Benchmarks rally for third straight day; Sensex just shy 20,000 mark

Indian equity markets extended their northward journey for third straight day buoyed by strong corporate earnings and victory of Congress in Karnataka state election. After a firm opening, markets in the noon deals appeared to be exhausted with their run up rally, the lost momentum was soon restored as both the frontline indices were back on track thanks to better than expected results reported by Housing Development Finance Corporation (HDFC) and Lupin, which led Sensex topping the 20,000-mark for the first time since January 31, 2013. Though, Sensex lost its crucial 20,000 mark as profit booking emerged at the end of trade but, both the gauges ended the session at their 14-week high.

Sentiments remained upbeat after Congress won state election in Karnataka by capturing about 120 constituencies out of total 224 seats. Sentiments also revived after the government cleared 17 foreign direct investment (FDI) proposals worth around Rs 262.56 crore, including Sanofi-Synthelabo proposal, which was regarding the acquisition of a pharma company through internal accruals and proposes to bring in FDI worth around Rs 180 crore. 

On the global front, European counters after a flat start, traded steady as investors mulled strong data from China against a backdrop of record highs in equity markets in Germany and the US. Asian markets shut shop mostly in green as strong Chinese trade data added to positive sentiment. China’s exports rose 14.7% in April, while imports grew 16.8%, leaving the country with a trade surplus of $18.16 billion for the month.

Back home, sentiments remained jubilant after National Council of Applied Economic Research (NCAER) said the Indian economy is likely to grow by 6.2 percent in the current financial year, significantly higher than the Reserve Bank of India's GDP growth projection of 5.7 percent for 2013-14. Sentiments also got buttressed with the government’s statement that it has taken a slew of initiatives to boost exports and reduce imports to lower trade deficit and thereby Current Account Deficit (CAD).

The NSE’s 50-share broadly followed index Nifty rose by over twenty five points to end above its psychological 6,050 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex surged by over a hundred points to finish above its psychological 19,950 mark. The broader markets too traded with traction during the session and snapped the trade with a gain of about half a percent.

The overall volumes stood at over Rs 1.41 lakh crore, which remained on the lower side as compared to that on Tuesday. The market breadth was evenly divided as there were 975 shares on the gaining side against 974 shares on the losing side, while 84 shares remain unchanged.

Finally, the BSE Sensex gained 101.23 points or 0.51% to settle at 19,990.18, while the CNX Nifty rose by 25.75 points or 0.43% to end at 6,069.30.

The BSE Sensex touched a high and a low of 20,037.27 and 19,851.22, respectively. The BSE Mid cap index up by 0.47% and Small cap index was up by 0.47%.

The top gainers on the Sensex were, HDFC up by 3.85%, ITC up by 2.27%, HDFC Bank up by 1.38%, Hindustan Unilever up by 1.23% and Hindalco up by 0.83%, while Bharti Airtel down by 1.82%, Hero MotoCorp down 1.78%, Tata Steel down 1.45%, Mahindra & Mahindra down 1.35% and Jindal Steel down by 1.13% were the top losers on the index. 

The top gainers on the BSE Sectoral space were FMCG up 1.43%, Bankex up 0.11%, Oil & Gas up 0.11% and Health Care up 0.08%, while Capital Goods down 0.65%, Auto down 0.46%, Metal down 0.36%, Power down 0.31% and PSU down 0.14% were the top losers on the sectoral space.

Meanwhile, in order to make bill paying system convenient in the country, the Reserve Bank of India (RBI) committee headed by G Padmanabhan, has proposed to set up a single platform for all direct bill payments. The proposed Indian bill payment system aims to bring all banks, billers and customers on one platform through the Government Internal Revenue Order (GIRO) system.

The GIRO model will enable payment of dues such as taxes, insurance premium, utility payments, university fees, school fees and examination fees, etc. Further, the GIRO will enable the setting up of a centralized infrastructure bringing all the billers and banks to the bill platform through aggregators. In a GIRO payment system, up to three banks collecting bank, payer bank and the payee bank may be involved and the customers can access the payment channel through any available outlet.

As per the central bank, over 30.8 billion bills are generated each year in the top 20 cities in the country. While cash and cheque collections constitute over 90% of the transactions and electronic payments continue to be low.  The RBI committee has also suggested setting up a separate organization to operate and manage it on commercial lines. Currently, direct bill payments are limited to only some utility providers and lack interoperability, customer convenience and access to electronic payment modes.

The CNX Nifty touched a high and a low of 6,083.55 and 6,024.95 respectively. 

The top gainers on the Nifty were HDFC up by 4.75%, ITC up 2.83%, Lupin up 2.57%, Ultratech Cement up 2.51% and IndusInd Bank up by 2.08%.

On the flip side, the top losers of the index were, Ranbaxy down 3.08%, Bharti Airtel down 2.37%, Tata Steel down 1.76%, Hero MotoCorp down 1.71% and Bank of Baroda down by 1.43%.

The European markets were trading in green, France’s CAC 40 up by 0.74%, the United Kingdom’s FTSE 100 up by 0.64% and Germany’s DAX up by 0.28%.

Asian markets ended mostly higher after touching nearly two-year high on Wednesday, as strong Chinese trade data added to positive sentiments of record highs in global equities overnight. Chinese shares closed higher, as exports and imports in the world's number two economy were up 14.7% and 16.8% respectively in April. Hong Kong market went home with green mark, with banking heavyweight HSBC Holdings PLC leading gains after reporting strong earnings.