Sensex, Nifty continue to trade in green

Indian benchmarks have continued to trade in the green holding on to their gains through the late morning session as stocks of Capital Goods, power, banking and PSUs sectors surged on increased buying by funds and retailers, fuelled by lower-than-expected wholesale inflation and falling global crude prices. Sentiments got some support on fresh buying by funds and retailers on hopes of a rate cut by RBI after inflation based on the Wholesale Price Index (WPI) fell to over three-year low of 5.96 per cent in March and falling global crude prices.

On the global front, Asian markets were a mixed bag after China’s economic recovery stumbled unexpectedly in the first three months of 2013. The world's second-biggest economy grew 7.7% in the first quarter from a year ago, slower than the 7.9% hit in the fourth quarter of 2012.

Back home, the traders were seen piling up positions in Capital Goods, Bankex and Power, while selling was seen in IT, Metal and Teck sector. In scrip specific development, Stocks of gold finance and jeweller companies remained under pressure on rising risk of default due to persistent fall in the precious metal prices.

In scrip specific actions, Indian oil marketing companies such as Hindustan Petroleum Corp gain for a second day on hopes a slump in crude prices would lower the cost of under-recoveries. Tata Power surged after the country's apex power sector regulator offered a bailout package to the power company for the electricity generated from its imported coal-based Mundra plant in Gujarat. ONGC soared after the state-owned company approached the Ministry of Environment and Forest (MoEF) for the permission to drill 24 development wells and to establish production facility in Krishna-Godavari basin.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 5,600 and 18,500 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in ratio of 938: 669.

The BSE Sensex is currently trading at 18543.50, up by 185.70 points or 1.01% after trading in a range of 18553.91 and 18325.73. There were 25 stocks advancing against 5 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.43% and Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.62%, Bankex up by 1.60%, Power up by 1.57%, Auto up by 1.50% and PSU up by 0.89% while, IT down by 0.54%, Metal down by 0.26%, Teck down by 0.24%, and Consumer Durables down by 0.07% were the losers on the BSE.

The top gainers on the Sensex were Tata Power up by 3.45%, Hero MotoCorp up by 2.95%, HDFC up by 2.64%, L&T up by 2.54% and Maruti Suzuki up by 2.374%.

On the flip side, Sterlite Industries was down by 1.62%, Infosys was down by 1.08%, TCS was down by 0.43%, Hindalco Industries was down by 0.27% and Cipla was down by 0.19% were the  losers on the Sensex.

Meanwhile, with the wholesale price index (WPI) declining to below 6 percent in March, Planning Commission Deputy Chairman Montek Singh Ahluwalia said the price situation would improve further in the coming months as inflation behavior is consistent and it is slowly coming under control.

Inflation based on wholesale price index eased to a 40-month low, at 5.96 percent for the month of March as compared to 6.84 percent for the previous month of February. Declining price of vegetables pulled down the inflation in March. With this lower inflation numbers, investors’ hopes that the central bank would further cut interest rates in its next monetary policy scheduled on May 3 to spur investment.

As per Ahluwalia, the monthly numbers of inflation can jump around but in a gradual way inflationary pressure is coming down.  However, WPI for January was revised upwards to 7.31%, from 6.62% as per provisional estimates. On the revision of January numbers, he said ‘if January number has been revised upward then the extent of slowing down of inflation is greater than the unrevised numbers show, but I don't think one month number makes a difference’.

The CNX Nifty is currently trading at 5,625.20 up by 56.80 points or 1.02% after trading in a range of 5,629.05 and 5,555.85.

There were 39 stocks advancing against 11 declines on the index. The top gainers of the Nifty were Tata Power up by 3.30%, Hero Moto Co up by 2.75%, HDFC up by 2.65%, Maruti Suzuki up by 2.59%, and L&T up by 2.46%.

On the flip side, Cairn down by 1.40%, Infosys down by 1.33%, Ambuja Cements down by 1.16%, ACC down by 1.10%, and Lupin down by 0.92%, were the major losers on the index.

Asian equity indices were a mixed bag; Jakarta Composite rose 31.38 points or 0.64% to 4,928.97, Straits Times added 1.90 points or 0.07% to 3,286.60, Taiwan Weighted was up by 27.97 points or 0.36% to 7,792.40 and KOSPI Composite was up by 0.48 points or 0.02% to 1,920.98.

On the flip side, Shanghai Composite declined 9.40 points or 0.43% to 2,172.54, Hang Seng dropped 153.06 points or 0.70% to 21,619.61, KLSE Composite slipped 3.72 points or 0.22% to 1,694.05, Nikkei 225 decreased 37.28 points or 0.27% to 13,223.51.