Across the board buying props up Sensex; European cues support

Stock markets in India have climbed to the session’s highs in Tuesday afternoon trades with the benchmark equity indices trading with gains of around three fourth of a percent. The frontline gauges which showed side-ways movement since the start of trade and see-sawed around the previous closing levels have come out of their range bound trajectory and are trending northwards led by Capital Goods and Metal counters. The markets traded on a subdued note for most part of morning trades tracking the apathetic cues from Asian peers as exacerbating concerns over the political and economic stability of the European region dampened investors’ appetite for riskier assets like equities. Investors were cautious after talks to form a new government in Greece failed and stoked fears that the debt laden nation would exit from the single currency union. However, sentiments got a lift after the vulnerable rupee strengthened sharply from a near record low against the dollar after Reserve Bank of India stepped in with massive intervention, signaling intent to defend the beleaguered domestic currency. The rupee appreciated to 53.88 to the dollar, after hitting intraday high of 54.15 after RBI reportedly sold $400- $500 million worth in spot. Moreover, European markets too opened on an encouraging note with gains of close to a percent and provided the much needed support to the domestic bourses. Amid the gloomy environment looming across Europe, the German GDP figures came as the silver lining as it indicated that Europe largest economy grew much more than expected in the first quarter, rising 0.5% q-o-q and 1.2% from the corresponding period last year. Back home, the Capital Goods counter rallied sharply with close to three percent gains thanks largely to bellwether L&T which spurted around five percent on the back of solid fourth quarter performance. The Metal and IT pockets too surged about a percent and supported the frontline indices. However, mild selling pressure was seen in Consumer Durables and rate sensitive Auto pockets which traded with moderate cuts.

Moreover, the broader markets too have pared most of their losses and are displaying a positive tick with the Midcap index trading with gains of around a quarter percent, underperforming their larger peers. The bourses climbed on good volumes of over Rs 0.7 lakh crore while the market breadth on BSE was in favor of advances in the ratio of 1158:1144 while 135 scrips remained unchanged.

The BSE Sensex is currently trading at 16,338.28 up by 122.44 points or 0.76% after trading as high as 16,353.98 and as low as 16,123.04. There were 22 stocks advancing against 8 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index advanced 0.25% and Small cap index added 0.02%.

On the BSE sectoral space, Capital Goods up 2.75%, Metal up 1.05%, IT up 0.95%, Bankex up 0.83 and TECk up 0.65% were the major gainers, while Consumer Durables down 0.36%, Auto down 0.20% and PSU down 0.02% were the major laggards in the space.

L&T up 4.64%, Hero Moto up 2.17%, Jindal Steel up 2.13%, ICICI Bank up 1.92% and Infosys up 1.85% were the major gainers on the Sensex, while NTPC down 1.93%, Maruti down 1.84%, Coal India down 0.65%, Bharti Airtel down 0.47% and M&M down 0.27% were the major losers in the index.

Meanwhile, the government has notified the decision to remove the limit on sugar exports, issuing the notification more than a week after an inter-ministerial meeting, Chaired by Prime Minister Manmohan Singh, it was decided to eliminate ceiling on sugar exports by putting it under the Open General Licence (OGL). The move is likely to help industry export its surplus sugar and clear cane payment arrears to farmers that have mounted to over Rs 10,000 crore.

According to the notification, effective from 11th May, there would be no quantitative restrictions on sugar exports and producers are not required to obtain export release order from the Food Ministry under OGL in the 2011-12 marketing year (October-September) till further orders.

The notification further stated that a trader who has imported raw sugar under the Advance Authorisation Scheme (AAS), under which mills are obligated to export the sweetener after processing, on 'grain-to-grain' basis are also not required to obtain export release order. However, export release order is required for mills exporting sugar under AAS on tonne-to-tonne basis.

As per the notification, exporters are asked to upload details about quantity of sugar shipments through online facility to the Food Ministry within three working days. They are also asked to give details of physical exports. Till April, physical shipments of 1.6 million tonnes of sugar were undertaken. During the 2010-11 marketing year, physical exports had stood at 3.1 million tonnes.

The S&P CNX Nifty is currently trading at 4,943.40, higher by 35.60 points or 0.73% after trading as high as 4,945.60 and as low as 4,868.55. There were 38 stocks advancing against 12 declines on the index.

The top gainers on the Nifty were L&T up 4.80%, Sesa Goa up 3.01%, Hero Moto up 2.42%, BPCL up 2.33% and Cairn up 2.03%.

Maruti down 1.92%, NTPC down 1.86%, IDFC down 1.65%, Coal India down 1.08% and Dr Reddy’s down 0.86% were the major losers on the index.

In the Asian space, Shanghai Composite declined 0.42%, KLSE Composite dropped 0.12%, Nikkei 225 drifted 0.81% and KOSPI Composite dipped 0.77%.

On the other hand, Hang Seng climbed 0.70%, Jakarta Composite added 0.02% Straits Times Index advanced 0.65% and Taiwan Weighted rose 0.24%.

The European markets got off to a positive start as France’s CAC 40 climbed 0.84%, Germany’s DAX rose 0.74% and United Kingdom’s FTSE added 46%.