Markets continue positive trade; banking stocks major laggards

Following a positive opening and subsequent retreat, Indian equity markets regained strength and continued trading higher in the late morning session on Monday. However, markets gains remain restricted as Brent futures and gold have recouped most of their losses and were trading at two-week highs, causing concern for the market, being the net importer of crude and gold. Sensex was up 94 points, while Nifty was up 23. In currency markets, rupee appreciated marginally against greenback, amid fresh selling of the US currency by exporters, amid sustained foreign capital inflows. On the sectoral front, banking stocks tumbled with online media firm continuing money laundering allegations against as many as 23 banks. However, with investors indulging in some buying at lower levels, several stocks from the banking space regained most of the lost ground. Select stocks from metal, IT and oil sectors were trading higher.

On the global front, most Asian markets were trading higher, after a strong US employment report for April calmed fears of slowdown in US. Back home, the market breadth was favoring positive trend; there were 1,110 shares on the gaining side against 779 shares on the losing side, while 101 shares remain unchanged.

The BSE Sensex is currently trading at 19,670.22, up by 94.58 points or 0.48% after trading in a range of 19,694.29 and 19,554.31. There were 22 stocks advancing against 8 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.68% and Small cap index was up by 0.93%.

The top gaining sectoral indices on the BSE were, Metal up by 1.85%, IT up by 1.59%, Oil & Gas up by 1.44%, TECk up by 1.32%, and Auto up by 1.23% while, Bankex down by 0.48% and  FMCG down by 0.45% were the only losers on the BSE.

The top gainers on the Sensex were Hindalco Industries up by 3.16%, Tata Steel up by 2.91%, Reliance up by 2.75%, TCS up by 2.56% and Sterlite Industries up by 2.28%.

On the flip side, HDFC Bank was down by 1.20%, NTPC was down by 0.88%, ITC was down by 0.85%, ONGC was down by 0.49% and Dr Reddy’s was down by 0.36% were the top losers on the Sensex

Meanwhile, the Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the Government aims to bring down current account deficit (CAD) to about 2.5 percent of the GDP by March 2017. While attending the 46th annual meeting of the Asian Development Bank (ADB), Ahuluwalia said that the Government is making efforts to bring down the deficit in a phased manner and planned to finance the CAD through foreign direct investment (FDI), portfolio inflows and marginally through debt.

Ahluwalia also expressed the need to channelise domestic savings into long-term infrastructural projects. Regarding the financing of infrastructure projects, he said that high fiscal deficit would pose a challenge to mobilise a lot of financial savings for infrastructure financing. He said that the Government always prefers borrowing in its own currency, so there is a need to create an environment that confirms the easily availability of domestic debt and the institutions such as ADB and other multilateral bodies can play a useful role in making available funds for infrastructural projects.

Meanwhile, the government has cleared that the fiscal deficit for FY13 will be better than the estimated 5.2% as an overall tax collection of over Rs.10.38 lakh crore has been achieved. The CAD, which occurs when a country's total imports of goods, services and transfers are greater than its exports, had reached an all-time high of 6.7 percent of GDP in the third quarter of FY13.

The CNX Nifty is currently trading at 5,967.00 up by 23.00 points or 0.39% after trading in a range of 5,976.50 and 5,928.45. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were Asian Paints up by 3.70%, Hindalco Industries up by 3.21%, Tata Steel up by 2.89%, Reliance up by 2.73% and TCS up by 2.53%.

On the flip side, Kotak Bank down by 1.69%, HDFC Bank down by 1.17%, Ambuja Cement down by 0.90%, Lupin down by 0.86%, and ITC down by 0.85% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 1.10%, Hang Seng surged 1.02%, Jakarta Composite soared 1.16%, KLSE Composite zoomed 3.13%, Straits Times increased 0.65% and Taiwan Weighted was up by 0.42%. On the flip side, KOSPI Composite down by 0.22% was the only loser.

Japanese market is shut for the trade today on account of Children’s Day.