Markets trade near the high points of day on value buying

Indian markets have strengthened further and were trading near the intraday highs, with Sensex and Nifty hovering near the crucial psychological levels of 26700 and 8100 respectively. The bounce back after a slew of slump is broad based and is being supported by value buying at lower levels. Traders seem to have gained courage with report that MSCI Inc. held off from adding mainland Chinese equities to its benchmark indexes. MSCI said China still needs to improve market accessibility and address concerns about the ownership status of mainland shares before they’re eligible for global equity gauges. Though there was some cautiousness too with the weakness in rupee after the US greenback lost some ground overseas, raising the demand. Also, ahead of the IIP data slated to be announced later in the week that may show factory output growth sank to a six-month low in April, dragged by sluggish infrastructure activity and weak exports. Back on street, all the sectoral indices on the BSE were trading with good gains, led by capital goods, realty banking and oil & gas. In scrip specific movement, PVR and DLF were trading higher by 1.5% and 2.5% respectively after  PVR entered into definitive agreements to acquire the cinema exhibition business of DLF Utilities, which is operated under the brand name of ‘DT Cinemas’, on a slump sale basis for an aggregate consideration of approximately Rs 500 crore.

The BSE Sensex is currently trading at 26735.74, up by 254.49 points or 0.96% after trading in a range of 26493.29 and 26779.79. 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 1.18%, while Small cap index gained 1.05%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.23%, Realty up by 1.73%, Consumer Durables up by 1.34%, INFRA up by 1.28%, Bankex up by 1.26%

The top gainers on the Sensex were BHEL up by 3.17%, Larsen & Toubro up by 2.69%, Reliance Industries up by 2.04%, Bharti Airtel up by 2.02% and ICICI Bank up by 1.83%. On the flip side, Vedanta down by 0.66%, Hindustan Unilever down by 0.37% and ITC down by 0.07% were the top losers.

Meanwhile, in a setback to the oil ministry and oil majors, the Finance Ministry has returned an Oil Ministry proposal to allow market price for part of the natural gas produced by firms like ONGC and Reliance Industries from difficult fields. In October last year, while approving a new gas pricing formula based on international hub rates, the government had decided that new gas discoveries in deep-water, ultra-deep sea or high-temperature and high-pressure fields will be given a premium over and above the approved price.

The Oil Ministry was asked to determine the premium to be paid to discoveries made post October 2014. Based on a recommendation from its upstream technical arm, the ministry proposed to allow a fixed percentage of natural gas produced from difficult fields to be sold at market price and the remaining as per the approved price.

The Finance Ministry earlier stated that the premium should be consistent with the October 2014 Cabinet decision, following which the Oil Ministry resubmitted the proposal explaining that the premium proposed was consistent with the October 2014 decision of the Cabinet Committee on Economic Affairs (CCEA).

Now it has been reported that Finance Ministry has made certain observations on the proposal and returned it without approval. As per mechanism approved in October 2014, price of domestically produced natural gas is to be revised every six months using weighted average or rates prevalent in gas-surplus economies of US/Mexico, Canada and Russia.

The CNX Nifty is currently trading at 8096.95, up by 74.55 points or 0.93% after trading in a range of 8023.80 and 8110.75. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 4.71%, BHEL up by 3.15%, Larsen & Toubro up by 2.71%, Indusind Bank up by 2.31% and HCL Tech. up by 2.15%. On the flip side, Ambuja Cement down by 0.82%, Vedanta down by 0.66%, Hindustan Unilever down by 0.40%, Power Grid Corpn down by 0.37% and ACC down by 0.22% were the top losers.

Asian markets were trading mixed, FTSE Bursa Malaysia KLCI was up by 7.32 points or 0.42% to 1,736.37, Straits Times gained 37.61 points or 1.14% to 3,332.74, Hang Seng was higher by 47.97 points or 0.18% to 27,037.49, Jakarta Composite surged by 65.9 points or 1.34% to 4,965.78 and Taiwan Weighted added 115.12 points or 1.25% to 9,306.99.

On the other hand, Nikkei 225 was down by 26.5 points or 0.13% to 20,069.80, KOSPI Index lost 11.92 points or 0.58% to 2,052.11 and Shanghai Composite declined by 9.51 points or 0.19% to 5,104.02.