Benchmarks gain for third consecutive day; Nifty regains 6,100 mark

Indian equity markets continued their northward journey for third consecutive day as investors piled up positions in risky assets on the back of firm global cues. The benchmarks, after an hour of positive start, turned negative mainly due to profit booking. But, buying which emerged in second half mainly acted as saving grace for domestic equity markets. Frontline indices tested the psychological 6,150 (Nifty) and 20,200 (Sensex) levels in the session and met with stern resistance around those levels but managed to finish the session with a gain of over half a percent and settled comfortably above 6,100 (Nifty) and 20,150 (Sensex) levels as investors took to hefty across the board buying. Some strength to the markets also came in from Finance Minister P Chidambaram’s statement that regardless of any government at the Centre the country will grow by 5-6 per cent, but to reach the brisk rate of 8 or 9 per cent effective governance is needed.

Sentiments also remained upbeat after Coal India reported better than expected fourth quarter numbers. The company, on consolidated basis, has reported 34.90% jump in its net profit after taxes, minority interest and share of associates at Rs 5413.91 crore in Q4FY13 as compared to net profit of Rs 4013.41 crore in the same quarter previous year. Total income from operation of the company has increased marginally by 1.78% to Rs 22111.07 crore as compared to Rs 21724.99 crore in corresponding quarter last year.

Global cues too remained supportive as European markets traded firmly in early deals on hopes that global central banks would continue their stimulus measures to boost economy. Asian markets too shut shop mostly in green with Tokyo clawing back some ground in choppy trade following sharp declines in recent sessions as a stronger yen prompted a bout of profit-taking.

Back home, some strength came in from PSU sector, which rose about one and a half percent as the government is working out norms for utilization of surplus funds of cash-rich PSUs with a view to boost investment and promote growth. Some buying was also seen in selected stocks from fast moving consumer goods sector on report that the monsoon is expected to hit Northeastern states in 3-4 days. Monsoon had brought its first showers to the Andaman Sea on May 17, three days before the normal onset date. Additionally, index heavyweight Reliance Industries (RIL) advanced for second day in a row after the company along with partners announced huge gas discovery in KG-D6 block.

The NSE’s 50-share broadly followed index Nifty gained by about thirty points to end comfortably above its psychological 6,100 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex rose by one hundred and thirty points to finish over its psychological 20,150 mark. Moreover, the broader markets too traded in-line with benchmarks and snapped the session with a gain of over half a percent.

The market breadth remained in favor of advances as there were 1,204 shares on the gaining side against 1,149 shares on the losing side while 164 shares remain unchanged.

Finally, the BSE Sensex gained 130.05 points or 0.65% to settle at 20,160.82, while the CNX Nifty rose by 28.10 points or 0.46% to end at 6,111.25.

The BSE Sensex touched a high and a low of 20,209.82 and 19,963.23, respectively. The BSE Mid cap index up by 0.60% and Small cap index was down by 0.48%.

The top gainers on the Sensex were, Hero MotoCorp up by 5.09%, BHEL up by 3.30%, Coal India up by 3.01%, Mahindra & Mahindra up by 2.22% and ONGC up by 1.94%, while Sun Pharma down by 1.90%, SBI down 1.45%, Sterlite Industries down 1.40%, Cipla down 1.18% and HDFC down by 0.83% were the top losers on the index. 

The top gainers on the BSE Sectoral space were Oil & Gas up 1.65%, Auto up 1.33%, PSU up 1.23%, Consumer Durables up 1.15% and Power up 1.12%, while Health Care down 0.68% and Bankex down 0.05% were the top losers on the sectoral space.

Meanwhile, with many states expressing difficulty in acquiring the vast tracts of land needed to set up dedicated manufacturing zones, the government’s ambitious manufacturing thrust has run into trouble even before it could take off. Some states in north and north-east have expressed their inability to set up National Manufacturing Investment Zones (NMIZs) as it would involve either acquiring huge agricultural land or hilly terrain interspersed with plains and valleys.

Five states such as Punjab, Himachal Pradesh, Assam, Manipur and Meghalaya have written to the Department of Industrial Policy and Promotion (DIPP) requesting it to consider revising the minimum land requirement (from existing 5,000 hectare) for developing NMIZs. On the other hand, the government is no mood to reduce the minimum land requirement for NMIZs as it did for special economic zones as the NMP is relatively new and any reversal in policy at this point of time will hit the investor sentiments.

The government has introduced its ambitious national manufacturing policy (NMP) in 2011 and the proposals contained in the policy apply to manufacturing industry throughout the country. The objective of NMP is to increase the share of manufacturing to GDP from the existing 15% to 25% by 2025 and create 100 million jobs. This would be done by setting up Greenfield integrated townships or NMIZs with a minimum area of 5,000 hectare. 

The CNX Nifty touched a high and a low of 6,127.65 and 6,055.40 respectively. 

The top gainers on the Nifty were Hero MotoCorp up by 6.99%, JP Associates up 4.20%, BHEL up 3.58%, Coal India up 2.93% and M&M up by 2.50%.

On the flip side, the top losers of the index were, Ranbaxy down 2.67%, Ultratech Cement down 1.96%, Kotak Bank down 1.79%, SBI down 1.56% and Sesa Goa down by 1.53%.

The European markets were trading in green, France’s CAC 40 up by 1.37% and Germany’s DAX up by 1.03 points and the United Kingdom’s FTSE 100 up by 1.60%.

Most Asian equity markets ended higher, although gains were modest due to lack of fresh triggers. Japan’s Nikkei recovered and ended higher after plunging sharply in early trades presumably on some heavy selling by hedge funds. Chinese market ended at an over two-month high, boosted by gains in heavyweight financial counters and property developers on rotational buying following a retreat in small cap stocks. Hong Kong market went home with green mark with heavyweight China Taiping Insurance surging nearly 12% after it announced a $13.3 billion restructuring plan while its rivals slipped on a downgrade.