Indian equities add gains; Consumer Durables, Realty leads

Indian equity markets added gains to continue firm trade in the late afternoon session on account of buying in front line blue chip counters and taking cues from European counterparts. The mood on the street were however on caution note as investors have started eyeing outcome of RBI’s monetary policy review scheduled on May 03. Traders were seen piling position in Consumer Durables, Realty and FMCG stocks, while selling was witnessed in Metal and Capital Goods sector stock. In scrip specific development, Lanco Infratech was trading firm after the company stated that it will pay AUD 7.5 million to settle the protracted AUD 3.5 billion legal battle with Australia’s Perdaman Chemicals over coal supply issues. Transformers & Rectifiers rallied as the company is expected to consider issuing bonus shares this week. Maruti Suzuki was trading in green after foreign brokerage firm Citigroup Global Markets upgraded the company to buy from neutral driven by significantly better-than-expected growth in fourth quarter earnings. Emami was trading in green after the company stated that the board of directors will meet on May 6 to consider the issue of bonus shares to equity shareholders. The stock market will remain close on Wednesday i.e. May 01, 2013, on account of Maharashtra Day.

On the global front, most of the Asian markets were trading in green, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,850 and 19,300 levels respectively. The market breadth on BSE was positive in the ratio of 1146:1012, while 130 scrips remain unchanged.

The BSE Sensex is currently trading at 19,327.57, up by 40.85 points or 0.21% after trading in a range of 19,387.90 and 19,284.40. There were 17 stocks advancing against 13 declines on the index.

The broader indices were trading in green; the BSE Mid cap index and Small cap index were trading up by 0.58% and 0.28% respectively.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.93%, Realty up by 1.62%, FMCG up by 1.59%, Power up by 1.29% and IT up by 1.08%, while Metal down by 1.05% and Capital Goods down by 0.19% were the only losers on the BSE.

The top gainers on the Sensex were Hindustan Unilever up by 4.05%, Hero MotoCorp up by 3.58%, Wipro up by 3.07%, Sterlite Industries up by 1.39% and ITC up by 1.33%.

On the flip side, Jindal Steel down by 5.62%, Coal India down by 1.80%, HDFC down by 1.44%, L&T down by 1.16% and Bharti Airtel down by 1.07% were the top losers on the Sensex.

Meanwhile, as per the India Meteorological Department (IMD) forecast, the June-September monsoon for the current year would remain normal. Abandoning the possibility of drought in the country, the meteorological department’s prediction is likely to provide a measure of relief to policymakers, and will deliver a boost to the rain-dependent agricultural sector that employs six out of ten Indian workers.         

While announcing IMD’s findings, Science Minister Jaipal Reddy said monsoon rainfall will be around 98% of the 50-year average of 89cm. The IMD classifies rainfall within a 4% window of 89cm as normal and a 5-15% deficiency as below normal. Anything lower, or less than 81cm, usually indicates drought conditions.

The June-September monsoon, being the main source of water for agriculture, generates nearly 80% of India’s annual rainfall and is vital for the economy’s growth as the agriculture sector represents around 50% of India’s gross domestic product. Rain is also important for traders dealing in food and cash crops, as any shortfall can inject price volatility into the markets.   

IMD will revise the monsoon forecast towards the end of June and will also estimate the rainfall for July and August, during which most of the areas of the country get maximum rain. At the same time, it will also gauge how the monsoon will progress over broad geographical divisions such as the northwest, northeast, south and central India. In fact IMD’s April forecast is considered at best indicator as in the last five years, only twice has monsoon rainfall been less than what IMD indicated in April.

On the other hand, IMD’s forecasting models have an error margin of 5%. IMD forecasted normal monsoon in the last year also, while, India faced 7 percent deficit in rain mainly due to poor rain in June and July.

The CNX Nifty is currently trading at 5,886.50, up by 15.05 points or 0.26% after trading in a range of 5,899.15 and 5,868.80. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were HUL up by 4.27%, Reliance Infrastructure up by 4.07%, IndusInd bank up by 4.07%, Hero MotoCorp up by 3.56% and HCL Tech up by 2.16%.

On the flip side, Jindal Steel & Power down by 5.70%, NMDC down by 2.25%, Coal India down by 1.80%, HDFC down by 1.39% and Axis Bank down by 1.37% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng added0.15%, Jakarta Composite gain 0.34%, Taiwan Weighted was up by 0.10% and Straight Times edged higher 0.20%.

On the flip side, KLSE Composite slipped 0.25% and KOSPI Composite was down by 0.20%. Markets in mainland China and Japan were closed for holidays.

The European markets were trading in green; France’s CAC 40 added 0.80%, Germany’s DAX gain 0.57% and United Kingdom’s FTSE 100 edged higher by 0.11%.