Benchmarks continue firm trade supported by reality and banking stocks

Indian equity benchmarks extended early gains and were trading near intra-day high level in afternoon session, supported by gain in front line blue chip stock such as Hindalco, HDFC and ICICI Banks among others. There was no sense of any profit booking since morning and almost all the sectoral indices on the BSE were trading firm. However, there was a mild weakness in the defensive healthcare sector. Hopes of a stable government at the Centre after the ongoing general elections and high foreign institutional investors (FIIs) inflows encouraged the markets to extend their gains. FIIs were net buyers in Indian equities and bought shares worth Rs 363.24 crore in the previous session.  Sentiments also got a boost after Finance Minister P Chidambaram stated that Indian economy has stabilized and was about to see a revival in the investment, leading to high growth in future. Realty was top gainer index on BSE trading up by over 2.20% followed by banking and capital goods indices, both up by over 1.80%. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices trading up by over 0.50%. Finolex Cables, extending its previous day’s 10% rally, has surged another around 7%, after reporting a 79% yoy jump in net profit at Rs 69.30 crore for Q4 FY14. Bharat Forge was trading higher by 3% after the company said that its German subsidiary has won a multiyear contract worth EUR 250 million from a German OEM to supply suspension components. Further, Ahmednagar Forging surged around 12% after reporting a 46% yoy growth in net profit at Rs 55.53 crore for Q4 FY14. On global front, most of the Asian equity indices were trading in green. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,700 and 22,500 levels respectively. The market breadth on BSE was positive, out of 2,226 stocks traded, 1,275 stocks advanced, while 842 stocks declined on the BSE. The BSE Sensex is currently trading at 22,607.64 up by 263.60 points or 1.18% after trading in a range of 22,612.30 and 22,317.18. There were 26 stocks advancing against 4 stocks declining on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.61%, while Small cap index up by 0.50%. The gaining sectoral indices on the BSE were Realty up by 2.21%, Bankex up by 1.83%, Capital Goods up by 1.82%, Power up by 1.59%, and Auto up by 0.98%. While, Healthcare down by 0.39% was the only losing index on BSE.    The top gainers on the Sensex were Hindalco Inds up by 3.33%, HDFC up by 2.42%, ICICI Bank up by 2.37%, L&T up by 2.22% and HDFC Bank up by 2.12%. On the flip side, Dr Reddy’s Lab down by 0.94%, Sun Pharma down by 0.50%,SSLT down by 0.31% and Gail India down by 0.05%. Meanwhile, the services and manufacturing activities across emerging markets recovered slightly in the month of April. The HSBC Composite Emerging Markets Index, based on the survey of around 8,000 firms in 17 countries, inched up to 50.4 in April, from 50.3 in March. However, the HSBC survey showed falling output in the four largest emerging economies. It noted that manufacturing output across largest emerging markets was broadly stagnant in April, while services activity growth remained weak in the reported month. Indian business activity fell for the ninth time in ten months with HSBC India Composite Output Index coming at 49.5 in the reported month.  Among other emerging economies, overall business activity across the Chinese manufacturing and services sectors declined for the third consecutive month in April, while private sector output in Russia fell at the fastest rate since May 2009. Brazil too posted a modest decline for the second time in four months at 49.9 in April. The survey further highlighted that the volume of new business across the sector rose marginally from March’s eight-month low. Backlogs of work fell for the fourth month running while a marginal cut in employment too was signalled. On inflation front, the survey noted that cost pressures remained subdued in April, as average input prices increased at the slowest rate since June 2013. Firms across emerging economies are not expecting any upturn about the year ahead, as the HSBC Emerging Markets Future Output Index which tracks firms' expectations for activity in 12 months' time fell to a new low in April mainly due to sharp weakening in output expectations in Brazil, Mexico and China. The HSBC survey expects that the prevailing slowdown in emerging market will continue to act as a dampener on global economic growth in coming months. The CNX Nifty is currently trading at 6,740.15 up by 80.30 points or 1.21% after trading in a range of 6,742.70 and 6,652.15. There were 44 stocks advancing against 6 declining on the index. The top gainers of the Nifty were Hindalco up by 3.18%, IDFC up by 3.13%, Ambuja Cements up by 2.64%, DLF up by 2.61% and ICICI Bank up by 2.49%. On the flip side, Dr Reddy’s Lab down by 0.86%, Sun Pharma down by 0.54%, SSLT down by 0.31%, Lupin down by 0.24% and Cairn down by 0.03% were the major losers on the index. Asian equity indices were trading in green; Hang Seng up by 0.01% to 21,839.56, Nikkei 225 up by 0.19% to 14,190.86, Straits Times was up by 0.14% to 3,252.36 and Jakarta Composite up by 0.17% to 4,869.18. While,  Shanghai Composite down by 0.02% to 2,015.04 and Taiwan Weighted down by 0.46% to 8,889.90.