Benchmarks extend gains; trade near intra-day high

Indian equity benchmarks extended early gains to continue firm trade in the afternoon session, hovering near intra-day high level, on account of buying in frontline blue chip counters, with the Sensex nearing 31,000-mark, while the Nifty was placed well above 9550-mark. Sentiments remained upbeat with private weather forecaster Skymet’s statement that the increase in pre-monsoon showers across India is hinting at the arrival of monsoon 2017, which is not very far away. The weather forecasting agency predicted that monsoon will make an onset over Kerala by May 29, with a margin of error of three days. Adding the optimism among investors, a private report stated that India maintained its number one position of being world’s top most greenfield FDI investment destination for the second year in a row, attracting $62.3 billion in 2016. Besides, encouraging earnings by some blue chip companies along with appreciation in Indian rupee against dollars too aided the sentiments. In scrip specific development, Jaiprakash Power Ventures was up by over five percent after successfully commencing commercial operations at third Unit of 660 MW Bara Supercritical Thermal Power Project (BSTPP) on May 26, 2017.

On the global front, Asian markets were trading mostly in red, as investors weighed Wall Street's latest gains on strong earnings report against the latest oil production cut, which dragged down crude prices and commodity shares. The BSE Sensex is currently trading at 30960.70, up by 210.67 points or 0.69% after trading in a range of 30745.57 and 30975.52. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.01%, while Small cap index was up by 1.27%.

The top gaining sectoral indices on the BSE were Metal up by 3.41%, Basic Materials up by 1.89%, Industrials up by 1.52%, Consumer Durables up by 1.22% and Auto up by 1.14%, while Healthcare down by 0.71%, Oil & Gas down by 0.12% and PSU down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.87%, Reliance Industries up by 2.59%, Adani Ports &SEZ up by 2.29%, Asian Paints up by 2.14% and Power Grid up by 1.64%. On the flip side, Sun Pharma down by 3.27%, Cipla down by 2.95%, TCS down by 1.23%, Lupin down by 1.03% and SBI down by 0.98% were the top losers.

Meanwhile, Indian economy is expected to rise marginally in the fourth quarter (Q4) of financial year (FY) 2017. Credit rating agency, ICRA in its latest report has said that the gross domestic product (GDP) and gross value added (GVA) of the country may expand to 7.1 per cent and 6.9 per cent, respectively during Q4 of FY17, up from the preceding quarter’s estimates of 7 per cent and 6.6 per cent, respectively.

The rating agency though said that the gradual remonetisation would result in some improvement in Q4 estimates relative to Q3 FY2017. It noted that when compared on a year-on-year basis, the pace of growth of GDP and GVA in Q4 is expected to be slower to Q4 FY2016 of 8.4 percent and 8.1 percent, respectively. The report further said that the construction sector will contract by 1 per cent on a GVA basis due to the noteban.

The agency said that the 6.9 per cent GVA growth for the quarter rests on a 8.8 per cent Y-o-Y growth in services, and a moderate rise of 5.4 per cent and 4 per cent, respectively, in industry and agriculture, forestry and fishing. It expects healthy growth in service sector on the back of double-digit rise in sub-sectors like air cargo traffic, bank deposits, corporate bonds, commercial paper and Centre’s non-interest non-subsidy revenue expenditure.

It also said that the new Wholesale Price Index (WPI) and Index of Industrial Production (IIP) series, could lead to revisions in GDP and GVA levels and growth rates from FY2013 onward could undergo revisions, at constant prices, stating that the growth rate for FY17 will differ materially from the second advance estimates released by the CSO in February 2017.

The CNX Nifty is currently trading at 9567.90, up by 58.15 points or 0.61% after trading in a range of 9495.40 and 9572.05. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 5.09%, Hindalco up by 4.75%, Vedanta up by 4.39%, Reliance Industries up by 2.58% and Adani Ports &SEZ up by 2.36%. On the flip side, Indian Oil Corp. down by 4.33%, Sun Pharma down by 3.25%, Cipla down by 2.98%, BPCL down by 2.01% and Lupin down by 1.55% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 126.29 points or 0.64% to 19,686.84, Hang Seng was down by 12 points or 0.05% to 25,618.78, Taiwan Weighted declined 6.54 points or 0.06% to 10,101.95 and FTSE Bursa Malaysia KLCI shed 0.22 points or 0.01% to 1,773.74.

On the flip side, Shanghai Composite increased 3.41 points or 0.11% to 3,111.24, Jakarta Composite rose 11.74 points or 0.21% to 5,715.17 and KOSPI Index was up by 12.37 points or 0.53% to 2,355.30.