Benchmarks extend early gains; trade at intra-day high levels

Indian equity benchmarks extended early gains to continue firm trade in afternoon session, hovering near the intra-day high level of the day on account of buying witnessed in frontline blue chip stocks including Hindalco Inds, Gail India and SSLT among others. Sentiments got some support from report that foreign institutional investors (FIIs) bought shares worth a net Rs 198.53 crore on March 3, 2014. Further, the reports that the government is considering a proposal to allow companies to issue depository receipts like ADR and GDR against debt instruments, in a bid to deepen financial markets also added to the optimistic sentiments. Investors were seen piling up position in metal, consumer durables and oil and gas stocks. Metal was the top gaining index on BSE up by around 1.62%.

Ramco Systems' shares locked in upper circuit of 5% at Rs 220 on the BSE after Malaysia Airlines announced a strategic partnership with the company for a suite of critical enterprise-wide engineering solutions. Shares of Hindustan Construction Company (HCC) surged almost 6% to Rs. 13.95 after the company announces its joint venture with GVPR Engineers (GVPR). AstraZeneca Pharma India, extending its previous session 20% surge, has rallied nearly 9% to around Rs 1,209, ahead of its board meeting tomorrow to consider the delisting proposal received from the promoter.

On global front, Asian equity indices were trading mixed with Shanghai Composite declined by around 0.53% as global investors turned cautious over increasing tension between Ukraine and Russia. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,250 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,309 stocks traded, 1,284 stocks advanced, while 896 stocks declined on the BSE.

The BSE Sensex is currently trading at 21,081.95 up by 135.30 points or 0.65% after trading in a range of 21,101.77 and 20,940.39. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.73%, while Small cap index up by 0.69%.

The gaining sectoral indices on the BSE were Metals up by 1.62%, Consumer Durables up by 1.36%, Oil and Gas up by 0.80%, Bankex up by 0.75% and FMCG up by 0.61%. While, Healthcare down by 0.76%, Realty down by 0.64%, Auto down by 0.62% and IT down by 0.12% were the losing indices on BSE.   

The top gainers on the Sensex were Hindalco Inds up by 3.93%, Gail India up by 2.81%, SSLT up by 2.32%, Tata Power up by 1.79% and HUL up by 1.71%. On the flip side, Dr Reddy’s Lab down by 1.82%, Tata Motors down by 1.11%, Maruti Suzuki down by 0.94%, Bajaj Auto down by 0.94% and Sun Pharma down by 0.74%.

Meanwhile, In order to help the cash-starved sugar industry to pay arrears to sugarcane farmers, the government notified export subsidy of Rs 3,300 per tonne on raw sugar shipments undertaken during the February-March period. As per the notification, the subsidy will be calculated every two months after taking into account the average exchange rate of rupee vis-a-vis the dollar.

According to the government notification, sugar factories, which produce raw sugar and undertake export either by themselves or through exporters will be eligible for this incentive provided from the Sugar Development Fund. The date of shipment would be the basis for determining the incentives. The incentive will be for 40 lakh tonnes of raw sugar produced and exported during 2013-14 and 2014-15 sugar seasons. To ensure the effective utilisation of released subsidy, sugar mills should either open a separate no-lien bank account or furnish details of the same at the time of submission of the claim.

The government has offered export cash subsidy to sugar mills because the industry faces a liquidity crunch with prices of the sweetener falling below the cost of production. At present, arrears to cane farmers have mounted to about Rs 10,000 crore. During December ’2013, the government had also approved Rs 6,600 crore interest-free loans to sugar industry for making payments to sugarcane farmers. India, world's second biggest sugar producer and largest consumer, only makes white sugar for domestic consumption and does not manufacture raw sugar. Meanwhile, the raw sugar segment is presenting a lot of exports opportunities for the country.

The CNX Nifty is currently trading at 6,258.05 up by 36.60 points or 0.59% after trading in a range of 6,258.30 and 6,215.70. There were only 37 stocks advancing against 13 declining on the index.

The top gainers of the Nifty were Hindalco Inds up by 4.07%, Gail up by 3.26%, IDFC up by 3.00%, SSLT up by 2.69% and Tata Power up by 2.04%. On the flip side, Dr Reddy’s Lab down by 1.88%, DLF down by 1.37%, Ranbaxy down by 1.26%, JP Associates down by 1.23% and Maruti Suzuki down by 0.87% were the major losers on the index.

Most of the Asian equity indices were trading mixed; Nikkei 225 soared 74.34 points or 0.51% to 14,727.23, Hang Seng surged by 139.48 points or 0.62% to 22,640.15, Straits Times was up by 24.03 points or 0.78% to 3,111.47.

On the flip side, Shanghai Composite declined by 10.60 points or 0.53% to 2,064.34, Seoul Composite contracted by around 0.50% to 1,955.15, Jakarta Composite slipped around 0.16% to 4,576.98, KLSE Composite down by 0.28% to 1,819.63, and  Taiwan Weighted was down by 0.33% to 8,573.39.