Benchmarks continue their jubilant run on signs of easing by RBI

Indian benchmarks have rallied more than one percent in the late morning session on hopes that the Reserve Bank will cut rates in June after April inflation eased to a 41-month low. Sentiment have remained firm on sustained buying by participants after WPI inflation eased to over three years low, giving room for the Reserve Bank to cut interest rates, amid a firming trend in the global markets. On the global front, Asian markets too were exhibiting firm trade at this point of time with Japanese Nikkei surging to a fresh five and a half year high as Japanese exporters rallied on the yen’s sharp slide. The yen hovered near a four and a half year low as against the dollar set on May 14, 2013. Back home, the traders were seen piling up positions in Oil & Gas, PSU and Teck while selling was seen in Consumer Durables sector.

In scrip specific development, Rate sensitives such as banks, autos and realty stocks rallied 1-2 per cent on hopes of a rate cut by the Reserve Bank of India in its upcoming policy meet next month. In scrip specific actions, Oil and Natural Gas Corp and Oil India gained on expectations the government would allow them to reduce the share of oil price subsidies provided to state refiners.DLF gained after a strong response to its IPP yesterday. The company received bids for 1.8 times its total size and raised Rs 3500 crore.VIP was up 3.5 percent ahead of its results today. Tata Motors soared after its unit Jaguar Land Rover reported a 12 per cent increase in sales in April on Tuesday, raising expectations the more important wholesales numbers would improve.

Meanwhile, the NSE Nifty and BSE Sensex were trading just above their psychological 6,000 and 20,000 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in ratio of 1150: 357.

The BSE Sensex is currently trading at 20026.37, up by 304.08 points or 1.54% after trading in a range of 20040.13 and 19798.18. There were 29 stocks advancing against 1 decline on the index. The broader indices were trading in green; the BSE Mid cap index was up by 1.19% and Small cap index was up by 0.98%.

The gaining sectoral indices on the BSE were, Bankex up by 2.15%, Realty up by 1.95%, Capital Goods up by 1.81%, Auto up by 1.69% and Oil and Gas up by 1.48%, while there was no loser on the BSE.

The top gainers on the Sensex were HDFC up by 3.28%, Hindalco Inds up by 2.70%, SBI up by 2.48%, Tata Motors up by 1.40% and HDFC Bank up by 2.29%. On the flip side, Sun Pharma was down by 0.26% was the only loser on the Sensex.

Meanwhile, with an aim to boost country’s infrastructure development, Finance Ministry would set up a cell to help clear the issues that have stalled several infrastructure projects in the country, especially in the power and roads sectors. While, addressing a meeting with leading industrialists and top bank executives, Finance Minister P Chidambaram, said that the proposed cell would take up the issues on ongoing basis with concerned departments including coal, environment & forests and surface transport among other.

Chidambaram held the meeting to review about 28 stalled infrastructure projects, particularly in Andhra Pradesh. The combined value of the projects is Rs 92,500 crore including banks funding of Rs 69,000 crore. However, the infrastructure companies said that delays in land acquisition in the case of road projects and delays in concluding fuel agreements with Coal India and power purchase agreements with state electricity board are the main roadblocks stalling infrastructure projects.

The finance ministry is keen to resolve the issues so that bank funding is released and the projects become sustainable. Further, for the 12th Five Year Plan, the government has set $1 trillion target for infrastructure development in the country.

The CNX Nifty is currently trading at 6,086.00 up by 90.60 points or 1.51% after trading in a range of 6,093.50 and 6,018.85. There were 47 stocks advancing against 3 declines on the index.

The top gainers of the Nifty were Lupin up by 3.39%, R-Infra up by 3.33%, HDFC up by 3.02%, PNB up by 3.02%, and JP Associaties up by 2.80%. On the flip side, Ranbaxy down by 0.58%, Sun Pharma down by 0.28% and Power Grid down by 0.26% were the major losers on the index.

Most of the Asian markets were trading in green; Hang Seng rose 173.38 points or 0.76% to 23,103.66, Jakarta Composite increased 6.05 points or 0.12% to 5,087.99, Nikkei 225 surged 284.21 points or 1.93% to 15,042.63, Straits Times added 6.81 points or 0.22% to 3,440.19 and Taiwan Weighted was up by 51.41 points or 0.64% to 8,304.32.

On the flip side, Shanghai Composite declined 2.44 points or 0.11% to 2,214.57, KOSPI Composite was down by 1.41 points or 0.01% to 1,968.69 and KLSE Composite declined 0.01 points to 1.788.42