Reforms rhetoric help markets hover near all time highs

Markets edged higher in afternoon trades as President Pranab Mukherjee told parliament on Monday that the new government will pursue a broad economic reform agenda focused on job creation through public and private investment that also makes containing inflation its top priority.

Also the encouraging FII data helped aided the investor sentiment. Overseas investors bought shares worth 12.83 billion rupees on Friday, provisional exchange data shows.

At 1410 hrs, the Sensex was up 204 points at 25,600 and the Nifty gained 80 points to trade at 7,663. Earlier in the day, the Sensex had hit a high of 25,645.
    

Meanwhile, buying interest prevailed in the broader markets. The smallcap index rose nearly 2% and the midcap index was up 1.5%, both outperforming the BSE benchmark index which was up nearly 0.8%.

Except Oil & Gas index which was down 0.8%, buying was visible across the sectors including the defensives.

Realty index climbed nearly 6% along with Capital Goods, Power. Metal, Consumer Durables and Auto indices, gained 2-3%.

Oil & Gas majors ONGC and Reliance Industries declined 2.7% and 0.4% respectively.

M&M, SBI, Infosys and Axis Bank, NTP and HUL were the only other names in red among Sensex-30.

Among the gainers were Bajaj Auto and Coal India up over 5% each and were the top gainers in noon deals.

L&T, Tata Power, Tata Motors, Tata Steel, Hero MotoCorp and Maruti Suzuki up 2-3.3% were some of the notable gainers.

Shares of rail stocks are in demand with most of them locked in upper circuit after President Pranab Mukherjee in his address to the Joint Session of Parliament today said that the government will launch a diamond quadrilateral project of high-speed trains.

Titagarh Wagons, Kalindee Rail Nirman , Texmaco Rail and Engineering and Kernex Microsystems are frozen at maximum higher limit of the day on the BSE.

Most of these stocks have rallied between 30-70% after a  victory of Narendra Modi-led Bharatiya Janata Party in the general elections.

Among the individual stocks, Texmaco Rail and Engineering has surged 10% to Rs 113, while Kernex Microsystems (Rs 76), Kalindee Rail Nirman (Rs 109) and Titagarh Wagons (Rs 298) locked in upper circuit of 5% on the BSE.

The market breadth was very positive on the BSE thanks to the gains in broader markets. 2,195 stocks advanced while 785 stocks declined.

Asian Markets

Asian stocks touched their highest levels in nearly three years on Monday, basking in the glow of a record close on Wall Street after bright U.S. jobs data pointed to improving economic momentum.

MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.3%, after reaching its highest levels since July 2011.

Japan's Nikkei stock average advanced 0.4%. Japan posted a lower-than-expected surplus in April, as income gains from overseas investments narrowed and the trade deficit widened. Still, it marked the third consecutive month of surpluses.

Other data on Monday showed Japan's economy grew 1.6% in January-March from the previous quarter, revised up from a preliminary 1.5% expansion due to faster growth in capital expenditure.