Benchmarks extend gains; Nifty above 8400 mark

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high level on back of fresh positions built-up by participants, following the beginning of the June F&O series and value-buying in select counters. Besides, a better trend in other Asian markets triggered buying on the domestic bourses.  At present, Sensex and Nifty were trading above the crucial 27,750 and 8,400 levels respectively, with gains of about a percentage point.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by 1.07% and 0.90% respectively. Sentiment got a boost with report that the government reducing paperwork for foreign investors by allowing them to freely transfer stakes in companies operating in sectors where investments are allowed under the automatic route without seeking its prior approval. This is aimed at improving ease of doing business and attracting foreign direct investment (FDI) into the country. However, some inventors remain causes ahead of GDP numbers for the January-March quarter to be released in the day and disappointing earnings by more companies.

On global front, Asian shares rose on Friday as Chinese shares edged back from the previous day's dizzying plunge, though regional investors remained fearful that the world's best performing equity market was at the beginning of a major correction. However, Wall Street's three main markets ended lower Thursday, spooked by worries about Greece's long-running debt talks as well as China's heavy sell-off. Back home, Indian rupee edged higher by 5 paise to 63.75 against the dollar in early trade due to increased selling of the US currency by exporters and banks.

Back on street, all the BSE sectoral indices were trading significantly in the green. Among them, TECK index was the star-performer and was up 1.24 per cent, followed by Oil & Gas up by 1.19 per cent and IT up by 1.09 percent. In scrip specific development, Shares of Page Industries have surged after the company reported a healthy 34% year-on-year jump in net profit at Rs 47 crore for the fourth quarter ended March 31, 2015, on the back of strong sales. On the other hand, Shares of Wockhardt dipped after the company reported a 55% year-on-year decline in consolidated net profit at Rs 34 crore for the fourth quarter ended March 31, 2015, due to lower revenue growth.

The market breadth on BSE was positive, out of 2052 stocks traded, 1449 stocks advanced, while 523 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27764.82, up by 258.11 points or 0.94% after trading in a range of 27467.23 and 27779.93. 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 1.07%, while Small cap index up by 0.90%.

The top gaining sectoral indices on the BSE were TECK up by 1.24%, Oil & Gas up by 1.19%, IT up by 1.09%, Realty up by 0.97% and Auto up by 0.87%, while there were no losers on the sectoral space.

The top gainers on the Sensex were Bharti Airtel up by 3.29%, Coal India up by 2.44%, Cipla up by 1.88%, Maruti Suzuki up by 1.63% and Sun Pharma up by 1.60%. On the flip side, ONGC down by 1.34%, BHEL down by 1.11% and Hindalco down by 0.45% were the top losers.

Meanwhile, ahead of the official release of the fourth quarter as well as for the entire fiscal 2014 Gross Domestic Product (GDP) data from the Central Statistical Organisation (CSO), global rating agency Moody's Analytics has said that India's economic growth rate in the January-March quarter is likely to slip to 7.2 percent from 7.5 percent in the previous three months, mainly on account of lower production and weak global demand.

Moody's while affirming the economy was growing much below its potential of closer to 9% has further stated that “Although India is among the world’s fastest-growing economies, we believe it is operating with a negative output gap,” it said. “External headwinds weighed on India’s March quarter GDP.

It also raised questions on the new GDP data series by the Central Statistical Organisation (CSO), which takes 2011-12 as the base year, saying that new data 'are dubious' as they do not align well with other indicators of economy. As per CSO's new GDP data, the Indian economy expanded by 6.9 percent in 2013-14 and for 2014-15 the growth is estimated at 7.4 percent. As per CSO's new GDP data, the Indian economy expanded by 6.9 percent in 2013-14 and for 2014-15 the growth is estimated at 7.4 percent. It has said that the revised methodology to the industrial production series, to be introduced in coming months, will better reflect the new GDP series.

Moody’s said that 'External headwinds weighed on India's March quarter GDP. The trade deficit widened, exports fell at double-digit in the opening months of 2015. Mixed global demand is partly to be blamed, while lower global commodity prices are also hurting exporter incomes.' It added that global factors apart, domestic issues are also concerning, as commercial banks have been reluctant to pass on the cuts in the benchmark lending rate by the Reserve Bank of India’s from earlier in the year.

The CNX Nifty is currently trading at 8400.05, up by 81.05 points or 0.97% after trading in a range of 8305.70 and 8404.95. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.71%, Bharti Airtel up by 2.88%, Asian Paints up by 2.46%, Coal India up by 2.41% and ACC up by 1.98%. On the flip side, NMDC down by 2.78%, BHEL down by 1.40%, PNB down by 1.31%, ONGC down by 1.25% and Hindalco down by 0.34% were the top losers.

Asian markets were trading mostly in the green; KOSPI Index rose 0.27%, Taiwan Weighted gained 0.03%, Shanghai Composite added 0.12%, Nikkei 225 advanced 0.19% and Hang Seng was up by 0.3%. On the flip side, Straits Times decreased 0.58%, Jakarta Composite shed 0.2% and FTSE Bursa Malaysia KLCI was down by 0.19%.