Benchmarks pare some gains but continue to trade firm

Markets are witnessing mild profit booking after showing a firm trade in opening session.Though, the indices are still holding comfortably in green but some traders worried of global jitters are opting to book profit at the higher levels. Continued weakness is being seen in IT major Infosys after it reported a weaker than expected first quarter numbers yesterday. The other IT counter, Wipro too was in somber mood and has collectively dragged the IT index on the BSE in red. Meanwhile, the rate sensitive sector's CD and realty are keeping the momentum going for the markets in the mid-morning trade. Healthcare sector has spurted with the help of gain in pharma major Dr Reddy's after it received the final approval from the U.S. Food and Drug Administration to sell a generic version of GlaxoSmithKline PLC's Arixtra injection, which prevents blood clots after surgery, the stock is up by good over 3 percent.

The BSE Sensex is currently trading at 18,517.25, up by 105.63 points or 0.57%. The index has touched a high and low of 18,577.67 and 18,465.40 respectively. There were 26 stocks advancing against just 4 declines on the index.

The broader indices continue to outperform the benchmarks; the BSE Mid cap and Small cap indices were up by 0.91% and 0.89% respectively.

The top gaining sectoral indices on the BSE were, CD up by 1.43%, Realty up by 1.37%,PSU was up by 0.90%, HC was up by 0.87% and Auto was up by 0.87%. While, IT down by 0.06% was the lone loser on the BSE.

The top gainers on the Sensex were DLF up by 1.82%, ONGC up by 1.47%, TCS up by 1.38%, JP Associates up by 1.25% and M&M was up by 1.24%.

On the flip side, Cipla down by 1.01%, Infosys down by 0.95%, Wipro down by 0.59% and tata Power down by 0.39% were the losers on the index.

Industrial growth has slowed down in the month of May. Index of Industrial Production (IIP) has come in at 5.6% on a year-on-year basis. However, the market expected it to be at 8.6%. The lower than expected growth is due to the poor performance of manufacturing and mining output. On the other hand, industrial output for the first two months of current financial year also reduced significantly. As per the official data, Index of Industrial Production (IIP) for April-May 2011 stood at 5.7% which is less than the 10.8% achieved last year in the same period. This moderation in industrial growth is viewed as negative effects of increased interest rate, and input costs.

According to data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, the General Index for the month of May 2011 stands at 165.3, which is 5.6% higher as compared to the level in the month of May 2010. The cumulative growth for the period April-May 2011-12 stands at 5.7% over the corresponding period of the previous year. As per the old series, IIP for May grew by 3.6% from 4.4% in April and cumulative growth for April-May stood at 4% over last year.

The IIP for Manufacturing, Mining and Electricity sectors for May 2011 increased by 5.6%, 1.4% and 10.3% compared to May 2010. The cumulative growth in the three sectors in April has been 6%, 1.3%, and 8.4% respectively, as a result the General index increased to 5.7%. As per the old series, the IIP for the Mining, Manufacturing and Electricity sectors for May 2011 was recorded at 1.2%, 3.2% and 10.3%, respectively, as compared to May 2010. The cumulative growth during April-May, 2011-12 over the corresponding period of 2010-11 in these three sectors have been 1.6%, 3.7% and 8.4% respectively, which moved the overall growth in the General Index to 4.0%.

For the month of May 2011, in terms of Industries, 14 out of 22 industry groups in manufacturing sector have shown positive growth as compared to same month in last year. The industry group 'Medical, precision and optical instruments, watches and clocks' has shown the highest growth of 42.9%, followed by 36.4% in 'Office, accounting and computing machinery' and 23.1% in 'Motor vehicles, trailers and semi-trailers'. On the other hand, the industry groups 'Textiles' and 'Wood and products of wood and cork except furniture; articles of straw and plating materials' have shown the highest negative growth of 6.6% each.

According to Use-based classification, the growth rates in May 2011 over May 2010 are 7.2% in Basic goods, 5.9% in Capital goods and 0.9% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 5.2% and 5.6% respectively, with the overall growth in Consumer goods being 5.4%. The other important items showing highly positive growth during the month are: 'Sugar' (92.8%), 'Printed Circuit Board/Plate' (63.7%), 'Woollen Carpets' (58.0%), 'Indust. Alcohol (Rectified/Denatured Spirit)' (49.9%), 'Vitamins' (48.2%), 'Computers' (42.6%), 'Textile Machinery' (41.3%), 'Ship Building & Repairs' (38.1%), 'Oil, Lubricating' (33.3%) and 'Commercial Vehicles' (32.1%).   According to the old series, in the Use-based classification, the Sectoral growth rates in May 2011 over May 2010 are 6.8% in Basic goods, (-) 0.6% in Capital goods and 1.9% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 6.7% and 3.1% respectively, with the overall growth in Consumer goods being 4.2%.

The S&P CNX Nifty is currently trading at 5,561.75, up by 35.60 points or 0.64%. The index has touched a high and low of 5,578.90 and 5,541.40 respectively. There were 44 stocks advancing against 6 declines on the index.

The top gainers of the Nifty were Dr Reddy's up by 3.38%, IDFC up by 2.18%, DLF up by 1.74%, ONGC up by 1.63% and TCS was up by 1.60%.

Cipla down by 0.90%, Infosys down by 0.77%, Tata Power down by 0.71%, Wipro down by 0.68% and Ambuja Cements down by 0.49% were the major losers on the index.

Most of the Asian equity indices were trading in the green. KLSE Composite was marginally down by 0.10% and Taiwan Weighted has lost 0.39%.

On the other hand, Shanghai Composite was up 1.21%, Hang Seng was up 0.95%, Jakarta Composite was up 0.64%, Nikkei 225 was up 0.17%, Straits Times was up 0.33% and Seoul Composite was up by 0.46% 

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