Benchmarks trade slightly in green in early trade of F&O expiry

Indian equity benchmarks are trading slightly in the green in early deals on May F&O expiry day as investors opted to buy beaten down but fundamentally strong stocks. Some support came in with industry body CII’s statement that India’s economy can grow at 9-10 percent in the medium-term with a multi-pronged economic strategy. It has outlined ten areas requiring policy attention that can bring huge economic benefits for growth, investment and employment creation. However, gains remained capped on report that foreign portfolio investors sold shares worth a net Rs 934.98 crore on May 27, 2015, as per provisional data.

On the global front, the US markets bouncing back from their previous session’s sell-off ended higher in last session with the tech-heavy Nasdaq reaching a new record closing high. Sentiments improved with optimistic comments from Greek Prime Minister regarding his nation’s negotiations with creditors. The Asian markets were trading mixed at this point of time. Japanese Nikkei edged higher by over half a percent as the yen traded near an almost eight-year low.

Back home, on the sectoral front, auto, consumer durables and metal witnessed the maximum gain in trade, while infra, healthcare and power remained the few losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1,019 shares on the gaining side against 662 shares on the losing side while 69 shares remain unchanged.

The BSE Sensex is currently trading at 27606.31, up by 41.65 points or 0.15% after trading in a range of 27567.12 and 27666.37. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index gained 0.29%.

The top gaining sectoral indices on the BSE were Auto up by 0.56%, Consumer Durables up by 0.52%, Metal up by 0.46%, Oil & Gas up by 0.30%, Capital Goods up by 0.25% while, INFRA down by 0.33%, Healthcare down by 0.24% and Power down by 0.07% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.32%, Hero MotoCorp up by 1.38%, Vedanta up by 1.35%, Coal India up by 1.23% and Axis Bank up by 0.73%. On the flip side, Tata Power down by 1.06%, GAIL India down by 0.98%, Hindalco down by 0.82%, Mahindra & Mahindra down by 0.74% and Hindustan Unilever down by 0.72% were the top losers.

Meanwhile, drawing parallel with China, Chief Economic Advisor (CEA) Arvind Subramanian pitched for rate cut by the Reserve Bank of India (RBI) in its upcoming monetary policy on June 2, 2015 to boost growth. Citing China's example, Subramanian said the country has been buying dollars to build reserves and cutting its interest rates aggressively to make its currency more competitive and promote growth.

Subramanian wants RBI to cut interest rates so as to help depreciate the domestic currency to make Indian exports competitive and aid Make in India campaign. The Reserve Bank is slated to announce its second bi-monthly policy on June 2 during which it will take a call on interest rate taking into account inflation and other economic parameter.

Further batting towards this, he pointed that while macro-economy had turned around it was fair to assume that the real economy was recovering. He asserted that another indicator that points towards economic recovery was indirect tax receipts, adding that the buoyancy in tax collections during April was indicative of GDP growth bettering to about 9% in the current fiscal, from 7.4% a year ago.

Pointing to the evidence of improving macro-economic situations, Arvind said the Current Account Deficit (CAD), which more than a year back was a big worry, would be now be less than 1% in the current fiscal and that prices of oil, which form about 79% of the country’s imports, are likely to remain in the comfort zone of $50-80 per barrel without 'wild swings'.

Moreover, CEA is also pinning hopes on adequate food grain stock helping to keep inflation under control in the event of below-normal monsoon as forecasted by Indian Meteorological Department (IMD).

The CNX Nifty is currently trading at 8348.80, up by 14.20 points or 0.17% after trading in a range of 8335.20 and 8364.50. There were 28 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.84%, Vedanta up by 1.59%, Hero MotoCorp up by 1.29%, Coal India up by 1.25% and Asian Paints up by 0.80%. On the flip side, HCL Tech. down by 1.13%, Tata Power down by 0.99%, Mahindra & Mahindra down by 0.96%, BHEL down by 0.90% and GAIL India down by 0.75% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI rose 0.83 points or 0.05% to 1,755.88, KOSPI Index increased 8.25 points or 0.39% to 2,115.75, Taiwan Weighted jumped 34.31 points or 0.35% to 9,727.85 and Nikkei 225 was up by 133.29 points or 0.65% to 20,605.87.

On the flip side, Hang Seng decreased 424.53 points or 1.51% to 27,656.68, Shanghai Composite declined 69.25 points or 1.4% to 4,872.46, Jakarta Composite dipped 8.22 points or 0.16% to 5,245.17 and Straits Times was down by 7.36 points or 0.21% to 3,417.58.