Indian Markets Close Strong

Indian markets see-sawed between moderate and robust gains as investors await inflation figures. Markets gained as much as 150 points in the early morning trade but then fell over 100 points. Investors turned their attention towards the pharma sector which helped Indian indices close on strong note. BSE Sensex closed today's session with gained of over 165 points while NSE-Nifty closed today's session with gains of over 53 points.

Capital goods and healthcare sector was the largest recipient of funds as they each gained over 1.2%. BSE Mid Cap and BSE Small Cap stocks gained over 1% in the early session, however, retreated from session highs on profit booking. The Auto sector maintained a negative sentiment throughout the trading session.

Commodity prices continue to trade with a negative bias. While the gold prices fell 0.3% or Rs 30; silver prices fell 0.2% or Rs 128. Gold prices, per 10 grams, fell to Rs 26,700 levels while silver prices, per kilogram, fell to Rs 36,600 levels. Crude oil prices retreated from session highs. The crude oil prices fell from gains of about 2.2% to 1.5%. Per barrel, the crude oil is available at Rs 3,270 levels.

The European equities are trading on a mixed note as German equities and FTSE are trading with no movement at all. With release of major economic data during today's trading session, the markets are expected to stay flat. While German equities gained 1.27 points or 0.01%; French equities are trading with losses of 0.02% or 0.96. Euro Stoxx gained 0.2% or 6 points.

Though automobile companies have traded negative in today's trading session; heavy vehicle major Escorts gained over 3% after the company entered into a Joint Venture with Amul Group for manufacturing specialty tractor named Steeltrac. The Steeltrac is a special purpose tractor which helps farmer grows raw-crops which include groundnut, cotton and sunflower. The joint venture will help Escort grow a wider range of products to Indian farmers. Apart from Escorts, Tube Investment was up about 0.5%.

Pharma Helps Market Sustain Gains
03:30 pm

Indian markets eroded mid-session gains on account of profit booking but later gained momentum. While BSE Sensex is trading with gains of 150 points, NSE-Nifty is trading with gains of 50 points. Almost all the sectoral indices are trading in the green, however, metal stocks and automobile stocks continue to trade in the red. Both capital goods and consumer durables have managed to sustain gains of over 1%. BSE Mid Cap and BSE Small Cap stocks are trading in the green with midcap stocks gaining about 0.3%, while smallcap stocks have gained about 1%.

Precious metals extended their losses in second half of the trading session as gold prices fell 0.3% or Rs 82, while silver prices fell 0.4% or Rs 145. Gold prices, per 10 grams, are trading at Rs 26,700 levels, while silver prices, per kilogram, traded at Rs 36,570 levels. Crude oil prices gained 2.3% or Rs 74 and are available at Rs 3,294 per barrel.

The oil & gas sector has managed to stay on the right side of the gains as Reliance Industries gained over 1%. The oil & gas major announced commissioning Purified Terephthalic (PTA) and Polyethylene Terephthalate (PET) plants at Dahej, Gujarat. The installation of PTA plants with a capacity of 1,150 kilo tones per annum (KTA) will result in increase of RIL's aggregate capacity to 3.2 million metric tonnes per annum. The PET resin plant of RIL has two lines with a combined manufacturing capacity of 650 KTA. This is the largest installation by any company at a single location. Another major, ONGC also gained over 0.5% in today's trading session.

The pharma sector attracted a lot of investors in the second half of the trading session. The sector gained over 1% in today's trading session. Shares of Suven Life Sciences gained over 3% after the company revealed that it has completed the trial run of SUVN - G3031 on healthy human volunteers. The studies is named single ascending dose (SAD). Furthermore, the company said that it has started the next trial run which is called multiple ascending dose (MAD) studies as part of Phase 1. Additionally, shares of Sun Pharma gained over 2% during the second half of the trading session.

Auto stocks solely in red
01:30 pm

Indian markets turned positive as BSE Sensex gained over 150 points while NSE-Nifty gained over 40 points. BSE Mid Cap and BSE Small Cap stocks outperformed the markets as smallcaps gained nearly 1.5% while midcap stocks gained about 0.6%. Consumer Durables and capital goods stocks have seen the maximum investor attention. Automobile stocks, however, is the lone loser amidst this rally.

Precious metals continue to trade on a flattish note as gold prices dropped just 0.03% or Rs 9 while silver prices increased marginally by 0.01% or Rs 2. Gold price, per 10 grams, stood at Rs 26,780 levels while silver price, per kilogram, stood at Rs 36,700 levels. Crude oil prices gained during this trading session by 0.6% or Rs 19. Per barrel, crude oil is available at Rs 3,240.

