Benchmarks add gains to trade in green

Indian equity markets added gains to continue firm trade hovering near the highest point of the day in the late afternoon session on account of buying in front line blue chip counters and taking cues from European counterparts. The sentiments on the street turned some what positive after Montek Singh Ahluwalia, deputy chairman of the planning commission stated that fiscal deficit is clearly coming under control. The country’s fiscal deficit fell to 4.9% of GDP in the fiscal year ended March and the government targets it at 4.8% in the current fiscal year. Traders were seen piling position in Realty, Capital Goods and Bankex stocks while selling was witnessed in Health Care, Metal and Oil & Gas sector stocks. In the scrip specific development, Larsen & Toubro (L&T) was trading in green after brokerage house CLSA initiated overweight report on the stock. Den Networks was trading in green on receiving nod for preferential allotment to Goldman Sachs affiliates. The shareholders approved issue of shares worth $110 million at Rs 217.5 per share to affiliates of Goldman Sachs. Jewellery makers like Titan Industries, Tribhovandas Bhimji Zaveri, Rajesh Exports etc edged lower after government increased customs duty on gold by two percentage points to eight percent, to arrest rising gold imports, which could widen the current account deficit (CAD).

On the global front, all the Asian markets were trading in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,900 and 19,500 levels respectively. The market breadth on BSE was negative in the ratio of 1000:1143, while 141 scrips remain unchanged.

The BSE Sensex is currently trading at 19,569.24, up by 1.02 points or 0.01% after trading in a range of 19,575.00 and 19,395.32. There were 12 stocks advancing against 18 declines on the index.

The broader indices were too trading in green; the BSE Mid cap and Small cap index were trading higher by 0.14% and 0.12% respectively.

The only gaining sectoral index on the BSE was, Realty up 1.10%, Capital Goods up by 0.88%, Bankex up by 0.69% and Auto up by 0.27%. While, Health Care down by 0.80%, Metal down by 0.47%, Oil and Gas down by 0.44%, Power down by 0.26% and TECK down by 0.24% were the top losers on the BSE.

The top gainers on the Sensex were L&T up by 1.32%, HDFC up by 1.31%, Wipro up by 1.20%, Maruti Suzuki up by 1.17% and ICICI Bank up by 1.08%. On the flip side, Bharti Airtel was down by 2.37%, Tata Steel was down by 1.69%, NTPC was down by 1.53%, Hindalco Industries was down by 1.42% and Gail India was down by 1.32% were the top losers on the Sensex.

Meanwhile, in an attempt to rein in surging demand for the precious metal like gold, the government has raised the import duty to 8% from 6% for the second time in six months. India is the largest consumer of gold and the recent drop in its price has further boosted demand. This move is likely to result in a sharp decline in shipments over the next couple of months.

In May, India’s gold imports touched 162 tonnes, while in April, it was around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. Strong demand of gold has become a worrying factor for the Indian policymakers, as the country is facing a record current account deficit (CAD), partly stoked by Indian consumers’ appetite for the yellow metal. The CAD widened to a record high of 6.7% in the third quarter of FY13. 

Recently, the World Gold Council (WGC) report highlighted that India’s gold imports in April-June quarter of 2013 may increase by 200 percent y-o-y to around 300-400 tonnes, which would be almost half the imports of whole of 2012. However, to curb the gold import, the government has been taking steps regularly, including raising import duty. Further, the RBI too had put restrictions on banks on gold imports.  

The CNX Nifty is currently trading at 5,928.55 up by 4.70 points or 0.08% after trading in a range of 5,930.55 and 5,869.50. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Axis Bank up by 2.95%, HCL Technologies up by 2.63%, Reliance Infrastructure up by 2.56%, DLF up by 2.43% and Bank of Baroda up by 2.04%. On the flip side, Bharti Airtel down by 2.55%, GAIL India down by 1.65%, Lupin down by 1.57%, Tata Steel down by 1.54% and Hindalco Industries down by 1.41% were the major losers on the index.

Asian equity indices were trading in red; Hang Seng declined 1.05%, KLSE Composite slipped 0.20%, Straits Times tumbled 1.25%, Nikkei 225 declined by 0.85% and Taiwan Weighted was down by 1.05%.

Stock markets in China, Indonesia and South Korea remained shut on account of public holidays.

The European markets were trading in green; France’s CAC 40 was up 0.31%, Germany’s DAX added 0.15% and the United Kingdom’s FTSE 100 edged higher 0.11%.