Indian equities add gains; trade at highest point of the day

Indian equity markets added gains hovering near the highest point of the day on account of buying in frontline blue chip counters and taking cues from European counterparts. The sentiments continued on positive note despite trade deficit in May widened to $20.1 billion from $17.8 billion a month ago on high imports of cheaper gold, increasing pressure on the current account balance. Traders were seen piling position in Capital Goods, Health Care and Consumer Durables stocks while selling was witnessed in Metal, PSU and Realty sector stocks. In the scrip specific development, Jet Airways was trading weak after foreign investment regulator deferred the decision on stake sale deal with Gulf-based Etihad Airways. Larsen & Toubro (L&T) was trading in green on reports that the company will bid for four Indian coast guard contracts worth Rs 4,000 crore.

On the global front, all the Asian markets were trading in green barring KOSPI Composite and Shanghai Composite while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,800 and 19,200 levels respectively. The market breadth on BSE was negative in the ratio of 1048:1077, while 118 scrips remain unchanged. 

The BSE Sensex is currently trading at 19,290.92, up by 112.99 points or 0.59% after trading in a range of 19,299.39 and 19,084.68. There were 17 stocks advancing against 13 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.06% and Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.06%, Health Care up by 0.79%, Consumer Durables up by 0.56%, Oil & Gas up by 0.49%, and TECK up by 0.44%, while Metal down by 0.36%, PSU down by 0.15% and Realty down by 0.05% were the top losers on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.91%, Sun Pharma up by 3.06%, HDFC up by 2.39%, Maruti Suzuki up by 2.31%, and BHEL up by 2.27%. On the flip side, Sterlite Industries was down by 1.63%, Hindalco Industries was down by 1.54%, Dr. Reddy’s Lab was down by 1.09%, TCS was down by 0.78% and Gail India was down by 0.74% were the top losers on the Sensex.

Meanwhile, increasing pressure on the current account balance, India’s May trade deficit widened to $20.1 billion from $17.8 billion a month ago mainly on account of high imports of cheaper gold. Overall trade deficit for April-May, 2013-14 was estimated at $379.30 billion which was higher than the deficit of $309.72 billion during same period previous fiscal.

Exports for the month fell 1.1% to $24.51 billion than the level of $24.77 billion recorded in the same month previous fiscal, the first annual fall in five months. On the other hand, on cumulative basis, value of exports for the period April-May 2013-14 was $486.70 billion as against $485.68 billion, registering a growth of 0.21%.

Merchandise imports rose about 7% to $44.65 billion over the level of imports valued at $41.73 billion in May 2012. Cumulative value of imports for the period April-May, 2013-14 was $866.00 billion as against $795.40 billion registering a growth of 8.88%. Gold, silver imports were up 89.7% year-on-year at $8.9 billion. The imports of the two precious metals more than doubled in April-May period to $15.88 billion.

Oil imports for the reporting month was valued at $15.02 billion which was 3.05% higher than $14.57 billion in the corresponding period last year. Similarly, non-oil imports during the month were at $29.62 billion which was higher by 9.10% than $27.15 billion recorded in May, 2012.

Strong demand of gold has become a concern for 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 rupee fell to its lifetime low level of over 58.90 against dollar because of the high CAD, which widened due to rising gold import and high crude oil prices. Further, persistent dollar demand from importers and banks also added to the fall in rupee value.

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. In a move to curb the gold import, the government recently hiked the import duty on gold to 8% from 6% earlier. Further, the RBI too had put restrictions on banks on gold imports.

The CNX Nifty is currently trading at 5,841.00 up by 32.60 points or 0.56% after trading in a range of 5,845.20 and 5,770.25. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were M&M up by 5.16%, Sun Pharma up by 3.04%, BHEL up by 2.41%, Maruti Suzuki up 2.37% and HDFC up by 2.29%. On the flip side, Ranbaxy down by 3.54%, Hindalco Industries down by 1.54%, Sesa Goa down by 1.48%, NMDC down by 1.23% and Dr. Reddy’s Lab down by 1.06% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng surged 1.22%, Jakarta Composite jumped 0.24%, KLSE Composite increased 0.55%, Nikkei 225 soared 2.73%, Straits Times added 0.69% and Taiwan Weighted was up by 0.69%.

On the flip side, KOSPI Composite was down by 0.32% and Shanghai Composite down by 0.27%.

The European markets were trading in green; France’s CAC 40 was up 1.16%, Germany’s DAX added 1.14% and the United Kingdom’s FTSE 100 edged higher 0.59%.