Local bourses gain further ground; Sensex entices gain of over 100 points

Local bourses have moved higher tracking gains in other Asian peers, also as buying gained momentum in the local equity market. Covering up of pending short positions by speculators prior to monthly expiry in the derivatives segment has mainly supported the recovery of the 50 scrip barometer index on National Stock Exchange-Nifty which fell to a 12 week low level in the previous trading session. Positive global cues have helped the benchmarks to climb higher since the inception of trade on Thursday. Further slew of positive results coupled with the surge of the Index heavyweights - Reliance Industries has mainly buoyed the sentiment at Dalal Street. Tata Steel has gained over 2% after reporting stellar number for FY11. On consolidated basis  the group has posted a profit after taxes, minority interest and share of profit of associates of Rs 8982.69 crore for the year ended March 31, 2011 as compared to net loss of Rs (2009.22) crore for the year ended March 31, 2010. Further, Cairn India is also enticing gain of over 2% on reporting 10 folds jump in its Q4 FY11 consolidated net profit. On consolidated basis, the Group's net profit for the quarter ended March 31, 2011 has zoomed by 902.40% at Rs 2457.79 crore as compared to Rs 245.19 crore for the quarter ended March 31, 2010. Meanwhile, Coal India has also surged over 2.50% after reporting 13% rise in its FY11 consolidated net profit. The group has posted a net profit of Rs 10867.35 crore for the year ended March 31, 2011 as compared to Rs 9622.44 crore for the year ended March 31, 2010.

On the global front, U.S. stocks ended a three-day losing streak on Wednesday as recent underperformers led a thinly traded rally that wasn't seen as strong enough to overcome worries about waning global demand. Meanwhile, the Asian shares were trading higher led by commodity and consumer-related sectors. The US future indices too are showing an uptick in the screen trade.

Back home, stocks from Metal, Consumer Durable and Bankex space were enticing maximum investor's attention, however, stocks from Consumer Durable, Information Technology and TECk counters were the only week spells in the trade. The 30 scrip sensitive index on Bombay Stock Exchange (BSE) - Sensex - accumulating over 100 points is trading near to its intra days' high. Similarly, the broadly followed index on National Stock Exchange (NSE) - Nifty - is at sniffing distance of 5,400 mark. The broader indices are enticing gains close to 0.50%.The overall market breadth is widely in the favour of advances which outnumbered declines in the ratio of 1308:791, while 103 shares remained unchanged

The BSE Sensex is currently trading at 17,956.48, up by 109.24 points or 0.61%. The index has touched a high and a low of 17,998.67 and 17,862.88 respectively. There were 23 stocks advancing against 7 declines on the index.

The broader indices too added some more gains in line with the benchmarks; the BSE Mid cap and Small cap indices gained 0.44% and 0.66% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 1.72%, Oil & Gas up by 1.46%, Bankex up by 0.83%, Auto up by 0.65% and PSU up by 0.54%. While, CD down by 0.17%, IT down by 0.08%, TECk down by 0.02% were the only losers on the index.

The top gainers on the Sensex were Tata Steel up by 2.67%, Sterlite Inds up by 2.59%, RIL up by 2.19%, Tata Motors up by 2.13% and Hindalco Inds up by 1.92%.

On the flip side, M&M down by 1.14%, Infosys down by 0.64%, ITC down by 0.63%, BHEL down by 0.57% and Cipla down by 0.43% were the top losers on the index.

Meanwhile, the Organization for Economic Cooperation and Development (OECD) has projected the Indian economy to expand 8.5 percent in 2011-12, much lower than the growth of 9.6 percent witnessed in 2010-11 financial year, indicating that economic expansion would be slower.The OECD stated that India's growth slowed to a more sustainable pace towards the end of 2010, after strong post-crisis rebound driven by a surge in private investment. Going forward, growth will pick up somewhat, underpinned by buoyant corporate sentiment and demand for infrastructure spending. Tighter monetary policy and a modest reduction in the deficit will help cool demand somewhat.

The OECD a group of 34 developed and developing nations worldwide regularly turn to one another to identify problems, discuss and analyze them, and promote policies to solve them. It has stated that after moderating towards the end of 2010, inflation has veered up again and remains high. Moreover, inflationary pressures have become more generalized, with non-food prices accelerating, the OECD also stated that further liberalization of foreign direct investment in the retail sector would promote competition and help modernize supply chains, thereby reducing food inflation pressures.

The recent development is much in line with RBI lowering its gross domestic product (GDP) forecast for FY-12 to 8 percent, sharply lower than the 9 per cent estimates of the Government. RBI Governor D Subbarao, during his policy review in the beginning of the month has stated that facing downside risks including sovereign debt problems in the euro-zone, high commodity prices, especially of oil, and accentuation of inflationary pressure in the emerging market economies, the Indian economy is likely to grow 8 per cent in 2011-12. Not only that, later on Finance Minister Pranab Mukherjee too has conceded that it would not be possible to achieve the targeted GDP growth rate of nine per cent during the current fiscal owing to volatility in global commodity prices. However, he expressed confidence that headline inflation has moderated to 7.0-7.5 per cent from the current high of near nine per cent.

Two other international bodies, the International Monetary Fund and the World Bank too had forecast that India's economy would grow at 8 per cent and 9 per cent, respectively. Prior to that ADB has also lowered its growth forecast for the Indian economy to 8.2% for the current fiscal from the earlier projection of 8.7% on the back of surging global oil prices and the RBI's tight monetary policy.

The S&P CNX Nifty is currently trading at 5,383.30, up by 34.35 points or 0.64%. The index has touched a high and low of 5,392.80 and 5,356.35 respectively. There were 35 stocks advancing against 14 declines on the index, while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Tata Steel up by 2.74 %, Sterlite Inds up by 2.68%, Reliance Inds up by 2.25%, Hindalco up by 2.20% and Tata Motors up by 2.09%.

M&M down by 1.26%, Ambuja Cement down by 1.02%, BPCL down by 0.89%, Ranbaxy down by 0.79% and IDFC down by 0.74% were the major losers on the index.

All the Asian markets barring Straits Times were trading in the green; Shanghai Composite rose by 0.52%, Hang Seng gained 0.49%, Jakarta Composite inched higher by 0.75%, KLSE Composite was up by 0.59%, Nikkei 225 surged by 1.20%, Seoul Composite gained 2.41% and Taiwan Weighted advanced by 0.87%.

On the flipside Straits Times down by 0.12% was the only loser in the Asian pack.

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