Benchmarks continue to trade firm in late morning session

After a gap up opening, Benchmark share indices continued to trade higher and hit record highs, with the Sensex breaching the 25,000 mark and the Nifty topping 7,500 as early trends indicated the pro-reform and business friendly BJP-led NDA is set get a majority and form a stable government. Besides, appreciating rupee which soared to a fresh 10-month high of 58.88 against the US dollar also has a positive impact. On the BSE sectoral front, maximum positions were built in Bankex counter, followed by PSU and oil & gas stocks, while defensive stocks such as IT and Teck were under selling pressure as investors bet on high beta cyclicals, which have been the big outperformers this year. The rally in markets has come on the back of strong buying by overseas investors. Foreigners betting on a BJP victory have poured more than $16 billion into Indian stocks and bonds in the past six months.

On global front, Asian stocks fell, dragging the regional index from a four-month high, as bonds from Australia to Singapore followed Treasuries higher amid concern the global recovery is stalling. US markets ended lower on Thursday as investors continued to book profit at higher levels while discouraging earnings from Wal-Mart also weighed on market sentiment. Back home, broader indices too were trading higher by one percent. Moreover, Gujarat-based companies saw strong buying as BJP headed for victory in elections. Adani Enterprises was up 9%, Adani Ports traded 3.5% higher, while Adani Ports traded with 5.3% gains. The market breadth on BSE was negative, out of 2273 stocks traded, 1056 stocks advanced, while 1121 stocks declined on the BSE.

The BSE Sensex is currently trading at 24,935.93 up by 1030.33 points or 4.31% after trading in a range of 25,375.63 and 24,271.54. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 2.11%, while Small cap index was up by 1.11%.

The gaining sectoral indices on the BSE were Bankex up by 8.34%, PSU up by 5.89%, Oil & Gas up by 5.67%, Realty up by 5.07% and Metal up by 4.86%, while IT down by 2.17% and Teck down by 1.14% were losing indices on BSE.   

The top gainers on the Sensex were ICICI Bank up by 8.95%, SSLT up by 8.56%, Axis Bank up by 7.53%, HDFC Bank up by 7.33% and SBI up by 7.18%. On the flip side, Wipro down by 1.83%, Dr Reddys Lab down by 1.28%, TCS down by 0.99% and Infosys down by 0.95%.

Meanwhile, apprehensive over next government’s intent of tweaking FDI policy especially in retail, Commerce and Industry Minister Anand Sharma has prepared a 'handover note' advising his successor for retaining a liberal economic outlook and viewing FDI as a source of not only ‘precious foreign exchange’ but also that of technology, investment and jobs. The minister’s concerns about the FDI policy regime is derived from the fact of BJP’s reiteration of revisiting the foreign investment in the multi-brand retail sector, if it forms the government, which now is looking not far away from reality.

The letter, which will be handed over to the next Commerce and Industry Minister, emphasizes the need of market diversification, the crucial role played by India in the World Trade Organization (WTO) and the need to engage with East Asian and Asia Pacific countries. It also urges on normalization of economic relations with Pakistan for greater peace and prosperity of the region.

Further, the Minister also batted for careful negotiations in the proposed Regional Comprehensive Economic Partnership which will form the biggest trading bloc in the world. It includes the 10 countries of Asian, India, Japan, Korea, China, Australia and New Zealand.

Additionally, the draft letter also highlighted the need of reassurance on the stability and predictability of foreign investment regime in India for the overseas investors, which would not only be in India’s national interest but so far has been a healthy tradition of country’s democracy.

The CNX Nifty is currently trading at 7,432.95 up by 309.80 points or 4.35% after trading in a range of 7,563.50 and 7,264.40. There were 44 stocks advancing against 6 declining on the index.

The top gainers of the Nifty were SSLT up by 9.84%, ICICI Bank up by 9.60%, PNB up by 9.26%, Kotak Bank up by 9.12% and Grasim up by 9.10%. On the flip side, Infosys down by 2.75%, Tech Mahindra down by 2.36%, HCL Tech down by 2.02%, TCS down by 1.61% and Wipro down by 1.29% were the top losers on the index.

Most of Asian equity indices were trading in red; Shanghai Composite declined 0.31%, Hang Seng slipped by 0.68%, KLSE Composite dropped by 0.04%, Nikkei 225 tumbled by 1.76%, Straits Times contracted 0.28% and Seoul Composite decreased by 0.15%. On the flip side, Jakarta Composite was up by 0.39% and Taiwan Weighted was up by 0.08%.