Bears continue their ride; benchmarks soar higher

Supported by Index heavyweights, benchmarks have hit intra-day’s highs, as bulls relentlessly have continued to basket gains in wake of positive global set-up. Stellar corporate earnings have also shored up the gains of benchmarks, which within minutes of opening were trading near a week’s high level. Both, BSE’s -- Sensex -- and NSE’s -- Nifty -- have pierced through the 17400 and 5250 psychological mark respectively. Soaring over 13 points, HUL, is the biggest gainer. The stocks of India's largest consumer goods maker rose after the company stated that it continues to see strong consumer demand, after beating estimates on Tuesday with a 21 percent rise in quarterly profit, helped by higher volumes and prices. Meanwhile, Bharti Airtel was another prominent gainer. The stock was ringing loud despite weak result. The telecom giant posted a decline of 28.19 percent in consolidated net income  at Rs 1,006 crore for the fourth quarter ended March 31, 2012 hit by higher cost of 3G license fee amortisation, 3G interest costs, forex losses and tax provisions.

On the global front, regional counterparts were trading in fine fettle after strong U.S. factory activity data raised hopes that the world's biggest economy remained on a recovery track. Factory order data released on Wednesday by Asia's key exporters Taiwan and South Korea showed manufacturing activity grew but at a slower pace. While China's HSBC final PMI reading for April came in slightly above last week's flash PMI.

Back on the home turf, sentiment was also glorified after the pace of growth in India's factory sector inched up in April, supported by bulging order books, but slower output growth and increasing price pressures dampened sentiment. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, rose to 54.9 in April from 54.7 in March. Meanwhile, stocks from Consumer Durable, TECk and Information Technology (IT) counters slug hard to lead the gainers list, however, stocks from Auto and Oil & Gas counters were the only laggards. Meanwhile, the broader indices, lacking significant traction, cooled off from their high point. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1358:806, while 100 shares remained unchanged.

The BSE Sensex is currently trading at 17,404.88, up by 86.07 points or 0.50%. The index has touched a high and low of 17,432.33 and 17,367.00 respectively.   There were 20 stocks advancing against 10 declines on the index.

Unlike benchmarks, broader indices have pruned their losses; the BSE Mid cap and Small cap indices surged 0.63% and 0.79% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.90%, TECk up by 1.13%, FMCG up by 1.05%, Information Technology up by 0.95% and Bankex up by 0.93%. While Auto down by 0.77% and Oil and Gas down by 0.24% remained the only losers on the index.

The top gainers on the Sensex were HUL up by 3.13%, TCS up by 2.22%, Bharti Airtel up by 2.16%, DLF up by 1.98% and Jindal Steel up by 1.37%.

On the flip side, Tata Motors down by 2.72%, ONGC down by 1.33%, Bajaj Auto down by 1.29%, Maruti Suzuki down by 1.09% and Tata Power down by 0.43% were the top losers on the Sensex.

Despite a sluggish global market, India’s exports crossed the $300 billion mark and grew $303.7 billion in FY’12 as against $251.1 billion in FY’11, registering a growth of 20.94% y-o-y. However, imports grew by 32.15% to $488.6 billion in March due to rising oil and non-oil imports. As a result the trade deficit or the gap between exports and imports for the FY’12 was estimated at $184.9 billion which was 56% higher than the deficit of $118.6 million during April-March 2010-11.

The large trade deficit is a cause of concern but very little can be done to check it as the increase has largely been on account of large imports of petroleum, gold, silver and coal besides machinery inputs.  Oil imports were up by a whopping 47% and stood at $155.63 billion during 2011-12 over the previous year's $105.9 billion. The non-oil imports grew 26% to $333 billion over the previous year’s $263.8 billion.

For the month of March 2012, exports fell by 5.7% and stood at $28.6 billion ($30.4 billion). Imports during March grew 24% to $42.5 billion ($34.2 billion). The oil imports during March rose by a good 32.45% to $15.83 billion over $11.95 billion in corresponding last year. The non-oil imports also went up by 20% to $26.7 billion in March. The trade figures have come in at worrisome levels especially after the recent revision in outlook on long-term credit rating by Standard and Poor's. However, the rise has been chiefly due to the surge in the ‘relatively inelastic’ oil imports.

Going forward, as per Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO), the deficit can be bridged by increasing exports through market and product diversification. The government can also provide incentives to exporters through policy measures like lowering of interest rates on credit and providing rebate on State and local taxes. Greater marketing support to micro and small enterprises through creation of an Export Development Fund can also help in improving the export figures.  The S&P CNX Nifty is currently trading at 5,274.90, higher by 26.75 points or 0.51%. The index has touched a high and low of 5279.60 and 5254.30 respectively. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were HUL up by 2.80%, Bharti Airtel up by 2.29%, DLF up by 2.01%, TCS up by 1.95% and kotak Bank up by 1.72%.

On the flip side, Tata Motors down by 2.59%, ONGC down by 1.39%, Bajaj Auto down by 1.21%, Maruti Suzuki down by 0.98% and Asian Paints down by 0.73%, were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite surged 1.67%, Hang Seng spurted 1.28%, Jakarta Composite added 0.30%, KLSE Composite rose 0.50%, Nikkei 225 gained 0.57%, Straits Times edged higher by 0.74%, KOSPI Composite climed 0.74% and Taiwan Weighted accumulated 2.26%.