Benchmarks pair some early gains; continue to trade in green

Indian equity benchmarks after showing outperformance in early trades, were consolidating in the afternoon session, coming off their high points of the day. However, major indices managed to remain in green supported by firm global cues and buying witnessed in banking, realty and metal stocks. Furthermore, gains in frontline blue chip stocks such as Hindalco, Tata steel and Dr Reddy too provided support to the market. Banking index on BSE was up by around 0.70% as the Reserve Bank of India (RBI) extended deadline for banks to implement global capital norms, Basel III, by a year to March 2019 amid concerns over the asset quality and profitability of the banks. There was a considerable weakness in FMCG and capital goods stocks restraining markets to extend gains. The broader markets were outperforming the benchmarks with quiet a margin, while most of the sectoral indices too continued to retain their gains.

Lakshmi Vilas Bank was trading higher by 4% at around Rs 68.90 after the private sector bank said it was in plans to raise Rs 505 crore through a rights issue from its existing shareholders. Dr Reddy’s Laboratories was trading higher by 2% at nearly Rs 2,635 after drug maker said that it has launched generic version of Pfizer's Caduet tablets, a cholesterol-lowering drug, in US market.

On global front, most of the Asian equity indices were trading in green with Nikkei 225 up by 0.33% and Hang Seng up by 1.25% to 22,107.88. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,650 and 22,000 levels respectively. The market breadth on BSE was positive, out of 2,383 stocks traded, 1,344 stocks advanced, while 899 stocks declined on the BSE

The BSE Sensex is currently trading at 22,236.11 up by 21.74 points or 0.10% after trading in a range of 22,363.97 and 22,212.65. 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 0.95%, while Small cap index up by 0.78%.

The gaining sectoral indices on the BSE were Realty up by 1.48%, Power up by 1.12%, Metal up by 0.94%, Oil and Gas up by 0.84% and Bankex up by 0.70%. While, FMCG down by 0.80% and Capital Goods down by 0.69% were the losing indices on BSE.   

The top gainers on the Sensex were SBI up by 3.07%, Hindalco Inds up by 2.59%, Tata Power up by 2.18%, Dr Reddy’s Lab up by 1.74% and Axis Bank up by 1.73%. On the flip side, HDFC down by 1.41%, ITC down by 1.38%, L&T down by 1.20%, HUL down by 1.00% and HDFC Bank down by 0.93%.

Meanwhile, presenting a sluggish outlook of Indian industry, FICCI’s Business Confidence Survey has noted that the industry may witness a weak demand and bleak employment scenario over the next 3 months beleaguered by economic slowdown and prevailing high interest rates. The survey found that despite rising input costs, the availability of credit has also become a problem for the India Inc with almost 53 percent of the companies covered by the survey felt that high cost of credit was creating a problem for them.

The survey found that around 56 percent of the companies indicated that demand has declined by over 10 percent and very few respondents cited an improvement in current performance, as against the last six months. During the period April-January 2013-14, India’s industrial output growth remained flat from a year earlier. FICCI also found negligible improvement in outlook for the coming months with only 24 percent of the companies receiving investments over the next six months. The overall Business Confidence Index value increased to 60.8 in the current survey as compared to 59.8 in the last survey round. Around 67 percent firms expected stagnant employment levels for the next six months.

The FICCI’s survey was based on the responses of about 173 companies having turnover ranging from Rs 1 crore to Rs 3.7 lakh crore in order to bring out expectations of the industry for the period January-June 2014. The survey covered companies belonging to various sectors such as textiles, cement, financial services, chemicals, construction, metal and metal products, automobiles, FMCG, electrical equipment and machinery, paper and paper products.

The CNX Nifty is currently trading at 6,659.75 up by 18.00 points or 0.27% after trading in a range of 6,684.95 and 6,650.25. There were only 36 stocks advancing against 14 declining on the index.

The top gainers of the Nifty were Ultratech Cement up by 4.43%, PNB up by 3.97%, Grasim up by 3.67%, SBI up by 3.18% and Indusind Bank up by 3.07%. On the flip side, HDFC down by 1.43%, ITC down by 1.39%, Jindal Steel down by 1.33%, HUL down by 1.26% and L&T down by 1.25% were the major losers on the index.

Most of the Asian equity indices were trading in green; Straits Times was up by 0.53% to 3,179.60, Jakarta Composite up by 0.79% to 4,760.28, Nikkei 225 up by 0.33% to 14,665.90 and Hang Seng up by 1.25% to 22,107.88. While, Shanghai Composite down by 0.02% to 2,047.96 and Taiwan Weighted was down by 0.06% to 8,774.57.