Benchmarks soar to day’s high on increased buying activity

Benchmark equity indices, going strength to strength, were trading near day’s high point 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) amid mixed Asian cues. India Meteorological Department (IMD) forecast that the monsoon may hit the Kerala coast on May 30 even as the country stares at the possibility of below-normal rains for the second consecutive year bolstered sentiment. Meanwhile, narrower trade deficit data also added to the positive environment.

Country’s imports slid by 7.53% at $33.05 billion against $35.74 billion in previous month, while exports, continuing its declining trend  for sixth straight month declined by 7.93% at $22.05 billion from $ 23.95 billion in March, leaving a trade deficit of $10.99 billion in the month under review, according to the data released by the commerce ministry. Despite being at day’s high, both Sensex and Nifty were trading below crucial 27,450 and 8,300 levels respectively, with gains of around half of a percent. Meanwhile, broader indices also trading inline with larger counterparts, were up with gains in the range of 0.50-0.70%.

On the global front, Asian shares were trading mixed in afternoon deals on Monday after soft data raised doubts over whether the US economy has been growing despite US share prices standing at historic high. US industrial production unexpectedly fell for a fifth straight month in April, while consumer confidence dropped to a seven-month low in early May. Coming on the heels of weak retail sales and producer inflation data, the reports stoked concerns that the US economy is hardly gaining momentum after disappointing 0.2 per cent annualized growth in January-March.

Closer home, with across the board buying taking place, most of the sectoral indices were trading in positive territory, stocks from Oil & Gas, Infrastructure and Fast Moving Consumer Goods counters were the top gainers of the session. Stocks of oil marketing companies such as HPCL, BPCL and IOC were up on the back of a hike in petrol and diesel prices last week. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1370:640; while 37 shares remained unchanged.

The BSE Sensex is currently trading at 27446.84, up by 122.84 points or 0.45% after trading in a range of 27370.28 and 27517.31. 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 0.51%, while Small cap index up by 0.68%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.69%, INFRA up by 0.83%, FMCG up by 0.80%, Metal up by 0.69%, Consumer Durables up by 0.61% while, Auto down by 0.13%, Realty down by 0.10% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 2.70%, Hindalco up by 2.04%, GAIL India up by 1.98%, Vedanta up by 1.43% and ONGC up by 1.40%. On the flip side, Tata Motors down by 1.15%, Hero MotoCorp down by 0.44%, Cipla down by 0.37%, Coal India down by 0.30% and NTPC down by 0.26% were the top losers.

Meanwhile, Pension fund regulator PFRDA has invited application for a bank to act as National Pension System (NPS) trustee to facilitate fund transfers across entities such as annuity service providers and subscribers, presently being managed by Axis Bank. PFRDA has said that the NPS Trustee Bank shall be required to provide banking facilities as directed by NPS Trust under the prescribed regulations and guidelines.

Presently NPS has more than 87 lakh subscribers with Asset under Management (AUM) of over Rs 80,800 crore. The NPS Trust, responsible for taking care of the funds under the NPS, holds accounts with the NPS Trustee Bank. The Trustee Bank facilitate fund transfers across various entities of Central Recordkeeping Agencies (CRAs) system -- nodal offices, aggregators, pension funds, annuity service providers and subscribers, among others.

Currently, eight pension fund managers (PFMs) manage private-sector funds, and only three run by nationalized financial institutions are allowed to manage central and state government funds. Given the low volumes and the asset management fee of 0.01%, managing only private-sector funds becomes unviable for PFMs. Recently, the government has given mandate to the PFRDA to administer 'Atal Pension Yojana-(APY)' through Banks. The government has raised the foreign direct investment (FDI) limit in the sector to 49% last month and the entry of foreign pension funds will facilitate the government’s efforts to ensure a rapid increase in pension coverage of the private-sector workforce in India.

The CNX Nifty is currently trading at 8298.95, up by 36.60 points or 0.44% after trading in a range of 8271.95 and 8322.35. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Lupin up by 3.30%, Asian Paints up by 2.87%, Cairn India up by 2.60%, Dr. Reddys Lab up by 2.56% and BPCL up by 2.54%. On the flip side, Tech Mahindra down by 1.58%, Tata Motors down by 1.44%, Mahindra & Mahindra down by 0.82%, Power Grid Corpn. down by 0.75% and IDFC down by 0.61% were the top losers.

Asian markets were trading lower; FTSE Bursa Malaysia KLCI up by 0.1 points or 0.01% to 1,812.02; Jakarta Composite up by 0.96 points or 0.02% to 5,228.06; KOSPI Index up by 7.22 points or 0.34% to 2,113.72; Taiwan Weighted up by 26.62 points or 0.28% to 9,606.10; Nikkei 225 up by157.35 points or 0.8% to 19,890.27.

On the flip side, Hang Seng down by 302.24 points or 1.09% to 27,520.0; Shanghai Composite down by 27.49 points or 0.64% to 4,281.20 and Straits Times down by 7.51 points or 0.22% to 3,455.59.