Barometer gauges scoop up additional gains ahead of April’s inflation data

After getting a muted start, barometer gauges have scooped up more gains as emergence of buying by funds and retail investors though selective, at lower levels amid hopes of easing inflation data, to be released today, helped the trading sentiment to improve. The expectation is that India’s inflation rate probably eased only slightly in April, held firm by food prices, underscoring the RBI's stance that it had little room for further rate cuts. The forecast is that the wholesale price index, India's main inflation gauge, rose 6.70 percent in April versus a year ago. Halting four consecutive days losing streak, benchmark 30 share index -Sensex- is currently trading above the 16300 crucial fortresses, albeit with slender gains. The widely followed 50 share index-Nifty, however, has maintained its distance from 5000 bastion. The broader indices, however, relinquished some gains.

On the global front, Asian stocks were trading mixed on Monday after China sought to kick start lending by lowering the share of deposits that banks must hold in reserve, while continued political uncertainty in Europe put pressure on the euro and the risk-sensitive Australian dollar.

Investors were reacting to the decision of China's central bank on Saturday to lower the reserve requirement ratio for banks by 0.5% in order to boost liquidity and aid the slowing economy. The policy move, which takes effect May 18, came just a day after China released a batch of disappointing economic data for April. Industrial production failed to meet expectations, while loan growth was much lower than expected. Meanwhile, the US future indices continued to show a downtick on the screen trade.

Back on the home turf, stocks from high beta Metal counter, coupled with rate sensitive, Auto and Bankex counter managed to sneak way majority gains, however, stocks from Realty, Power and Oil & Gas limited the gains of the bourses. Meanwhile, engineering major, L&T was trading higher over 1.5%. is expected to report around a 1% Y-o-Y decline in its fourth quarter net profit to Rs 1,674 crore from Rs 1,686 crore in the year-ago period. Company’s net sales are seen up 22% at Rs 18,450 crore compared to Rs 15,078 crore. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1281:770, while 104 shares remained unchanged.

The BSE Sensex is currently trading at 16,355.73, up by 62.75 points or 0.39%. The index has touched a high and low of 16,390.33 and 16,298.28 respectively.  There were 21 stocks advancing against 9 declines on the index.

The broader indices continued to trade in green; the BSE Mid cap and Small cap indices were up by 0.08% and 0.38% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 0.76%, Auto up by 0.63%, Bankex up by 0.54%, CD up by 0.51% and HC up by 0.33%. While, Realty down by 0.22%, Power down by 0.11% and Oil and Gas down by 0.05% were the losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 2.56%, Sterlite Industries up by 1.47%, Mahindra & Mahindra up by 1.43%, ICICI Bank up by 1.36% and Jindal Steel up by 1.30%.

On the flip side, ONGC down by 1.55%, DLF down by 0.99%, BHEL down by 0.72%, TCS down by 0.53% and HDFC Bank down by 0.41% were the top losers on the Sensex.

Meanwhile, the government is mulling the probability of giving direct subsidy in respect of kerosene, LPG & fertilizers to farmers. A Task force in this regards was formed under the chairmanship of Nandan Nilekani, Unique Identification Authority of India (UIDAI) to examine and recommend a implemental solution for transfer of subsidy directly to the intended beneficiaries.

The task force has submitted its interim report with respect to fertilizers and has recommended three stage approach with respect to payment of subsidy directly to farmers. The Phase-I is to capture the information on availability of fertilizers at the farm gate level, wherein the availability at the retailer level will be captured.

In Phase-II, which will be implemented after the Phase-I stabilizes; the subsidy is expected to be transferred at the last point sale. Under Phase III, the subsidy is expected to be transferred directly to the intended beneficiary based on AADHAR Numbers.

Further by way of a heavily subsidized MRP, the fertilizer subsidy is transferred to the farmer including the marginal and small ones. As on date, a farmer pays only approximately 50% of the cost of fertilizer as MRP.

The S&P CNX Nifty is currently trading at 4,949.30, higher by 20.40 points or 0.41%. The index has touched a high and low of 4,957.20 and 4,928.85 respectively.  There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were Bajaj Auto up by 2.37% M&M up by 1.95%, Sesa Goa up by 3.18%, Hindalco Industries up by 1.65% and Gail India up by 1.46%. While HCL Technologies down by 1.68%, JP Associates down by 1.67%, ONGC down by 1.34%, Tata Power down by 1.24% and DLF down by 1.15%, were the major losers on the index.

Asian equity indices continued to trade on mixed note; Shanghai Composite was up by 0.28%, Hang Seng gained 0.31%, Nikkei 225 added 0.02% and Straits Times rose 0.41%.

On the flip side, Jakarta Composite declined by 0.47%, KLSE Composite lost 0.14%, KOSPI Composite slid 0.15% and Taiwan Weighted shed 0.41%.