Benchmarks continue to trade in green in late morning session

Indian bourses continued to trade in green in late morning session on increased buying by participants, supported by forecast of a timely monsoon and hopes of a rate cut by the Reserve Bank of India (RBI). At present, Sensex and Nifty were trading above the crucial 27,450 and 8,300 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 0.62% and 0.74% respectively. Sentiment got a boost with Finance Minister Arun Jaitley’s statement that making taxation more reasonable and improving ease of doing business will be among his top priorities going ahead. Meanwhile, finance ministry announced that it has contained the fiscal deficit at four per cent of GDP for 2014-15 at Rs 5,01,880 crore, which is even lower than the stiff 4.1 per cent target set in the Budget. However, some investors remained cautious as Central government has missed the overall revised tax collection target for both direct and indirect taxes by Rs 2,288 crore in the financial year 2014-15

On global front, Asian shares were mostly in the green, tracking the gains in US shares as weaker-than-expected economic data spurred bets the Federal Reserve won’t rush to raise interest rates. U.S. industrial production unexpectedly fell for a fifth straight month in April while consumer confidence dropped to a seven-month low in early May, data showed on Friday, pushing down the dollar and U.S. bond yields. Back home, Indian rupee appreciated by another 4 paise to 63.47 against the US dollar in early trade on Monday, extending its winning streak for the fourth day on continued selling of the American currency by exporters.

Back on street, all the sectoral indices were trading in the positive territory with BSE Oil & Gas index leading the rally up 1.67% followed by Infrastructure, Consumer Durables and FMCG indices trading higher over half a percent. In scrip specific development, shares of Astec Lifesciences have soared after reporting a more than doubled consolidated net profit at Rs 3.25 crore for the quarter ended March 2015 (Q4), on back of strong sales. On the flip side, Shares of Jammu & Kashmir (J&K) Bank dipped after the bank reported a sharp 60% year-on-year decline in net profit at Rs 102 crore for the quarter ended March, 2015 (Q4), on account of higher provision for bad loans.

The market breadth on BSE was positive, out of 2112 stocks traded, 1386 stocks advanced, while 649 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27455.08, up by 131.08 points or 0.48% after trading in a range of 27370.28 and 27517.31. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.62%, while Small cap index up by 0.74%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.67%, Infrastructure up by 0.99%, Consumer Durables up by 0.95%, FMCG up by 0.76% and Capital Goods up by 0.57%, while there were no losers on the index.

The top gainers on the Sensex were Hindalco up by 2.81%, Dr. Reddys Lab up by 2.47%, GAIL India up by 1.79%, Bharti Airtel up by 1.54% and ONGC up by 1.44%. On the flip side, Tata Motors down by 1.09%, Hero MotoCorp down by 0.69%, Hindustan Unilever down by 0.42%, TCS down by 0.34% and Coal India down by 0.29% were the top losers.

Meanwhile, Supporting government’s initiatives and policy actions, the Associated Chambers of Commerce and Industry of India (Assocham) has awarded the Narendra Modi government seven out of ten marks for its performance over the past year. Though, the industry body lauded the government for improving the macroeconomic situation, financial inclusion, Swachch Bharat initiative, coal auction, and clearing difficult legislation in Parliament; it said a lot was still to be done to improve the ease of doing business in India. It said that the government has made a good beginning, though it now needs to move faster on things like Goods and Services Tax and send a new signal of confidence.

Assocham has also said that the NDA government has to cover some ground in terms of taxation issues, particularly with regard to FIIs' problems on retrospective liabilities and in taking big-ticket infrastructure projects off the ground. The chamber also said the focus must remain on further improving ease of doing business, as at the state level, a lot needs to be done.

Talking about the industrial output, it said that the growth in industrial production is not only a function of government policies but also a lot of domestic and global macro factors, which do not seem to be very friendly. It further stated that the global environment for manufacturing is not conducive, as has been reflected in the downward trends in exports of merchandise goods.

Assocham commenting on Prime Minister Narendra Modi's foreign visits said that it has brought in qualitative change in the way our economic diplomacy is being pursued and the Prime Minister should continue to engage with important powers such as the US, Germany, China and neighbouring countries. According to Assocham, qualitative changes in economic diplomacy have resulted in missions abroad being much more aligned with economic programmes such as Make in India, Smart Cities and Swachch Bharat Abhiyaan.

The CNX Nifty is currently trading at 8304.25, up by 41.90 points or 0.51% after trading in a range of 8271.95 and 8322.35. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.99%, Cairn India up by 2.87%, Ultratech Cement up by 2.55%, BPCL up by 2.54% and Dr. Reddys Lab up by 2.42%. On the flip side, Tech Mahindra down by 1.75%, Tata Motors down by 1.18%, Hero MotoCorp down by 0.69%, Coal India down by 0.46% and Tata Steel down by 0.36% were the top losers.

Asian equity indices were trading mostly in the green; Shanghai Composite rose 0.02%, Jakarta Composite increased 0.02%, Taiwan Weighted gained 0.09%, Nikkei 225 was up by 0.69% and KOSPI Index was up by 0.07%. On the flip side, Hang Seng decreased 0.74%, Straits Times slipped 0.11% and FTSE Bursa Malaysia KLCI dipped 0.08%.