Markets maintain momentum; Sensex reclaims 25,000

Auto and capital goods stocks are leading the rally this morning.

The markets are going strong this morning, thanks to gains in the auto and capital goods space. The Sensex has reclaimed the crucial psychological level of 25,000, which was first scaled in intra-day trades post the electoral result declaration on May 16, and is now at 25,040, up 347 points or 1.4% and the Nifty has also scaled above the technically crucial level of 7,450 and is now at 7,462, up 95 points. The broader markets have also risen in tandem with their largecap counterparts; the midcap index has jumped 123 points or 1.4% at 8,791 and the smallcap index has gained 137 points or 1.5% at 9,265.

 

The Sensex had opened at 24,913 this morning and has moved from strength to strength thereafter ahead of the swearing-in ceremony of Narendra Modi as India’s 15th Prime Minister scheduled later in the evening. 

 

On the economic front, the rupee has opened higher at 58.44 a dollar, up 8 paise compared to Friday's closing value of 58.52 a dollar.

 

On the global front, Asian stocks have risen in early trades after the S&P 500 closed at a record high on Friday and as geopolitical risks faded following a victory for billionaire Petro Poroshenko in Ukrainian elections. 

 

The auto stocks are having a field run in early trades. M&M has galloped by 4.2% at Rs 1207 to top the gainers list on the BSE. Maruti has gained by 4.2% at Rs 2485 and Tata Motors has added 3.1% at Rs 444.

 

Capital goods are also having a good session, with L&T gaining 3.4% at Rs 1563 and BHEL adding 2.9% at Rs 280. 

 

Banking stocks are also in the limelight, with Axis Bank strengthening by 2% at Rs 1903, ICICI Bank adding 1.5% at Rs 1483 and HDFC Bank adding 1.3% at Rs 800. SBI has extended its stellar gains of 10% on Friday by adding another 0.8% at Rs 2778.

 

On the other hand, the defensive pharma and FMCG stocks are bucking the firm trend. Dr Reddy's has weakened by 0.6% at Rs 2291 and Cipla has edged lower by 0.3% at Rs 385. In the FMCG space, Hindustan Unilever has lost 0.2% at Rs 559 and ITC has slipped by 0.1% at Rs 341.

 

In stock-specific action, Moil has surged 5% to Rs 339 after reporting a healthy 36% year on year (yoy) growth in net profit at Rs 149 crore for the fourth quarter ended March 31, 2014 (Q4FY14), on back of strong operational performance. The state-owned mining company had profit of Rs 110 crore in the same quarter last year.

 

Shrenuj & Company has rallied 15% to Rs 137, also its record high on the BSE, after the company said its board approved the issue of bonus shares in the ratio of 1:1 i.e.  One bonus equity share for every one share held.

 

Sun Pharma has gained 1.9% at Rs 596 and Ranbaxy Laboratories has added 2.5% at Rs 449 after the Andhra Pradesh high court, which had last month issued interim orders restraining the proposed Sun Pharmaceutical-Ranbaxy Laboratories merger following a petition alleging insider trading, on Saturday cleared the decks for the $4-billion deal to go through by lifting the stay.

 

The market breadth is strong. Out of 2281 stocks traded on the BSE, there are 1639 advancing stocks as against 573 declines.