Benchmarks trades in green in late afternoon session

Indian equity markets gained strength after moving in a narrow range in the late afternoon session on account of buying in frontline blue chip counters. Traders were seen piling position in Bankex, Auto and Capital Goods stocks. In scrip specific development, shares of fertilizer companies like GSFC, GNFC, RCF, FACT, Chambal Fertilisers and Chemicals and National Fertilisers were trading firm on reports that the government has approved new urea policy for the next four years. The policy is aimed at timely supply and rationalization of subsidy. Hindalco Industries was trading in red after its subsidiary, Novelis, which contributes around 50 percent to Hindalco’s gross profit reported disappointing earnings for the January-March quarter. On the global front, the Asian markets were trading mostly in green while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,200 and 27,200 levels respectively. The market breadth on BSE was positive in the ratio of 1550:978 while 113 scrips remained unchanged.

The BSE Sensex is currently trading at 27219.82, up by 342.34 points or 1.27% after trading in a range of 26750.01 and 27299.80. 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 1.80%, while Small cap index up by 0.92%.

The gaining sectoral indices on the BSE were Bankex up by 2.64%, Auto up by 1.82%, Capital Goods up by 1.61%, INFRA up by 1.39% and Consumer Durables up by 1.34%.

The top gainers on the Sensex were Axis Bank up by 5.84%, GAIL India up by 3.69%, Mahindra & Mahindra up by 3.12%, SBI up by 2.51% and ICICI Bank up by 2.48%.

On the flip side, NTPC down by 2.65%, Hindalco down by 2.55%, Bharti Airtel down by 1.03%, Coal India down by 0.70% and Bajaj Auto down by 0.62% were the top losers.

Meanwhile, in not so encouraging development for the economy, global rating agency, Moody’s Investor Service has stated that monsoon failure and global financial volatility could pose additional risks to India's growth this year, despite this it expects the growth likely to average around 7.5% over the next 18-24 months due to improvement in business environment induced by reforms. The recent reforms efforts from India’s central bank include inflation targeting framework, regulatory simplification, increase in limits for foreign direct investment in rail infrastructure, defence and insurance sectors, among others.

Further, Moody’s in its report highlighted that the current economic conditions in India was reflective of both global and domestic factors, including weak domestic credit conditions, tepid local demand and uncertain global growth. The report further noted that India’s structural reform efforts would revive domestic investment and competitiveness, but over the medium and not the near term.

The report cautioned that US fed decision of hiking rates by June or September could trigger a flight of capital from emerging markets, including India, and result in financial volatility. It added that India’s monsoon for the second consecutive year were likely to be below normal in the current year  at 93%, as parts of north-west and central India may be the most affected. 

Moody’s highlighted the sustainability of the growth rates for the economy would be depended upon measures taken on infrastructure, regulatory and implementation of bureaucratic reforms front and further cautioned that despite robust growth, India's fiscal metrics were likely to remain weaker than those of similarly rated peers, and that he social, political and economic challenges associated with low average incomes would continue to persist over the medium term.

Nevertheless, the rating agency also listed favourable demographics, a large economy, economic diversity as well as high savings and investment rates as India's structural positives.

The CNX Nifty is currently trading at 8233.15, up by 106.20 points or 1.31% after trading in a range of 8089.80 and 8254.95. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 5.70%, GAIL India up by 3.66%, Mahindra & Mahindra up by 3.19%, Yes Bank up by 3.12% and Ambuja Cement up by 2.82%.

On the flip side, Hindalco down by 2.73%, NTPC down by 2.58%, Zee Entertainment down by 1.00%, Bharti Airtel down by 0.87% and Bajaj Auto down by 0.66% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.25 points or 0.13% to 1,800.86, Straits Times increased 11.32 points or 0.33% to 3,453.65, KOSPI Index increased 17.39 points or 0.83% to 2,114.16, Jakarta Composite increased 38.78 points or 0.74% to 5,244.39, Taiwan Weighted increased 43.38 points or 0.45% to 9,724.11 and Nikkei 225 increased 139.88 points or 0.71% to 19,764.72.

On the other hand, Hang Seng decreased 157.9 points or 0.58% to 27,249.28 and Shanghai Composite decreased 25.46 points or 0.58% to 4,375.76.

The European markets were trading in green; UK’s FTSE 100 increased 54.87 points or 0.79% to 6,988.67, France’s CAC increased 66.96 points or 1.35% to 5,041.61 and Germany’s DAX increased 101.41 points or 0.88% to 11,573.82.