Strong global cues pull markets higher in early trade

Key domestic bourses have made a decent opening on the back of strong global cues. The US markets closed 1% higher on Friday post Congress move and positive macro data, while Asian markets were quiet to mix amid less volume due to Christmas holiday. Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE’s -- Sensex -- and NSE’s -- Nifty -- to regain their crucial 15,850 and 4,750 mark respectively. Capital goods witnessed the maximum gain in trade followed by metal and auto while, there were no losers on the BSE sectoral space. Meanwhile, telecom stocks get a sense of relief and stocks like RCom, Idea, MTNL and Bharti Airtel rose by over two percent each as the ‘New Telecom Policy’, which is likely to have no roaming charges for subscribers within the country and will allow for mobile numbers to be ported to any part of the country, is expected to be delayed till June 2012. The draft policy was released by Minister of Communications Kapil Sibal in October and was expected to be released by December earlier. The broader indices too were trading on a firm note. The market breadth on the BSE was positive; there were 999 shares on the gaining side against 447 shares on the losing side while 47 shares remained unchanged. Moreover, high volatility is expected on the bourses this week as traders roll over positions in futures & options (F&O) segment from the near-month December 2011 series to January 2012 series.

The BSE Sensex opened at 15,782.17; about 44 points higher compared to its previous closing of 15,738.70, and has touched a high and a low of 15,879.29 and 15,761.18 respectively.

The index is currently trading at 15,873.32, up by 134.62 points or 0.86%. There were 29 stocks advancing against only 1 decline on the index.

The overall market breadth has made a strong start with 66.91% stocks advancing against 29.94% declines. The broader indices too were trading firm note; the BSE Mid cap and Small cap indices rose 0.76% and 0.74% respectively.

The top gaining sectoral indices on the BSE were, CG up by 1.61%, Metal up by 1.13%, Auto up by 1.13%, Realty up by 1.09% and TECk up by 1.08%. While, there were no losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 2.95%, Hero MotoCorp up by 2.13%, BHEL up by 1.76%, L&T up by 1.72% and ICICI Bank up by 1.47%. While ONGC down by 0.11% remained the lone loser on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) governor, Duvvuri Subbarao has said that India’s economic growth will probably fail to meet the central bank's GDP target of 7.6% for the fiscal year 2011-12 citing concerns over the domestic macro-economic situation. The governor also was of the belief that RBI may revise the growth forecast for Asia’s third largest economy downward in its third quarter monetary policy review meeting scheduled on January 24, 2012.

Subbarao underscored that factors like stubborn inflation and depreciating rupee are serious cause of concerns for the economy’s growth. On one hand, the headline (WPI) inflation in the month of November stayed above the uncomfortable 9% levels for the twelfth straight month, despite thirteen interest rate hikes by Indian central bank since March 2010. While on the other, Indian rupee has become the worst performing currency in Asia depreciating over 15% in 2011 against the dollar.

The RBI had revised the GDP growth forecast for 2011-12 to 7.6%, from 8% on October, 2011 while, the government cut its full-year growth target to between 7.25 - 7.75% earlier this month from 9% in February. Meanwhile, an influential brokerage firm CLSA has slashed India’s GDP growth forecast to 6.7% for the current fiscal year ending March, 2012 from its earlier projection of 7.3%, owing to cyclical deceleration caused by high interest rates, policy inertia and the adverse impact of global headwinds.  

The S&P CNX Nifty opened at 4,718.15; about 4 points higher compared to its previous closing of 4,714.00, and has touched a high and a low of 4,756.45 and 4,718.15 respectively.

The index is currently trading at 4,755.95, higher by 41.95 points or 0.89%. There were 45 stocks advancing against just 5 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 3.01%, Hero MotoCorp up by 2.05%, RCom up by 1.86%, BHEL up by 1.82% and Siemens up by 1.79%.

On the flip side, Ranbaxy down by 1.73%, Power Grid down by 0.40%, ONGC down by 0.25%, ACC down by 0.14% and Sun Pharma down by 0.05% remained the lone loser on the index.

Most of the bourses in the Asian region were trading in the red after a decent opening; Shanghai Composite was down 6.27 points or 0.28% to 2,198.51, Seoul Composite was down 8.13 points or 0.44% to 1,859.09 and Taiwan Weighted was down by 12.85 points or 0.18% to 7,097.88.

On the flip side, Nikkei 225 was up by 94.94 points or 1.13% to 8,490.10.

However, Stock markets in Hong Kong, Indonesia, Malaysia and Singapore remained closed on Monday in observance of the Christmas holiday.