trend on other Asian bourses. Foreign portfolio investors (FPIs) bought shares worth a net Rs 672.81 crore on September 02, 2014. The market buoyancy came on the back of data that showed a surplus on balance of payments for the third quarter on the trot, to go with encouraging 5.7% growth in GDP for the quarter ended June - the highest in the last nine quarters.  Besides, positive global factors with crude oil prices falling to multi-month lows too boosted investor sentiments. However, gains remained capped as Growth in services, which dominate India's economy, expanded at its weakest rate in three months in August. At present, Sensex and Nifty were trading above the crucial 27,100 and 8,100 levels respectively, with gains of over 0.80%.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over 0.50%.

Barring FMCG and banking, all other BSE sectoral indices were trading in the green. Among them, IT and TECK indices were the star-performers, followed by consumer durables and realty. In scrip specific development, Bharti Airtel has climbed 3%, extending its previous day’s nearly 4.2% gain, after the company's arm signed an agreement to acquire over 2.7 million subscribers of yuMobile. Besides, Era Infra Engineering has surged as much as 5% after receiving a construction contract from Airport Authority of India (AAI).

On global front, Asian stocks climbed, the yen touched an almost eight-month low and bonds in the region tracked Treasuries lower amid signs of strength in the U.S. economy. However, Major US stock markets ended lower, shrugging off robust manufacturing data, as investors booked profits in energy shares on the back of declining crude oil prices. Back home, the rupee opened strong by 6 paise at 60.63 per dollar against the previous close of 60.69 in early trade at the Interbank Foreign Exchange market due to sustained overseas capital inflows. The market breadth on BSE was positive, out of 2364 stocks traded, 1418 stocks advanced, while 867 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27141.74 up by 122.35 points or 0.45% after trading in a range of 27148.90 and 27067.02. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.73%, while Small cap index gained 0.58%.

The gaining sectoral indices on the BSE were IT up by 2.02%, TECK up by 1.99%, Consumer Durables up by 1.38%, Realty up by 1.32% and Metal up by 1.08%, while FMCG down by 0.17% and Bankex down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.37%, TCS up by 2.68%, Infosys up by 2.37%, Wipro up by 1.77% and Tata Steel up by 1.71%. On the flip side, GAIL India down by 1.32%, Hero MotoCorp down by 1.03%, ITC down by 0.85%, Bajaj Auto down by 0.71% and Dr. Reddys Lab down by 0.65% were the top losers.

Meanwhile, in a move to increase the domestic coal production, Environment Ministry has eased the clearance norms to increase production from coal mines with 20 million tonnes per annum capacity. The Ministry of Environment has agreed to do away with public hearings for a one-time expansion of existing coal mines of 20 million tonnes capacity. The ceiling on additional production has been kept at 6 million tonnes per annum, if the transportation of additional coal is done by means of conveyor or rail transport.

The decision was taken after a request was put by the Ministry of Coal. Earlier, in July, the Environment ministry had allowed coal mines to increase production without undertaking public hearings from existing lease areas by 50 percent, or up to 1 million tonnes a year, whichever is greater.

India’s domestic coal demand is around 35 percent higher than domestic supply. Acute coal shortage in the country has become primary reason for power deficit in the country as coal-fired plants account for around 59% of India's total installed electricity capacity. Coal India (CIL), the only producer of coal in the country, is struggling to meet domestic coal requirements amid concerns like shutdown of mining activities in Talcher Coalfields in Odisha. CIL production fell 4.21 percent short of its production target to 462.53 MT in FY14. The government has set coal production target at 507 MT for CIL for FY15.

The CNX Nifty is currently trading at 8,114.65 up by 31.60 points or 0.39% after trading in a range of 8,121.65 and 8,092.25. There were 26 stocks advancing against 24 declining on the index.

The top gainers on Nifty were Bharti Airtel up by 3.47%, TCS up by 2.60%, Infosys up by 2.19%, Tata Steel up by 1.78% and Tata Motors up by 1.63%. On the flip side, GAIL India down by 1.47%, United Spirits down by 1.09%, ITC down by 0.81%, Jindal Steel & Power down by 0.77% and ITC down by 0.75% were the top losers.

Asian markets were trading mostly in the green; Jakarta Composite increased by 0.23%, Nikkei 225 rose by 0.73%, Taiwan Weighted improved by 0.25%, Hang Seng was up by 1.52%, Straits Times was gained 0.19% and Shanghai Composite was up by 0.80%. On the flip side, KOSPI Index dropped by 0.14% and FTSE Bursa Malaysia KLCI declined by 0.44%.