Benchmarks trade in fine fettle in early deals

Indian equity benchmarks have made a positive start and are trading at all time high levels in early deals on Monday on account of strong foreign inflows and budget optimism. Sentiments remained up-beat after FICCI’s Business Confidence index value climbing to a 14-quarter high of 69 in the current round, up from 60.8 in the previous survey. In other positive factor for the markets it has been reported that overseas investors have pumped in a staggering over $20 billion into the Indian market in the first half of the year, mainly on hopes of a stable and reform-oriented government at the Centre. Meanwhile, Finance Minister Arun Jaitley has said that there was no need for panic as country has enough food stocks. Also the International Monetary Fund chief Christine Lagarde has hinted at coming downward revision in world economic outlook.

On the global front, Asian stock markets got off to a slow start on Monday after a U.S. market holiday but held near three-year highs on optimism about the U.S. economy, with investors now shifting their focus to corporate earnings.

Back home, foreign portfolio investors (FPIs) bought shares worth a net Rs 943.19 crore July 4, 2014, as per provisional data from the stock exchanges. On the sectoral front, software, technology and infrastructure witnessed the maximum gain in trade, while oil and gas, banking and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices too were trading in the green, while the market breadth on the BSE was positive; there were 1307 shares on the gaining side against 747 shares on the losing side while 76 shares remain unchanged.

The BSE Sensex opened at 26039.67; around 77 point higher compared to its previous closing of 25962.06, and has touched a high and a low of 26116.73 and 26027.71 respectively. The index is currently trading at 26039.72, up by 77.66 points or 0.30%. There were 17 stocks advancing against 13 declines on the index.

The overall market breadth has made a strong start with 61.36% stocks advancing against 35.07% declines. The broader indices too were trading in the green; the BSE Mid cap and Small cap indices up by 0.26% and 0.64% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 1.75%, TECk up by 1.43%, Infrastructure up by 0.88%, Realty up by 0.61% and Consumer Durables up by 0.57%, while Oil and Gas down by 0.86%, Bankex down by 0.49%, PSU down by 0.25% and FMCG was down by 0.17% were the top losers on the sectoral index.

The top gainers on the Sensex were Tata Power up by 2.47%, TCS up by 2.05%, Infosys up by 1.90%, Dr Reddy up by 1.87% and Bharti Airtel up by 1.67%. On the flip side, ONGC was down by 1.40%, Maruti Suzuki was down by 0.84%, RIL was down by 0.71%, Axis Bank was down by 0.58% and HDFC Bank was down by 0.51% were the top losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) has relaxed overseas investment norms for Indian corporate by raising their borrowing limit. The RBI has enhanced the overseas direct investments(ODI) to 400 percent of a company's net worth from 100 percent for all companies.

The RBI’s notification has highlighted that any financial commitment (FC) exceeding $1 billion or its equivalent in a financial year would require prior approval of the Reserve Bank even when the total FC of the Indian Party is within the eligible limit under the automatic route (within 400% of the net worth as per the last audited balance sheet).

Last year, RBI had reduced the ODI limit to 100 percent due to prevailing macro-economic situation mainly rupee depreciation. Rupee had depreciated to all-time low at 68.80 against the dollar August last year owing to high capital outflows by foreign institutional investors, amid concerns over the US fed tapering programme. The RBI's restriction was not applicable on public sector firms like Oil India and ONGC Videsh.

The CNX Nifty opened at 7,780.40; about 29 points higher as compared to its previous closing of 7,751.60, and has touched a high and a low of 7,791.40 and 7,765.50 respectively. The index is currently trading at 7,773.90, up by 22.30 points or 0.29%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were IDFC up by 3.69%, Tata Power up by 2.99%, TCS up by 2.15%, Infosys up by 1.99% and Dr Reddy up by 1.93%. On the flip side, Kotak Bank down by 2.89%, BPCL down by 1.75%, ONGC down by 0.90%, Maruti Suzuki down by 0.80% and Ultratech Cement down by 0.65% were the major losers on the index.

Asian markets were trading mostly in the red; Nikkei 225 tumbled by 1.36 points or 0.01% to 15,435.77, Hang Seng declined 68.86 points or 0.29% to 23,477.50, KOSPI Index slipped by 10.28 points or 0.51% to 1,999.38, Shanghai Composite dropped 6.96 points or 0.34% to 2,052.42 and Taiwan Weighted was down by 13.26 points or 0.14% to 9,496.79.

On the flip side, Straits Times gained 2.85 points or 0.09% to 3,275.10, Jakarta Composite increased by 41.97 points or 0.86% to 4,947.79 and FTSE Bursa Malaysia KLCI was up by 6.49 points or 0.34% to 1,891.40.