Markets move up sharply as April WPI inflation eases to 4.89%

Following a positive opening and subsequent retreat, Indian equity markets have moved up sharply towards mid of the session on Tuesday amid across the board buying. Sensex gained about 100 points, while the broader Nifty was up by around 30 points, after the indexes slumped more than 2 percent on Monday. Meanwhile, declining for second straight month, India's main inflation gauge, surprisingly slowed down to its lowest since 2009 at 4.89% for the month of April, as compared to 5.96% (Provisional) for the previous month of March. Investors’ sentiments were boosted with these better than expected WPI numbers, on hopes that central bank will continue its rate cut move in the next monitory policy as well. In currency markets, rupee recovered against greenback amid dollar selling by some exporters. On sectoral front, oil, healthcare, PSU and banking stocks were trading firm, while only consumer durable stocks were trading in red.

On the global front, the Asian stock markets were mixed in a lukewarm reaction to data showing that US consumers revved up their retail spending last month. Back home, the market breadth was still favoring negative trend; there were 1,091 shares on the gaining side against 868 shares on the losing side, while 102 shares remained unchanged.

The BSE Sensex is currently trading at 19789.99, up by 98.32 points or 0.50% after trading in a range of 19831.79 and 19652.69. There were 19 stocks advancing against 10 declines on the index and one remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.46% and Small cap index was up by 0.31%.

The gaining sectoral indices on the BSE were, Oil & Gas up by 1.21%, PSU up by 0.90%, Health Care up by 0.69%, Bankex up by 0.69% and TECk up by 0.58% while Consumer Durables down by 0.61%, was the only the loser on the BSE sectoral space.

The top gainers on the Sensex were Gail India up by 2.18%, ONGC up by 2.12%, Hindalco Industries up by 1.67%, Bharti Airtel up by 1.03% and Tata Motors up by 0.97%.

On the flip side, Tata Steel was down by 0.84%, Bajaj Auto was down by 0.59%, Dr Reddys Lab was down by 0.55%, BHEL was down by 0.37% and Wipro was down by 0.29% were the top losers on the Sensex.

Meanwhile, Minister of State for Commerce and Industry D Purandeswari said that in order to enhance exports with other nations the Government is reviewing some of the existing Free Trade Agreements (FTA) with these nations and will try to address issues in those pacts accordingly.

The global economic slowdown impacted India’s exports which recorded $300.6 billion during 2012-13 and missed the target of $360 billion by a wide margin. This also pushed up the trade deficit during the fiscal to $190.91 billion from $183.4 billion in the previous financial year. The Government has also set the exports target to $325 billion for the FY14 which is less than the previous fiscal's exports target of $360 billion owing to the global crises.

However, worried over the declining India’s export, the Government announced a slew of measures in the annual Foreign Trade Policy (FTP) including sops for Special Economic Zones (SEZs) and extension of the popular EPCG scheme to all sectors to boost shipments.

The CNX Nifty is currently trading at 6,009.20 up by 28.75 points or 0.48% after trading in a range of 6,026.20 and 5,970.05. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were GAIL up by 2.38%, Power Grid up by 2.18%, ONGC up by 2.17%, IDFC up by 1.57% and PNB up by 1.44%.

On the flip side, HCL Technologies down by 2.05%, Ambuja Cements down by 1.10%, Tata Steel down by 0.85%, Reliance Infra down by 0.80%, Bajaj-Auto down by 0.61% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite was down by 1.30%, Hang Seng was lower by 0.15%, KLSE Composite decline by 0.16%, Nikkei 225 was down by 0.18% and Jakarta Composite was down 0.08%.

On the other hand, Taiwan Weighted was up by 0.04%, Straits Times added 0.14% and KOSPI Composite gained 1.03%.