Indian equities continue firm trade; Realty leads the rally

Indian equities gain strength to continue its firm trade on back of strong buying in frontline counters in the late afternoon session. Sentiments remained sanguine since the start as domestic markets climbed in tandem with their regional peers as market participants remained influenced by sharp rally overnight in US markets. Traders were seen piling up position in Realty, Bankex and Power sector while selling was witnessed in Consumer Durables sector. Meanwhile, Prime Minister Manmohan Singh’s effort to push for infrastructure led economic recovery too spurred some positive vibes that the government is taking serious steps to dispel perceptions that the government is in policy paralysis. The rate sensitive Banking counter witnessed hefty buying in the session on increasing hopes of monetary easing by RBI in its forthcoming mid-quarter policy review on June 18. In the scrip specific development, Aurobindo Pharma was seen trading firm in green on reports that it has signed drug supply pact with an Oman-based pharma retail company Khimji Pharma. Industry heavyweight, RIL was trading in green after Chairman Mukesh Ambani stated that the company would invest Rs 1 lakh crore across business over the next four years.

On the global front, the Asian markets were trading in green barring Shanghai Composite and Straits Times while the European markets were too trading in green on optimistic note. The sentiments were optimistic since German and European Union officials firmed up efforts to rescue Spain's troubled banks which eased concerns to some extent. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,000 and 16,600 levels respectively. The market breadth on BSE was positive in the ratio of 1409:1105 while 118 scrips remained unchanged.

The BSE Sensex is currently trading at 16,653.87 up by 199.57 points or 1.21% after trading as high as 16,661.14 and as low as 16,519.89. There were 26 stocks advancing against 4 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index advanced 0.62% while Small cap index rose 0.53%.

On the BSE sectoral space, Realty up 2.07%, Bankex up 1.91%, Power up 1.34%, Metal up 1.33% and Capital Goods up 1.22% were the major gainers, while Consumer Durables down 0.48 was the only laggard in the space.

Sterlite Industries up 3.47%, DLF up 3.40%, Maruti Suzuki up 2.89%, HDFC Bank up 2.80% and Hero MotoCorp up 2.74% were the major gainers on the Sensex, while Wipro down 1.90%, TCS down 1.14%, Hindalco Industries down 0.54% and GAIL India down 0.37% were the major losers in the index.

Meanwhile, in order to bring in more activities under the tax bracket, the government has extended the definition of services under which almost all services will be taxed except funerals, betting and gambling with effect from July 01, 2012. Currently, under the positive list 119 services are taxed whereas 17 services are under negative list.

Services under the negative list include entry to amusement parks, betting, gambling, lottery, metered taxis, auto rickshaws, transport of goods, electricity transmission, school, university education and approved vocational courses. On the other hand, services which will attract tax are coaching classes, training institutions, first class and air-conditioned rail coach travels.

The negative list was announced by Finance Minister Pranab Mukherjee in the Union Budget where the rate of service tax was also increased from 10% to 12%, with the government targeting to collect Rs 1.24 lakh crore in 2012-13. The services sector account for about 60% of the country's GDP.

The S&P CNX Nifty is currently trading at 5,045.25, higher by 48.15 points or 0.96% after trading as high as 5,054.20 and as low as 5,007.75. There were 34 stocks advancing against 16 declines on the index.

The top gainers on the Nifty were Sterlite Industries up 3.42%, JP Associates up 3.10%, DLF up 3.06%, Maruti Suzuki up 2.97% and Sesa Goa up 2.87%.

Wipro down 2.64%, Ambuja Cement down 1.24%, HCL Tech down 1.20%, Grasim down 1.05% and Ranbaxy down 0.98% were the major losers on the index.

In the Asian space, Hang Seng climbed 0.85%, Jakarta Composite added 0.08%, KLSE Composite advanced 0.26%, Nikkei 225 soared 1.24%, KOSPI Composite Index spurted 2.56% and Taiwan Weighted ascended 0.34%.

On the flipside Shanghai Composite declined 0.71% and Straits Times Index dropped 0.16%.

The European markets were trading in green, France’s CAC 40 climbed 0.44%, Germany’s DAX advanced 0.37% and the United Kingdom’s FTSE 100 surged 0.34%.