Markets continue to trade with solid gains; Nifty holds above 8700 mark

Going from strength to strength, local equity markets were trading firmly in green with gains of around 3/ 4 of a percent which lifted both Sensex and Nifty above psychologically crucial 28,800 and 8,700 levels respectively on sustained buying activities by both funds and retail investors thanks to positive global cues. Sentiments were also buttressed after Organisation for Economic Cooperation and Development’s (OECD), in its interim economic assessment report pegged India’s growth to 7.7% this year and 8 percent in the coming year. Although, bit of profit-booking has dragged the benchmarks from day’s high, overall mood continues to remain buoyant. Meanwhile, broader indices also participating into the rally were trading higher with gains of around half of a percent.

On the global front, Asian shares enjoyed their best session in 18 months on Thursday as investors priced in a later start and a slower pace for future US rate rises. At the conclusion of two day’s policy meet, the Federal Reserve sounded less likely to act aggressively in raising interest rates than investors anticipated. Although the Fed removed a reference to being “patient” on rates from the statement it issued after its policy meeting, it reduced its forecast for the path of the federal funds rate and economic growth.

Closer home, with buying being mostly broad-based, none of the sectoral indices on BSE were trading into negative territory, nevertheless maximum buying was witnessed by stocks from Consumer Durables, Capital Goods and Metal counters. Capital Goods counter’s gains were led by L&T stocks, which rallied over 2% on winning orders worth Rs 1255 crore in March. In stock-related action, Airlines stocks like Spicejet and Jet Airways ran out of steam after civil aviation ministry tightened the eligibility criteria norms for flying international routes by increasing the domestic flying credits (DFCs) eligibility to 300 DFC from the current 200. According to the new proposal, airlines will have to accumulate DFCs by flying to more cities in India and will have the right to automatically fly overseas once the credits cross a certain threshold. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1379:1166; while 116 shares remained unchanged.

The BSE Sensex is currently trading at 28835.68, up by 213.56 points or 0.75% after trading in a range of 28768.63 and 28978.74. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index up by 0.58%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.19%, Capital Goods up by 1.22%, Metal up by 1.06%, Power up by 0.82% and Bankex up by 0.63%.

The top gainers on the Sensex were Tata Steel up by 2.94%, Sun Pharma Inds. up by 2.59%, GAIL India up by 1.73%, Larsen & Toubro up by 1.67% and ICICI Bank up by 1.54%. On the flip side, Reliance Industries down by 0.13%, HDFC Bank down by 0.09% and Mahindra & Mahindra down by 0.09% were the top losers.

Meanwhile, domestic natural gas prices are likely to be slashed by around 10 percent to $ 5.02 per unit from April 1, as compared to the current price of $5.61. On a gross-calorific value basis, the price will be around $4.67 per mmBtu as compared to $5.05 currently. The revised price from April 1 is arrived at by applying the Cabinet-approved formula on the select average global prices for the fuel between January and December 2014. The new government had in October 2014 used the new formula to fix price of almost all domestically produced natural gas at $5.61 per mmBtu for the period up to March 31.

There was a drop in prices at international gas hubs in the second half which led to the reduction in price - US Henry Hub dropped from $ 6 per mmBtu in February to $ 3.78 per mmBtu in October and from $ 10.72 per mmBtu on NBP in January to $ 6.40. The new price based on a net calorific value basis will be announced shortly and will be valid for the first half of 2015-16.

The CCEA on October 18 last year approved the formula, after tweaking the Rangarajan formula approved by the UPA government in June 2013. The price is to be revised every six months. Rates for next six months are to be decided based on one year average price at Henry Hub of US, National Balancing Point of UK, rates in Alberta (Canada) and Russia with a lag of one quarter.

This will be the first reduction in natural gas in India, though the current price of $ 5.61 per mmBtu is already among the lowest in Asia Pacific. China pays $ 11.9 per mmBtu rate for new projects, while Indonesia and the Philippines pays the explorer $ 11 and $ 10.5 respectively.

The CNX Nifty is currently trading at 8745.80, up by 59.90 points or 0.69% after trading in a range of 8723.80 and 8788.20. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Lupin up by 3.70%, Tata Steel up by 3.17%, Asian Paints up by 2.85%, Sun Pharma up by 2.82% and Larsen & Toubro up by 1.74%. On the flip side, HCL Tech. down by 2.13%, Tech Mahindra down by 1.44%, BPCL down by 0.96%, Zee Entertainment down by 0.75% and PNB down by 0.50% were the top losers.

Asian markets were trading mostly into positive territory; with Shanghai Composite trading higher by 2.51 points or 0.07% to 3,579.81; KOSPI Index trading higher by 9.44 points or 0.47% to 2,037.89; FTSE Bursa Malaysia KLCI trading higher by 10.79 points or 0.6% to 1,808.36; Straits Times trading higher by 12.5 points or 0.37% to 3,374.25; Jakarta Composite trading higher by 41.03 points or 0.76% to 5,454.18; Taiwan Weighted trading higher by 83.3 points or 0.86% to 9,736.73 and Hang Seng trading higher by 277.27 points or 1.15% to 24,397.35. On the flip side, Nikkei 225 down by 67.92 points or 0.35% to 19,476.56 was the lone loser amongst Asian pack.