Benchmarks continue firm trade in late morning session

After getting a gap up start, Indian benchmark indices continued to trade firm in late morning session on account of renewed buying by domestic investors and foreign funds ahead of IIP and inflation data to be released later in the day. Sentiments got a boost with the report that prospects of a good monsoon have improved as the crucial weather system is likely to hit the Kerala coast on the normal date of June 1, while the risk of a lingering El Nino, which disrupts rainfall in the region, has been eliminated by favourable changes in ocean temperatures. This is the good news for farmers and policy makers, as vast areas of the country suffered a drought for two years, which has hit farm output and dried up crucial reservoirs, because El Nino continued to haunt South Asian weather since last year. Some support also came with report Indirect tax collections for the month of April 2016 was Rs 64,394 crore registering a growth of 41.8 per cent as compared to Rs 45,417 crore collected during the same period previous year. However, investors remained agonize with the report that foreign portfolio investors (FPIs) sold shares worth a net Rs 362.19 crore on May 11, 2016. 

On the global front, Asian stocks fell, with the regional benchmark index heading for its first decline in three days, on disappointment over weak earnings in Japan and worries about the health of U.S. consumer spending. Chinese stocks edged lower, led by energy and health-care companies, as investors awaited the release of economic data. Meanwhile, a steady sell-off on Wall Street that accelerated at the close on Wednesday erased nearly all of the sizable gains from the previous day's session, as disappointing earnings from Disney and a slump among retailers led to disquiet among investors.

Back home, buying was witnessed across the board as not a single indices trading in negative territory.  Among the gainers, Realty counter remained a top gainer, which surged by over a percent, followed by Banking stocks, which rallied after the Rajya Sabha passed the Insolvency and Bankruptcy code Bill, enabling a single law to deal with distressed companies, their promoters, creditors, employees and other stake holders for the first time in India. Some buying also witnessed in telecom stocks such as Bharti Airtel, Idea Cellular and Reliance Communications after the Supreme Court struck down compensation policy for call drops levied by the Telecom Regulatory Authority of India (TRAI). In specific scrip specific development, shares of Asian Paints have surged after the company reported 20% year on year (YoY) jump in its consolidated net profit at Rs 409 crore for the quarter ended March 31, 2016 (Q4FY16), on the back of healthy operational income. Also, Tyche Industries has rallied after the small-sized pharmaceuticals company received the US Food and Drug Administration’s (FDA’s) approval for a plant in Andhra Pradesh.

The market breadth on BSE was positive, out of 2177 stocks traded, 1398 stocks advanced, while 666 stocks declined on the BSE.

The BSE Sensex is currently trading at 25731.07, up by 134.05 points or 0.52% after trading in a range of 25676.32 and 25827.03. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.44%, while Small cap index up by 0.71%.

The top gaining sectoral indices on the BSE were Realty up by 1.32%, Bankex up by 0.96%, Power up by 0.82%, Consumer Durables up by 0.78% and IT up by 0.69%, while there were no losing indices on BSE sectoral indices.

The top gainers on the Sensex were ICICI Bank up by 2.57%, Asian Paints up by 2.18%, Adani Ports &Special up by 1.53%, TCS up by 1.36% and Tata Motors up by 1.18%. On the flip side, Hindustan Unilever down by 1.05%, Bharti Airtel down by 0.40%, Tata Steel down by 0.23% and Maruti Suzuki down by 0.19% were the top losers.

Meanwhile, Power and Coal Minister Piyush Goyal has said that the development of the smart cities or towns need to be done smartly and the work will have to be customized to the Indian context while leveraging on economies of scale, to make the requisite technology affordable . While addressing Smart Cities India Expo, he said that the concept of the smart city should be practical, feasible and affordable, which can be planned, discussed and then implemented if it were to be scaled up and leave an impact in the country.

Goyal said that “Pilot projects are not the right way to go about implementation as it is time consuming and has a high chance of failure. We need to look at economies of scale and faster implementation”. He added that the power of economies of scale, the power of leveraging billion plus aspiring individuals, ensuring affordability to make a programme self sustainable, practical application in the Indian context are the keys to the implementation of smart cities.

He said that we got to think smart when we think of smart cities or smart technologies playing a role in India.  Citing an example of energy efficiency programme, the minister said that 83% cost reduction in LED bulbs was possible due to massive roll out of programme and the people of India will save 6.5 billion dollars every year in their electricity bills.  The centre is running a 770-million LED bulb programme, which will cost less than $1 billion with no government investment.

The CNX Nifty is currently trading at 7890.45, up by 41.60 points or 0.53% after trading in a range of 7871.45 and 7916.05. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 2.66%, Asian Paints up by 2.13%, Adani Ports &Special up by 1.71%, Power Grid up by 1.66% and Tech Mahindra up by 1.55%. On the flip side, Hindustan Unilever down by 1.11%, Zee Entertainment down by 0.90%, Aurobindo Pharma down by 0.80%, Tata Steel down by 0.49% and Maruti Suzuki down by 0.35% were the top losers.

Asian markets were trading mostly in red, Hang Seng was down by 0.37%, Nikkei 225 down by 0.17%, Shanghai Composite down by 0.37%, Taiwan Weighted down by 0.27% and KOSPI Index down by 0.01%. On the flip side, Jakarta Composite was up by 0.39% and FTSE Bursa Malaysia KLCI was up by 0.02%.