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 level, as participants indulged in enlarging positions on hopes of faster economic reforms by the government and optimism over the forthcoming Budget. At present, Sensex and Nifty were trading above the crucial 29,300 and 8,850 levels respectively, with gains of over 0.45%.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over 0.70%.

Sentiments got a boost with the government initiative to further ease procedures for seeking permission of the Foreign Investment Promotion Board (FIPB) for foreign direct investment (FDI). Besides, a firm trend in other Asian markets on Greece reaching an agreement with its creditors, also supported upside. However, gains remained capped as the SBI Composite Index, an indicator for tracking India's manufacturing activity, registered a month-on-month decline to 48.3 in February 2015 from 52.1 in January 2015. Some caution also came with report that foreign portfolio investors (FPIs) sold shares worth a net Rs 182.80 crore on February 16, 2015.

On global front, Asian stocks advanced on investor optimism ahead of a European Central Bank meeting on bailout conditions for Greece, though trading was quiet as many markets were shut for the Lunar New Year. Furthermore, US shares gained modestly overnight, with the S&P 500 touching another record high. Back home, Indian rupee depreciated by 10 paise to 62.26 against the dollar in early trade due to appreciation of the US currency overseas. Increased demand for the dollar from importers also put pressure on the rupee.

Back on street, stocks from Capital Goods, Consumer Durables and Realty counters were supporting the markets’ uptrend, while those from Teck, Metal and IT counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Jyoti Structures have gained after the company received orders worth Rs 582 crore for transmission line projects. On the other hand, shares of Hero MotoCorp dipped on reports that the promoter of the company is planning to sell part of its holding through open market today.

The market breadth on BSE was positive, out of 2337 stocks traded, 1440 stocks advanced, while 808 stocks declined. 

The BSE Sensex is currently trading at 29311.35, up by 175.47 points or 0.60% after trading in a range of 29126.91 and 29319.28. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.72%, while Small cap index gained 0.99%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.36%, Consumer Durables up by 1.33%, Realty up by 1.25%, FMCG up by 1.03% and Power up by 1.02% while, TECK down by 0.36%, Metal down by 0.30%, IT down by 0.22% and Infrastructure down by 0.18% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.78%, Mahindra & Mahindra up by 2.38%, Tata Power up by 2.26%, NTPC up by 2.05% and GAIL India up by 1.75%. On the flip side, Hero MotoCorp down by 4.32%, Bharti Airtel down by 2.34%, Sesa Sterlite down by 1.28%, Bajaj Auto down by 0.89% and SBI down by 0.75% were the top losers.

Meanwhile, the Finance Minister Arun Jaitley, criticizing the power subsidy has said that the ongoing auction of coal mines would help in ensuring cheaper electricity to the common man in a sustained manner, as against the practice of states subsidising power. He further stated that a state subsidy really means that you will have to tax people more in order to provide something free to some other people.

Jaitley emphasized that the reverse auction process will ensure cheaper electricity to common man, as in reverse bidding, the cost of power is going to be linked with the rate at which one gets the fuel. There is aggressive bidding going on for the first tranche of the coal mines auction.

The government is auctioning cola blocks after the Supreme Court cancelled allocation of 204 mines in September. The government has put 19 blocks on sale in the first tranche with the last day for the auction of first lot of mine being February 22. The government has said that poor states would benefit from the auction and is expected to fetch states such as Jharkhand, Odisha, Chhattisgarh, Madhya Pradesh, Maharashtra and West Bengal Rs 15 lakh crore over a 30-year period, or Rs 50,000 crore a year on an average.

The CNX Nifty is currently trading at 8850.80, up by 41.45 points or 0.47% after trading in a range of 8808.90 and 8858.00. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were HDFC up by 2.69%, Mahindra & Mahindra up by 2.37%, NTPC up by 2.15%, Tata Power up by 1.96% and GAIL India up by 1.90%. On the flip side, Hero MotoCorp down by 4.34%, NMDC down by 3.22%, Bharti Airtel down by 2.60%, Sesa Sterlite down by 1.39% and Zee Entertainment down by 0.99% were the top losers.

Most of the Aisan equity indices were trading in the green; Straits Times increased 0.58%, Hang Seng rose 0.19%, Jakarta Composite surged 1.04% and Nikkei 225 was up by 0.97%. On the flip side, FTSE Bursa Malaysia KLCI was down by 0.12%.