Indian equities continue firm trade in green

Indian equities continued its firm trade in green in the late afternoon session. The mood in the market continued to remain on optimistic note as investors were encouraged by comments from Finance Minister Pranab Mukherjee over the weekend that to help revive market sentiment, the government in consultation with the RBI, will announce a clutch of measures on June 25, 2012. Traders were seen piling up position in Consumer Durables, Bankex and Realty sector while selling was witnessed in IT and TECk sector. Hectic activity has been noticed in cement stocks attracting lot of volumes after the CCI levied a penalty of nearly Rs 6,300 crore on 11 cement companies. Moreover, telecom stocks were under pressure as the much-awaited EGoM meeting headed by Finance Minister Pranab Mukherjee, to finalise a base price for sale of spectrum, was deferred indefinitely. Aviation stocks like Kingfisher Airline, Jet Airways and Spicejet were seen trading firm as crude oil prices hovered below $80 mark.

On the global front, the Asian markets were trading in red barring KLSE Composite while the European markets were too trading in red on pessimistic note. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,150 and 17,000 levels respectively. The market breadth on BSE was positive in the ratio of 1638:982 while 115 scrips remained unchanged.

The BSE Sensex is currently trading at 17,087.16 up by 114.65 points or 0.68% after trading as high of 17,131.15 and as low of 17,020.70. There were 24 stocks advancing against 6 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index ascended 0.75% while Small cap index was up 0.81%.

On the BSE sectoral space, Consumer Durables up 1.06%, Bankex up 1.04%, Realty up 0.99%, Capital Goods up 0.99% and Metal up 0.83% remained the top gainers, while IT down 0.20% and TECk down 0.02% were the only laggards in the space.

Maruti Suzuki up 2.65%, Tata Power up 2.17%, GAIL India up 2.10%, ICICI Bank up 1.93% and Coal India up 1.45% were the major gainers on the Sensex, while Hindalco Industries down 0.77%, TCS down 0.70%, Cipla down 0.64%, ONGC down 0.61% and Wipro down 0.27% were the major losers in the index.

Meanwhile, at a time when global demand for Indian merchandise is showing signs of weakening, the Ministry of Commerce and Industry is busy chalking out fresh steps for achieving exports target of $500 billion by the end of 2013-14. The government had in May last year prepared a strategy paper on doubling exports in three years from $251 billion in 2010-11, however the global economic situation worsened a great deal since then, which has prompted the Commerce Ministry to give a re-look to its plan of action.

Trimming down the costs of transaction for exporters and making sure that they do not face non-tariff barriers in the importing countries would be some of the many important steps that the ministry is believed to be working on and the officials are likely to take around a month to prepare the complete action plan. With the lingering growth concerns over the traditional US and European markets, the ministry has been effortlessly trying to diversify India’s export basket to Latin American, African and Asian markets.

Despite the turmoil in the European markets and economic slowdown in world’s largest US economy, the African continent along with Asia showed resilience. Hence, the Commerce Ministry giving due importance to the African continent, which is growing by about 4.5 percent per annum, has identified around 25 African nations, including South Africa, Nigeria and Egypt to achieve increased shipments for about 200 Indian products including pharmaceuticals, fruits and vegetables and textiles.

By figuring out, which product has major demand in which particular nation and what type of challenges are faced by exporters, the ministry is trying to create a matrix. A final strategy will only take shape after the government-industry interface in which government will hold consultations with exporters and understand their views and opinions. Although, India's total merchandise exports to this African region stood only at $16.28 billion in 2010-11, huge demand is there for Indian goods.

Furthermore, Indian products are also gaining presence in Latin American and Asian markets, which are emerging as major export destination for domestic merchandize after demand slowdown in the traditional markets of Europe and the US. India's exports grew by 21 percent to $303.7 billion in 2011-12. However, in April, the shipments declined by 4.16 percent year-on-year.

The S&P CNX Nifty is currently trading at 5,179.30, higher by 33.25 points or 0.65% after trading as high as 5,194.60 and as low as 5,158.45. There were 35 stocks advancing against 14 declines while 1 stock remained unchanged on the index.

The top gainers on the Nifty were Maruti Suzuki up 2.58%, GAIL India up 2.28%, Tata Power up 2.17%, ICICI Bank up 1.80% and Cairn India up 1.66%.

HCL Tech down 1.04%, Hindalco Industries down 0.77%, ONGC down 0.72%, BPCL down 0.69% and Cipla down 0.57% were the major losers on the index.

In the Asian space, Shanghai Composite declined 1.63%, Hang Seng dropped 0.51%, Jakarta Composite slipped 0.91%, Nikkei 225 dipped 0.72%, Straits Times Index contracted 0.52%, KOSPI Composite Index crumbled 1.19% and Taiwan Weighted was down by 0.77%. However, KLSE Composite ascended 0.12% remained the lone gainer.

The European markets were trading in red, with France’s CAC 40 dropped 1.07%, Germany’s DAX descended 1.36% and the United Kingdom’s FTSE 100 slipped 0.54%.