 "A man looks at a screen across a road displaying the Sensex on the facade of the Bombay Stock Exchange (BSE) building in Mumbai")
Markets have held on to early gains in late morning deals with the S&P BSE Sensex hovering near the 26,000 mark ahead of the futures & options (F&O) expiry for May series contracts later today. The BSE benchmark had rallied 575 points a day earlier. On the other hand, the Nifty 50 index gained 0.5%, or 41 points, to 7,975 levels on Thursday.
Broader markets, too, showed strength with the S&P BSE Mid-cap and the S&P BSE Small-cap indices gaining nearly 0.5% each at 11 am.
"The outlook is positive and stocks may see follow through buying. The F&O expiry could see the usual choppiness but the bias remains positive for now. The cost of carry for few blue-chip stocks like Kotak Mahindra Bank, M&M, Axis Bank and HDFC is very high and this could lead to lower rolls. Either cost of carry reduces through the day or the last few minutes could see cash-based buying which could prop up the indices," said an IIFL morning note.
Other markets across Asia traded mixed with Japan's Nikkei surging 0.3% but MSCI's broadest index of Asia-Pacific shares outside Japan was almost flat, struggling to extend its rebound from Tuesday's 12-week low. It had gained 1.2% on Wednesday.
On the other hand, Shanghai shares fell more than 1%, with sentiment frail after a series of disappointing economic data earlier this month and fears that policymakers may be taking a more cautious stance on further stimulus as debt levels grow.
OIL PRICES
Brent crude oil rose above $50 a barrel for the first time in nearly seven months on Thursday but Asian shares struggled to gain traction, with worries about US interest rates and China's slowing economy keeping many investors on the sidelines.
While energy stocks outperformed, a slump in mainland China stocks to 2-1/2 month lows dampened any broader interest in riskier assets in Asia, offsetting overnight gains on Wall Street.
STOCKS IN NEWS
Back home, modest gains were visible across interest rate sensitive stocks with banking, automobile indices firming up nearly 0.5% each on the National Stock Exchange (NSE) at 11am.
Among individual stocks, Federal Bank, YES Bank, Bank of Baroda, Kotak Bank from the banking sector; and TVS Motor, Bharat Forge, Ashok Leyland and M&M from the auto space were among the top gainers.
Larsen & Toubro (L&T) has rallied 12% to Rs 1,448 on the National Stock Exchange (NSE) in early morning trade on Thursday, after the company reported a better-than-expected net profit and revenues for the fourth quarter ended March 31, 2016 (Q4FY16) a day earlier.
Despite the positive results, analysts at Religare Institutional Equities have maintained a sell rating on the stock.
"The Q4FY16 results were ahead of estimates on account of higher margins, which management attributed to execution progress and lower commodity costs. The company has guided to FY17 sales/order inflow growth of 12-15%/15%, and expects margins to trend up by 50bps y-o-y. We recalibrate our estimates, which leads to upgrade our FY17E/FY18E EPS by 10%/7%. We however maintain SELL (March’17 target price Rs 1,000) as capital misallocation decisions of the past are unlikely to be addressed within expected timelines," Misal Singh and Prashant Tiwari of Religare said in a report.
Ujjivan Financial and Sharda Cropchem are the other buzzing stocks of the day.
