Nifty eyes 8000 on expiry day, Sensex strong; Cap Goods up 6%

Moneycontrol Bureau10:59 am Market Update: Equity benchmarks sustained gains in morning with the Sensex rising 165.31 points to 26046.48 and the Nifty climbing 43.85 points to 7978.75.About 1215 shares advanced against 798 declining shares on BSE.10:45 am Earnings estimates: State-run electric utilities company Power Grid Corporation of India's fourth quarter profit is expected to jump 24 percent to Rs 1,752 crore and revenue may increase 24.5 percent to Rs 5,854 crore compared to year-ago period, according to analysts polled by CNBC-TV18.

Operating profit is seen rising 26 percent to Rs 5,111 crore and margin may expand 100 basis points to 87.3 percent against corresponding period of last fiscal.

Analysts expect strong earnings momentum to continue as they capitalisation of transmission projects worth Rs 3,500 crore, down 30 percent (one of the lowest in four years).

They estimates capex of Rs 6,500 crore in the quarter, driving full year capex to Rs 22,500 crore as against Rs 22,400 crore in FY15.

10:30 am Citi on Fed rate: Markus Rosgen of Citi said the last two instances of Fed rate hike fears fuelled more risk-on than risk-off trades in equity markets. Value and EPS revisions have outperformed the more defensive quality and low-risk strategies, he adds.Given the valuation differential, positioning and EPS growth sensitivities, he expects the trend to continue. Prior periods of tightening have entailed EPS growth not EPS declines, so investors need not fear the Fed, Rosgen said.10:20 am UN on India's GDP: India could lose USD 49 billion in GDP if global food prices double in future, according to a new UN report which said the world will likely suffer from more volatile food prices due to rising populations.

The UN Environment Programme-Global Footprint Network report, entitled 'ERISC Phase II: How food prices link environmental constraints to sovereign credit risk', features countries according to how badly they will be affected if global food commodity prices double.

The report said if global food prices double then China could lose USD 161 billion in GDP and India could lose USD 49 billion.

"In the future, the world will likely suffer from higher and more volatile food prices as a result of a growing imbalance between the supply and demand of food. Rising populations and incomes will intensify the demand for food while climate change and resource scarcity will disrupt food production," it said.Also read - ONGC Q4 earnings likely to be weak due to low realisations10:00 am Market Check

The market continues to rise on May Futures & Options expiry day with support from infra, auto and bank stocks. The Sensex is up 166.04 points or 0.6 percent at 26047.21, and the Nifty up 42.55 points or 0.5 percent at 7977.45. About 1054 shares have advanced, 633 shares declined, and 84 shares are unchanged.

L&T is still up 10 percent while BHEL, ONGC and Bajaj Auto are other gainers in the Sensex. NTPC, Sun Pharma, SBI, Wipro and Cipla are losers in the Sensex. Capital Goods index is up 6 percent.

Currencies across the globe seem to be largely guided by actions of the US Federal Reserve, with rupee witnessing only moderate volatility, says a report by Care Ratings.

According to the credit rating agency, the single most important factor that is affecting the course of currencies is the Fed action or inaction related to interest rates.

The Indian rupee has witnessed a moderate volatility so far this year and its movement towards Rs 68-69 during the year looks likely, it said. The volatility (on annualised monthly basis) has been really high for some of the currencies such as those of Argentina, Russia, South Africa, Brazil, Australia and Mexico.