Benchmarks magnify gains; Sensex above 26,500 mark

Extending their early gains, Indian equity markets continued to trade with vigor on sustained buying in frontline blue chip counters amid firm global cues. At present, Sensex and Nifty were trading above the crucial 26,500 and 8,100 levels respectively, with gains of around a percentage point. Sentiments got a boost with Commerce Minister Nirmala Sitharaman’s statement that it is 'possible' for India to reach top 50 in the World Bank's Doing Business ranking in the next few years.  India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from 2014, according to the latest World Bank's Doing Business report. Besides, rise in crude oil prices, expectation of above normal monsoon, appreciation in the rupee against dollar and better than expected corporate results this quarter also boosted sentiments. Staying with its rising streak for the third day, Indian rupee appreciated 13 paise to 67.04 against the dollar in early trade on increased selling of the US currency by exporters and banks amid higher foreign inflows. Market participants got some confidence with the private repot that the India's economic growth rate will slowly accelerate to 8% by fiscal year ending March 2019, driven by the gradual implementation of structural reforms, higher disposable income and improvement in economic activity. The report further highlights that India's GDP to grow 7.5% in fiscal year ending March 2016 and improve to 7.7% in the current fiscal year and further to 7.9% in the fiscal year ending March 2018.  However, some investors remained nervous with the report the Food price inflation will remain at current levels or rise further even if monsoon this year is normal. According to the report, rains have little effect on food prices and it is rural wages, minimum support prices and global trends that impact prices in a bigger way.

On the global front, Asian stock markets were mostly trading higher on Friday as investors maintained a cautiously optimistic outlook while they waited for U.S. economic data and remarks by the Fed chief. The Fed has already signaled that it will raise rates again at its next meeting in June if economic conditions continue to improve, another step in dialing back loose the loose monetary police that has supported global stock markets. Rising oil prices-Brent crude has gained about 2.1% this week-fueled some of that rally. However, stocks in Hong Kong and mainland China struggled after disappointing data from the world's second-biggest economy.

Back home, stocks from Oil & Gas, Realty and PSU were supporting the markets’ uptrend, while those from FMCG counter was adding to the underlying cautious undertone. In scrip specific development, shares of Finolex Cables have rallied after the company reported a robust 77% year on year (YoY) growth in net profit at Rs 83 crore, on back of strong operational performance. Furthermore, Gujarat Alkalies and Chemicals has surged after the company reported more than doubled EBITD (earnings before interest taxes and depreciation) at Rs 133 crore for the quarter ended March 2016 (Q4FY16) against Rs 52 crore in a year ago quarter.

The market breadth on BSE was positive, out of 2166 stocks traded, 1346 stocks advanced, while 695 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26581.64, up by 214.96 points or 0.82% after trading in a range of 26405.28 and 26583.07. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.44%, while Small cap index up by 0.87%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 3.30%, Realty up by 2.10%, PSU up by 1.80%, Power up by 1.07% and Bankex up by 1.03%, while FMCG down by 0.30% was the only losing index on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.19%, Adani Ports &Special up by 3.30%, Lupin up by 3.19%, ICICI Bank up by 2.39% and SBI up by 2.31%. On the flip side, ITC down by 1.17%, Larsen & Toubro down by 0.52%, NTPC down by 0.39%, Tata Motors down by 0.33% and ONGC down by 0.30% were the top losers.

Meanwhile, on the eve of Modi government completing two years in office, Reserve Bank of India (RBI) governor Raghuram Rajan has said that Modi government’s reforms have led to macro stability in the country. He elaborated that while the eyes of the world have been on the Goods and Services Tax (GST) bill, a host of other significant reforms have been taking place in India, leading to macro-economic stability.

Rajan said that the government has embarked on ambitious structural reforms to revive growth, including significant efforts in the agricultural sector to boost productivity through irrigation, insurance, and access to markets, a strong push to deregulate business, especially for startups, important efforts to improve the governance of public sector banks and to resolve distress in power distribution companies, and an immense effort to expand financial services to the excluded through the provision of bank accounts and direct benefit transfers.

The RBI governor stressed that there is no substitute for good policy and said that the government and the RBI had contained inflation through a combination of better food management, a new inflation framework and calibrated monetary policies and, of course, the good luck of lower energy prices.

Rajan speaking at SaarcFinance, a symposium of central bank governors, on 'Impact of Chinese slowdown on Saarc region and policy options', termed a sharp slowdown in China as a “significant risk” for the global economy and the South Asian Association for Regional Cooperation (Saarc) region in particular. He also said that India’s swap arrangement with a number of Saarc countries had been drawn on by some to alleviate short-term foreign exchange needs, and had hopefully been helpful.

The CNX Nifty is currently trading at 8139.50, up by 69.85 points or 0.87% after trading in a range of 8077.05 and 8141.30. There were 42 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were BPCL up by 9.18%, Sun Pharma up by 4.46%, Adani Ports &Special up by 3.38%, Aurobindo Pharma up by 3.24% and Lupin up by 3.10%. On the flip side, ITC down by 1.21%, Tech Mahindra down by 0.89%, Larsen & Toubro down by 0.62%, NTPC down by 0.57% and Bharti Infratel down by 0.33% were the top losers.

Asian markets were trading mostly in red, Jakarta Composite was up by 0.17%, FTSE Bursa Malaysia KLCI up by 0.12%, KOSPI Index up by 0.66%, Taiwan Weighted up by 0.76% and Nikkei 225 was up by 0.4%. On the flip side, Hang Seng was down by 0.11% and Shanghai Composite was down by 0.33%.