Benchmarks extend gains; trade near intra-day high levels

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high levels on the back of value-buying by retail investors in recently beaten-down stocks. Investors got some confidents with the weaker-than-expected U.S. jobs report fanned expectations that the Federal Reserve would have to hike interest rates at a very slow pace. Besides, appreciation in Indian rupee against dollar too supported sentiments. Indian rupee strengthened by 7 paise to 66.47 against the US dollar in early trade on increased selling of the American currency by banks and exporters. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 27.71 crore on May 6, 2016. However, gains remained capped with a private survey said that Indian economy has been losing momentum since middle of financial year 2014-15. The report termed the state level GDP data as “dodgy” and said that Indian economy is undergoing a pronounced slowdown.

On the global front, most of the Asian markets edged lower on Monday as investors turned jittery after a disappointing U.S. jobs report raised questions about the underlying strength of the world’s biggest economy, while crude oil prices soared on supply woes stemming from wildfires in Canada. Shanghai stocks declined by over two percent after data released over the weekend showed Chinese exports fell 1.8 per cent in April, while Japan’s Nikkei bucked the trend and rose 0.7 per cent as the yen’s recent surge appeared to halt for now. Meanwhile, US shares posted modest gains on Friday, mainly as the weaker-than-expected U.S. jobs report fanned expectations that the Federal Reserve would have to hike interest rates at a very slow pace.

Back home, all the BSE sectoral indices were trading in the green. Among them, Capital Goods index gained the most by 1.7 per cent, followed by Bankex 1.58 per cent, FMCG 1.33 per cent and Realty 1.27 per cent. In scrip specific development, Shares of Hester Biosciences have surged 19% to Rs 630 after the company reported 56% year on year (YoY) growth in net profit at Rs 55 crore for the quarter ended March 31, 2016 (Q4FY16), on back of healthy operational income. Furthermore, Astral Poly Technik has gained after the company announced that its UK based subsidiary - Seal It Services has extended its portfolio with the creation of a new company in the United States.

The market breadth on BSE was positive, out of 2245 stocks traded, 1490 stocks advanced, while 650 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25574.65, up by 346.15 points or 1.37% after trading in a range of 25302.86 and 25591.40. 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 0.89%, while Small cap index up by 0.85%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.70%, Bankex up by 1.58%, FMCG up by 1.33%, Realty up by 1.27% and Auto up by 1.06%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Larsen & Toubro up by 2.64%, HDFC up by 2.33%, Bajaj Auto up by 2.17%, ICICI Bank up by 2.09% and Asian Paints up by 2.07%. On the flip side, Dr. Reddys Lab down by 0.85%, Cipla down by 0.22% and Tata Motors down by 0.03% were the top losers.

Meanwhile, the Government has suffered loss of Rs 1,60,737.57 crore (12.69 percent of original cost) from their original estimates in project cost due to cost overruns in as many as 238 infrastructure projects monitored by the Statistics Ministry.

As per the report of Statistics Ministry, the reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, delay in forest clearance and delay in supply of equipment. The other such reasons are fund constraints, geological surprises, problems in equipment erection, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist problems, court cases, contractual issues etc.

The Statistics Ministry is monitoring 1,071 infrastructure projects worth Rs 150 crore or above each in various sectors such as power, railways and road. The report further highlighted that, during February 2016 out of 1071 projects, 238 projects reported cost overruns and 341 projects reported time delays. Furthermore, expenditure incurred on these projects till February 2016 was Rs 5, 66,058.05 crore, which is 39.67 percent of the anticipated cost of the projects.

The data further showed that in April 2015, out of 758 projects on the monitor of Statistics Ministry, 231 projects reported cost overruns and 323 projects reported time overruns total, it further stated that the original cost of implementation of 1,071 projects was Rs 12,66,248.36 crore and their anticipated completion cost is likely to be Rs 14,26,985.93 crore, which reflects overall cost overruns of Rs 1,60,737.57 crore.

The CNX Nifty is currently trading at 7836.25, up by 102.80 points or 1.33% after trading in a range of 7753.55 and 7837.00. There were 48 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.83%, Larsen & Toubro up by 2.59%, Yes Bank up by 2.48%, HDFC up by 2.32% and Ultratech Cement up by 2.29%. On the flip side, Dr. Reddys Lab down by 1.09%, Cipla down by 0.41% and Tata Motors down by 0.05% were the top losers.

Asian markets were trading in red, Shanghai Composite was down by 2.4%, Jakarta Composite down by 1.15%, KOSPI Index down by 0.58%, FTSE Bursa Malaysia KLCI down by 0.36% and Taiwan Weighted was down by 0.3%. On the flip side, Hang Seng was up by 0.36% and Nikkei 225 was up by 0.72%.