Benchmarks extend rally for third consecutive day

Key domestic benchmarks, extending their rally to third consecutive day, ended the session with marginal gains supported by rally in banking stocks, which extended their gains on hopes of rate cut by the central bank. Sentiments also remained up-beat after Moody’s statement that Indian economy is expected to pick up and grow in the range of 5.5-6.5 percent in 2013. Buying was witnessed from foreign investors after the newly appointed Law Minister Kapil Sibal cleared a SEBI regulation which permits put and call options in mergers and acquisitions. Foreign institutional investors (FIIs) were net buyers of Rs 1,647 crore of stocks on May 15, 2013, marking their biggest single day of buying since February 7, 2013.

Supportive cues from US markets provided the much needed support to local markets initially. Investors’ morale got buttressed after Japanese economy grew 0.9% in the first quarter, speeding up from a 0.3% pace in the previous quarter and beating expectations of a growth rate of 0.7%. However, Indian markets up-move remain capped after European counter opened lower on the back of disappointing corporate earnings. Around 53 percent of European companies have so far missed earnings expectations for the most recent quarter. Meanwhile, Asian markets closed the shutter on a mixed note on Thursday.

Back home, realty stocks like, DLF, Indiabulls Real Estate, Unitech, DB Realty, HDIL, Parsvnath Developers and Anant Raj Industries extended their rally as the latest data showing a sharp fall in wholesale price inflation in April 2013 raised hopes that the RBI may further cut policy rates to perk up economic growth. Lower interest rates may help revive demand for properties. Some support also came in after buying was witnessed in oil and gas counter led by over two and a half percent rally in index heavyweight Reliance Industries. Meanwhile, traders also shrugged off negative news for the sector that Oil Ministry’s proposal for an across-the-board near doubling of natural gas prices has been rejected by the Cabinet Secretariat.

However, gains remain capped after Moody’s noted that the Current Account Deficit (CAD) remains a persistent concern for India. Sentiments also got dented after a survey showed that India’s economic confidence dropped by 2 points to 63 percent in the month of April, 2013 compared to the month of March, 2013 and now the country is the sixth most economically confident country in the world after Saudi Arabia, Sweden, China, Canada and Germany. 

The NSE’s 50-share broadly followed index Nifty rose by over twenty points to end tad above its psychological 6,150 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex surged by about thirty points to end above its psychological 20,200 mark. The broader markets too traded in-line with benchmarks and snapped the session in green terrain.

The market breadth was in favour of declines as there were 952 shares on the gaining side against 1,032 shares on the losing side, while 96 shares remain unchanged.

Finally, the BSE Sensex gained 34.37 points or 0.17% to settle at 20,247.33, while the CNX Nifty rose by 23.15 points or 0.38% to end at 6,169.90.

The BSE Sensex touched a high and a low of 20,326.48 and 20,162.12, respectively. The BSE Mid cap index up by 0.42% and Small cap index was up by 0.23%.

The top gainers on the Sensex were, Hindalco Industries up 2.68%, Cipla up 2.62%, Reliance up 2.61%, Dr Reddys Lab up 2.48% and Sterlite Industries up 2.07%, while ITC down 1.71%, Tata Motors down 1.69%, Jindal Steel down 1.33%, Infosys down 1.19% and TCS down 1.02% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, Realty up 1.81%, Oil & Gas up 1.64%, Health Care up 1.53%, Bankex up 1.11% and Capital Goods up 0.84%, while FMCG down 1.06%, IT down 0.99%, TECk down 0.87%, Auto down 0.6% and Consumer Durables down 0.49% were the top losers on the sectoral space.

Meanwhile, the government will provide subsidy to LPG consumers in 20 districts across the country from June 1, 2013. The consumers in the select districts will get the subsidy amount transferred into their bank accounts linked with Aadhaar number helping the government to cut its subsidy outgo by up to Rs 10,000 crore annually by eliminating diversions.

Oil Minister M Veerappa Moily said that 76 lakh consumers in 20 districts will get Rs 435 in their bank accounts every time, when they book a LPG refill. The government intends to extend the scheme to rest of the country but want to see the results of the roll-out in these 20 districts.

By adding further, the minister said that although 89 per cent of the LPG consuming population in these districts has Aadhaar number, the government will give a three-month grace period to them to procure the UID number and seed it with their bank accounts where cash subsidy has to be transferred. From September 1, only consumers having Aadhaar and banks accounts linked to them will get cash subsidy and the rest will have to buy LPG at market price, he added.

There are around 14 crore LPG consumers in India in which 2.5 crore were suspected to be duplicate or consumers holding more than one connection at the same address. Once the DBT for LPG is implemented, the government subsidy will reach the intended beneficiary only.    

The CNX Nifty touched a high and a low of 6,187.30 and 6,128.25 respectively. 

The top gainers on the Nifty were JP Associates up 5.80%, IDFC up 3.61%, Sesa Goa up 2.99%, Lupin up 2.94% and Cipla up 2.75%.

On the other hand, top losers on Nifty were, NMDC down 2.92%, Tata Motors down 1.86%, Jindal Steel down 1.58%, ITC down 1.53% and Bajaj Auto down by 1.41%.

The European markets were trading mixed, France’s CAC 40 down by 0.12%, the United Kingdom’s FTSE 100 up by 0.14% and Germany’s DAX down by 0.06%.

Asian markets closed the shutter on a mixed note on Thursday with Japanese stocks turning lower after touching a fresh five-and-a-half year high in early trade. Most of the markets in the region opened on a buoyant note, but some of them retreated soon with investors choosing to take some profits, cashing in on recent gains. Chinese market ended with green mark for the second straight day, with financial institutions and property developers leading the gains. South Korean market closed higher buoyed by foreign buyers returning after having been net sellers for most of April and so far this month.