Firm trade prevails; Nifty above 5,650 mark

Indian equity markets continued its firm trade hovering near the highest point of the day in the late afternoon session on account of buying in frontline counters. Investors took cues from the sharp slump in gold and crude oil prices as the steep fall will help contain India’s widening current account deficit. The sentiments were also on optimistic mood on reports that the Confederation of Indian Industry (CII) pressed for a 100 basis point cut in interest rate by the RBI saying that it will push economic growth in the country. Due to concerns over high inflation, the RBI had been keeping a tight leash on its monetary policy but yesterday’s data showed inflation to be at 40-month low. Traders were seen piling some position in Bankex, Auto and Realty sector stocks while selling was witnessed in IT, Metal and TECK sector stock. In scrip specific development, Maruti Suzuki India was trading in green after foreign research house UBS recommended a buy rating on the stock. ITC was trading in green on reports that it has increased prices of some of its cigarette brands. Kingfisher Airlines was locked at the lower circuit limit on fears that the aviation regulator may not allow the carrier to restart operations. The airline had submitted a revival plan to the DGCA last week but it did not yield any results because officials found the plan inconclusive. Even its lenders were not satisfied with the plan it showed them recently.

On the global front, the Asian markets were trading in green barring Hang Seng and Nikkei 225 while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,650 and 18,600 levels respectively. The market breadth on BSE was positive in the ratio of 1168:987 while 137 scrips remain unchanged.

The BSE Sensex is currently trading at 18,680.16, up by 322.36 points or 1.76% after trading in a range of 18,680.316 and 18,325.73. There were 26 stocks advancing against 4 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.70% and 0.40% respectively.

The top gaining sectoral indices on the BSE were, Bankex up by 2.53%, Auto up by 2.09%, Realty up by 2.03%, Power up by 2.02% and Capital Goods up by 1.80%. While, IT down by 0.51%, Metal down by 0.45% and TECK down by 0.01% were the losers on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.53%, HDFC up by 3.48%, HDFC Bank up by 3.18%, Maruti Suzuki up by 2.99% and Hero MotoCorp up by 2.98%.

On the flip side, Sterlite Industries down by 2.84%, Infosys was down by 1.27%, Jindal Steel down by 0.24% and Wipro down by 0.01% were the top losers on the Sensex.

Meanwhile, to push the economic growth, the Confederation of Indian Industry (CII) has urged the Reserve Bank of India (RBI) for a 100 basis point cut in interest rate. CII president and Infosys co-founder, K S Gopalakrishnan said ‘we would like to see a 100 basis point decrease in interest rates as the investments will automatically increase if the interest rates come down.’  

As per the CII, to revive the economy and take the rate of growth in GDP back to 8-9 per cent in the next two years it is essential to kick start investment. Early implementation of Goods and Services Tax (GST) and Direct Taxes Code (DTC) is also important as these steps would help in adding 1-1.5 per cent in the GDP growth.

The central bank has been keeping a tight leash on its monetary policy, due to concerns over high inflation. However, the decline in WPI in March raised hopes that the RBI will cut its interest rate on May 3 policy review. Further, CII also demanded for independent regulatory authorities in sectors of scarce resources like coal, real estate and health. Further, it also emphasized the need to address coal and gas shortages in the power sector besides accelerating exploration of fuels and production in the country.

The CNX Nifty is currently trading at 5,663.65, up by 95.25 points or 1.71% after trading in a range of 5,669.25 and 5,555.85. There were 44 stocks advancing against 6 declines on the index.

The top gainers of the Nifty were Axis Bank up by 4.49%, M&M up by 3.56%, HDFC up by 3.45%, Reliance Infrastructure up 3.27% and Hero MotoCorp up by 3.21%.

On the flip side, Sesa Goa down by 1.67%, Infosys down by 1.53%, Cairn India down by 1.03%, Lupin down by 0.87% and NMDC down by 0.35% were the major losers on the index.

Asian equity indices were trading in green barring Hang Seng which dropped 0.46% and Nikkei 225 decreased 0.41% while, Shanghai Composite up by 0.59%, Jakarta Composite rose 0.85%, KLSE Composite gained 0.14%, Straits Times added 0.21%, Taiwan Weighted was up by 0.48% and KOSPI Composite was up by 0.09%.

The European markets were trading in red; France’s CAC 40 lost 0.87%, Germany’s DAX dropped 0.66% and United Kingdom’s FTSE 100 edged lower by 0.59%.