Indian equity add gains; IT, TECK leads

Indian equity markets added gains and trade above neutral line in the late afternoon session on account of buying in front line blue chip counters. Investors have adopted a cautious approach ahead of release of Consumer Price Index (CPI) and Industrial Production data scheduled on May 10. Traders were seen piling position in IT, TECK and Power sector stocks while selling was witnessed in Health Care, Oil & Gas and Metal sector stocks. In scrip specific development, SKS Microfinance was trading in green after it delivered a good set of numbers in fourth quarter (January-March). The non-banking finance company continued to report profits for the second consecutive quarter after posting losses in previous seven straight quarters due to bad loans of Andhra Pradesh portfolio. Viceroy Hotels was locked in upper circuit limit after the company approved the sale of its Chennai project division for Rs 480 crore. Apollo Tyres was trading in red after foreign brokerage firm Goldman Sachs downgraded the stock to neutral from buy, also removing it from its Asia Pacific buy list citing limited upside. On the global front, the Asian markets were trading on a mixed note while the European markets were trading on pessimistic note.

Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,050 and 19,900 levels respectively. The market breadth on BSE was negative in the ratio of 1098:1122, while 144 scrips remain unchanged.

The BSE Sensex is currently trading at 19,991.19, up by 1.01 points or 0.01% after trading in a range of 20,058.48 and 19,941.35. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading in green; the BSE Mid and Small cap index were trading up by 0.22% and 0.16% respectively.

The top gaining sectoral indices on the BSE were, IT up by 0.97%, TECK up by 0.72%, Power up by 0.50%, PSU up by 0.46% and Bankex up by 0.36%, while Health Care down by 1.15%, Oil & Gas down by 0.61%, Metal down by 0.58%, Consumer Durables down by 0.18% and FMCG down by 0.01% were the only losers on the sectoral index.

The top gainers on the Sensex were SBI up by 2.57%, TCS up by 1.60%, Hindalco Industries up by 0.68%, Mahindra & Mahindra up by 0.61% and Wipro up by 0.60%. On the flip side, Sun Pharma down by 3.22%, Jindal Steel down by 1.44%, Sterlite Industries down by 1.32%, Reliance Industries down by 1.28% and Cipla down by 0.87% were the top losers on the Sensex.

Meanwhile, in order to improve the business of Indian companies manufacturing capital goods, the Heavy Industries Ministry has asked the Reserve Bank of India (RBI) to withdraw the permission for external commercial borrowings (ECBs) denominated in Chinese currency, for power plants, which will help domestic power generation equipment manufacturers like BHEL, and L&T to compete with cheaper Chinese imports. Currently, Indian companies, in power and other permitted sectors, can raise ECB up to an equivalent of $1 billion denominated in renminbi (RMB).

Earlier, in July 2012, the central bank has permitted ECB from China in their currency. Further, it is expected that the availability of long-term, low interest export credit from China will further distort the status in favour of Chinese manufacturers, who have already gained almost 50 per cent share in the Indian power generating equipment market. 

Heavy Industries Minister Praful Patel has also suggested the RBI for providing finance to the domestic industry on the same rates as Chinese export credit, if the ECB circular is not withdrawn. This move would level the playing field with respect to the finance cost and will certainly help the domestic players to compete effectively vis-à-vis their foreign counterparts.

Moreover, the industry is of the view that earlier it was cheaper imports mainly from China and now cheaper finance for Chinese companies are making things very difficult for domestic manufacturing companies. Meanwhile, domestic players got some relief last year when import duty was raised on imported equipment. However, the problem has not been solved completely as various companies have been expanding capacity for manufacturing steam generators and turbine generators and there is fear that the gap will increase due to sluggish growth of power sector.

The CNX Nifty is currently trading at 6,072.90, up by 3.60 points or 0.06% after trading in a range of 6,084.70 and 6,053.70. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were PNB up by 5.37%, Reliance Infra up by 2.85%, HCL Tech up by 2.67%, SBI up by 2.59% and Bank of Baroda up by 2.10%. On the flip side, Sun Pharmaceuticals down by 3.23%, NMDC down by 2.30%, Jindal Steel down by 1.68%, Axis Bank down by 1.51% and Reliance Industries down by 1.45%, were the major losers on the index.

Asian equity indices were trading mixed; Straits Times surged 0.40%, KOSPI Composite soared 1.18% and Taiwan Weighted was up 0.23%.

On the flip side, Nikkei 225 down by 0.66%, Shanghai Composite declined 0.59%, Hang Seng contracted 0.14% and KLSE Composite down by 0.44%. Indonesian market remained shut for the trade today.

The European markets were trading in red; France’s CAC 40 was down 0.81%, Germany’s DAX slipped 0.16% and United Kingdom’s FTSE 100 edged lower by 0.07%.