Capital goods stocks have received investor attention especially after the sector bellwether Larsen & Toubro signed a Memorandum of Understanding (MoU) with a French firm. The engineering and construction major has entered into an agreement with AREVA to capitalize on localization for EPR nuclear power that will be constructed at Jaitapur, Maharashtra. Areva's EPR nuclear reactor is a third generation advanced water reactor. In addition to this, Larsen & Toubro will also receive assistance in forging capabilities for L&T special steels and heavy forgings from Areva. TRF Ltd gained the most with gained of 4.9%.

Real estate or construction sector too received investor attention today. RPP infra thumped gains over 6% after the company acquired a new order worth Rs 0.46 bn from Hindustan Prefab Ltd. The order involves construction of 2071 prefabricated toilets for government schools that is located in Andhra Pradesh. Shares of Orbit Corporation and Welspun projects also increased 4.7% and 6.6%, respectively.

Indian Markets Open Flat
09:30 am

Asian stock markets are trading with moderate gains as the European markets and the US markets bolstered gains during the end of last week's trading session. The US market's broader index, S&P 500, closed with gains of 0.5% while stock markets in Germany closed last week with gains of 1.7%. While the Japanese stock markeyts traded with minor losses of 0.13%; Chinese, Hong Kong, Taiwan and Korean markets traded with gains of 1.4%, 0.4%, 0.3% and 0.12%, respectively. Chinese economy revealed results regarding imports and exports that were below investor expectations. The imports and exports data YoY declined 12.7% and 15% against expectations of a decline of 11.7% and 12%, respectively.

Indian markets opened on a flattish tone as investors turn their focus towards inflation figures which are set to be revealed. While the BSE Sensex is trading with a loss of 5 points, NSE-Nifty is trading with a loss of 7 points. BSE Mid Cap and BSE Small Cap stocks continue to outperform the markets as midcap stocks gained 0.4% while smallcap stocks gained over 0.7%. Capital goods have gained the maximum while IT stocks have shown maximum weakness.

Precious metals traded with decent gains as gold prices increased 1% while silver prices increased 1.2%. Gold prices, per 10 grams, increased Rs 260 to Rs 26,780 levels while silver prices, per kilogram, gained Rs 430 to Rs 36,700 levels. Crude oil prices gained moderate strength by 0.2% or Rs 5. Per barrel, crude oil is available at Rs 3,220. The value of Indian Rupee against the US Dollar increased slightly by 0.04% or 0.02 and is currently available at Rs 62.34.

The banking sector has been a recipient of various reforms; subject to a bank's individual decisions. The largest bank of the country, the State Bank of India has slashed its home loan rates by 0.25% or 25 basis points. Such a move was executed after HDFC bank slashed its home loan rates by 0.2% or 20 basis points to 9.9%. The applicable rates will be implemented after 13th April. As per the revised EMI rates, EMI applicable over a loan for a period of 30 years, for a woman under HER Ghar, will come to Rs 867 and Rs 871 (for others) compared to Rs 885 and Rs 889 respectively. Shares of HDFC bank lost about 0.5% while SBI bank gained over 0.6%.

Shares of Info Edge limited 3% after the company announced that it would be investing Rs 1.55 bn in online restaurant named Zomato. The invested amount will be utilized to expand Zomato's business. Zomato recently set its foot in the US market by acquiring Urbanspoon for US$60 m in an all-cash deal. It is expanding its operations at a massive pace as it took 6 companies with 6 months under its wings.

Gold prices linked to Indian demand

Indians' love for Gold is well known. The yellow metal has been a traditional store of wealth. For generations, people in rural India in particular have parked their savings from agriculture in Gold. There was no other choice as they never had access to formal a banking system. It won't be too far off the mark to say that demand from India's farmers is a big driver of the international Gold price. However, this exposes Gold investors across the world to the risk of India's unpredictable monsoon. Rural Indian Gold demand is almost entirely dependent on a bumper harvest. As over half of India's arable land is not irrigated; Indian Gold demand is strongly correlated to the monsoons .

This year has been tough for India's farmers. Poor summer rains has severely impacted the Kharif crop. The unseasonal winter rains have added to rural India's woes. It has become clear that Gold demand will take a hit in 2015. On the back of a 14% fall in demand in 2014, demand is estimated to fall by another 15% this year. The government's efforts to discourage consumption in order to contain the current account deficit, has also impacted sentiment.

We believe this could act as a dampener on international Gold prices this year. Investment demand via ETFs is already subdued. At the same time, the prospect of the US Fed hiking interest rates later this year looms large. Speculators have long since abandoned Gold as an asset where quick profits can be made. However, this bodes well for long term investors. Low Gold prices allow serious investors an opportunity to enter at attractive levels.

Factors like monsoons and the decisions of the US Fed cannot be predicted. We believe it is a good idea to hold around 10-15% of your wealth in Gold as an insurance against difficult economic conditions. Investors would be well advised to ignore the short term noise regarding Gold prices. Instead view Gold as a long term store of value and as means to protect your wealth from the recklessness of global central banks