Benchmarks extend gains; Nifty above 8850 mark

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high level, as funds and retail investors enlarged positions on hopes of pro-growth Budget and better third quarterly earnings by some bluechip companies. At present, Sensex and Nifty were trading above the crucial 29,250 and 8,850 levels respectively, with gains of over half a percent.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over 0.45%. Sentiment got a boost on expectations that the forthcoming Budget will be growth-oriented and the government will accelerate reforms. Besides, a firming trend at other Asian markets coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Some support also came with Prime Minister Narendra Modi assuring more reforms while rolling out the red carpet to investors, especially the multinationals, inviting them to make use of the large pool of highly talented youth in the country.

On global front, Asian stock markets mostly rose after Japan emerged from recession last quarter and as investors looked ahead to a meeting between Greece and its main European creditors. Furthermore, Oil prices too extended gains. Brent hit an 8 week high, trading above 60 dollars per barrel. Back home, Indian rupee strengthened by seven paise to 62.12 against the US dollar in morning trade on selling of the American currency by exporters.

Back on street, all the sectoral indices were gaining, led by realty, FMCG, Infrastructure and Auto. In scrip specific development, shares of Rajesh Exports jumped after the company's consolidated net profit for the third quarter ended December 31, 2014 surged 87% to Rs 171 crore compared to Rs 92 crore in the same quarter last fiscal. On the other hand, shares of Sun Pharmaceutical Industries declined after reporting 7% year-on-year drop in its consolidated net profit at Rs 1,425 crore for the quarter ended December 31, 2014.The market breadth on BSE was positive, out of 2320 stocks traded, 1289 stocks advanced, while 953 stocks declined on the BSE. 

The BSE Sensex is currently trading at 29294.86, up by 199.93 points or 0.69% after trading in a range of 29156.04 and 29325.35. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.61%, while Small cap index up by 0.49%.

The top gaining sectoral indices on the BSE were Realty up by 1.70%, FMCG up by 1.46%, Infrastructure up by 1.19%, Auto up by 1.17%, Metal up by 1.03%, while there were no losers on the sectoral space.

The top gainers on the Sensex were Hindustan Unilever up by 2.99%, Bharti Airtel up by 2.15%, Tata Motors up by 2.13%, Mahindra & Mahindra up by 2.00% and Hindalco up by 1.76%. On the flip side, Sun Pharma down by 1.51%, BHEL down by 0.92%, Larsen & Toubro down by 0.59%, Hero MotoCorp down by 0.44% and GAIL India down by 0.37% were the top losers.

Meanwhile, a fortnight ahead of the Union Budget, Prime Minister Narendra Modi has assured more reforms as he rolled out the red carpet to investors, especially the multinationals. While, assuring his administration will improve the ease of doing business, he said the number of clearances for setting up a hospitality venture will be brought down from a massive 110 to just about 20.

The prime minister stressed that there are tremendous opportunities in the manufacturing sector in India and it offers immense opportunities for ship-building and defence sectors, as the government has increased the FDI or foreign direct investment threshold to 49 percent in defence. He further said that “our government has ensured predictability in our procedures, laws and policies. We have also taken many initiatives towards ease of doing business.”

Modi invited the multinationals to make use of the large pool of highly talented youth in the country and assured corporates across the world that India is a land where they can find talents which can help them manufacture products that are very competitive. He said, “we have the highest demographic dividend, as 65 per cent of our population are below 35 years. Our talented youth have power to attract investments from across the world.”

He said his government’s effort is to make policies predictable to attract investments as he believes that good governance is a guarantee for development and the country wants the manufacturing sector, which today contributes only under 16 percent to GDP, to grow.

The CNX Nifty is currently trading at 8862.05, up by 56.55 points or 0.64% after trading in a range of 8824.70 and 8870.10. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.96%, BPCL up by 2.68%, Bharti Airtel up by 2.21%, Tata Motors up by 2.17% and Mahindra & Mahindra up by 1.88%. On the flip side, Sun Pharma down by 1.63%, BHEL down by 0.91%, Larsen & Toubro down by 0.61%, Hero MotoCorp down by 0.46% and Lupin down by 0.44% were the top losers.

Asian markets were trading mostly in the green; KOSPI Index rose 0.09%, FTSE Bursa Malaysia KLCI gained 0.26%, Shanghai Composite advanced 0.24%, Taiwan Weighted increased 0.35%, Hang Seng added 0.22% and Nikkei 225 was up by 0.51%. On the flip side, Jakarta Composite decreased 0.38% and Straits Times was down by 0.23%.