Benchmarks recover from intra-day’s low; Sensex trades above 26,100 level

Recovering from day’s low, local equity markets gradually gathering steam were trading with gains of around three tenths of a percent, which kept both Sensex and Nifty above the psychologically crucial 26,100 and 7,750 levels respectively.  With investors utilizing ‘dips’ as an opportunity for buying select fundamentally strong blue chip-stocks, frontline indices witnessed recovery each time the witnessed selling pressure, nevertheless the mood continues to remain upbeat on the back of positive global set-up. However, broader indices were trading with sharper losses in the range of 0.10-%-0.65%.

On the global front, Asian markets rose Wednesday, adding to the previous day's rally, following a positive lead from Wall Street while concerns over the Ukraine air crash crisis ease. On the flip side, European stocks got off to cautious start on Wednesday, easing back from a surge in the previous session as investors remained jittery over conflicts in Ukraine and the Middle East. The rebels handed over the plane's black boxes as European countries struggled to agree on sanctions for Russia, who they accuse of supporting the separatists, sparking a rally in the rouble and other Russian assets.

Closer home, much of support was lent by stocks from Information Technology, Banking and Capital Goods counters, while those from Realty, Power and Fast Moving Consumer Goods  (FMCG) counters were the weak links of trade. Banking stocks like Bank of Baroda, Punjab National Bank, SBI and ICICI Bank soared after the Reserve Bank of India (RBI) unveiled a new framework on Tuesday for identifying and dealing with large banks in the country, termed domestic systemically important banks (D-SIB), which basically would be too big to fail and allowing its failure would cause a crisis in the financial system. The overall market breadth on BSE continued to be in the favour of declines which were outpacing advances in the ratio of 1549:1085; while 103 shares remained unchanged.

The BSE Sensex is currently trading at 26104.23, up by 78.43 points or 0.30% after trading in a range of 26059.89 and 26188.64. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.10%, while Small cap index down by 0.65%.

The gaining sectoral indices on the BSE were IT up by 1.68%, TECK up by 1.20%, Bankex up by 0.50%, Capital Goods up by 0.41%, Consumer Durables up by 0.37% while, Realty down by 0.70%, Power down by 0.47%, FMCG down by 0.31%, Oil & Gas down by 0.30%, Metal down by 0.25% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.32%, Hindalco up by 1.99%, TCS up by 1.70%, Wipro up by 1.45% and ICICI Bank up by 1.32%. On the flip side, Tata Steel down by 1.36%, Axis Bank down by 1.18%, Tata Power down by 1.01%, NTPC down by 1.00% and Sun Pharma Inds down by 0.80% were the top losers.

Meanwhile, borrowings by Indian companies from overseas markets declined by 3.1 percent to $1.89 billion in June 2014 from $1.95 billion recorded in same month of previous year. Among the companies raising money abroad during June, 55 firms borrowed $1.30 billion through automatic route and 14 raised $583.7 million from approval route.

Company wise, in approval route category, state-owned carrier Air India raised $149.5 million in two tranches for import of capital goods and SCI Forbes raised $35.25 million to refinance earlier ECB. HPCL-Mittal Pipelines raised $262.5 million in two separate tranches for refinancing of earlier ECB.

In the automatic route, Reliance Industries borrowed $238.02 million for import of capital goods and India Oil Corporation raised $650 million to refinance earlier ECB. Construction major Larsen & Toubro raised $100 million for rupee expenditure. Among others, Hero Cycles borrowed money for overseas acquisition, Lotte India Corporation for new project, Aditya Birla Nuvo for refinancing of earlier ECB and Technofab Engineering for modernization of manufacturing facilities.

An external commercial borrowing (ECB) is an instrument used in India to facilitate the access to foreign money by Indian corporations and PSUs (public sector undertakings). ECB include commercial loans in the form of bank loans, buyers’ credit, suppliers’ credit, securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares) availed of from non-resident lenders with a minimum average maturity of 3 years. ECBs cannot be used for investment in stock market or speculation in real estate.

The CNX Nifty is currently trading at 7784.85, up by 17.00 points or 0.22% after trading in a range of 7768.40 and 7809.20. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 2.91% and Infosys up by 2.38% and Hindalco up by 2.26%, TCS up by 1.77% and Wipro up by 1.53%. On the flip side, Ultratech Cement down by 2.13%, Ambuja Cement down by 2.04%, Grasim Industries down by 1.74%, Tata Steel down by 1.44% and IDFC down by 1.40% were the top losers.

Most of Asian markets were trading in positive territory; with Shanghai Composite edging higher by 1.5 points or 0.07% to 2,076.98; FTSE Bursa Malaysia KLCI inching higher by 1.66 points or 0.09% to 1,873.02; Straits Times adding 18.84 points or 0.57% to 3,335.75; Jakarta Composite gaining 25.9 points or 0.51% to 5,109.42; Taiwan Weighted rising 58.39 points or 0.62% to 9,499.36 and Hang Seng advancing by 117.44 points or 0.49% to 23,899.55. On the flip side, Nikkei 225 declining by 14.72 points or 0.1% to 15,328.56 and KOSPI Index edging lower by 0.61 points or 0.03% to 2,028.32.

European markets got off to cautious start; with Germany’s DAX rising by 22.74 points or 0.23% to 9,757.07, while UK’s FTSE 100 losing 3.87 points or 0.06% to 6,791.47 and  France’s CAC sliding by 3.14 points or 0.07% to 4,366.38