Benchmarks make gap-up opening on jubilant global cues

Buoyed by jubilant global cues, Indian equity benchmarks have made a gap up opening and are trading with a gain of over half a percent in early deals on Monday. Sentiments remained up-beat as traders across the globe are expecting the situation in Ukraine and Middle East to stabilize. The US markets had made a smart bounce back on Friday on optimism that situation in Ukraine will ease following comments from Nikolai Patrushev, Secretary of the Russian Security Council. The Asian markets too were trading in the green terrain at this point of time led by the Japanese market after a report that the nation’s pension fund freed itself to buy more domestic equities.

Back home, sentiments remained jubilant after Confederation of Indian Industry (CII) saying that green shoots have started to appear in the manufacturing sector, with a majority of segments likely to post higher output. Meanwhile, shares of real estate companies remained on buyers’ radar after the Securities and Exchange Board of India (Sebi) approved the setting up and listing of Real Estate and Infrastructure Investment Trusts, commonly referred to as REITs.

On the sectoral front, realty, auto and capital goods witnessed the maximum gain in trade, while fast moving consumer goods 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 1384 shares on the gaining side against 484 shares on the losing side while 55 shares remain unchanged.

The BSE Sensex opened at 25476.87; around 147 point higher compared to its previous closing of 25329.14, and has touched a high and a low of 25550.72 and 25465.59 respectively. The index is currently trading at 25491.87, up by 162.73 points or 0.64%. There were 24 stocks advancing against 6 declines on the index.

The overall market breadth has made a positive start with 71.97% stocks advancing against 25.17% declines. The broader indices too were trading in the green; the BSE Mid cap index was up 0.98%, while Small cap index was up by 1.17%. 

The top gaining sectoral indices on the BSE were Realty up by 2.67%, Auto up by 1.60%, Capital Goods up by 1.21%, Infrastructure up by 1.09% and Metal up by 0.99%, while FMCG was down by 0.05% were the lone loser on the sectoral index.

The top gainers on the Sensex were M&M up by 3.65%, Tata Motors up by 2.37%, Hindalco up by 1.77%, Infosys up by 1.37% and L&T up by 1.34%. On the flip side, Dr Reddys was down by 0.74%, HUL was down by 0.38%, Bajaj Auto was down by 0.27%, Wipro was down by 0.15% and ITC was down by 0.13% were the top losers on the Sensex.

Meanwhile, a day after approving the long-delayed proposal for raising the foreign direct investment limit (FDI) in railway sector, the government stated that foreign investment in railways will help in strengthening infrastructure without affecting security.

Commerce and Industry Minister Nirmala Sitharaman asserted that the government had taken the decision to ease the FDI policy in those areas of railways which will not  affect security and sovereign authority of the sector. Further, the Minister added that all security-related concerns raised by the Home Ministry have been taken care of by the policy draft and essential operations being kept within the railways. Home Ministry had raised concerns over foreign investments in rail infrastructure in border areas, particularly from China. India and China are likely to sign a memorandum of understanding (MoU) for cooperation in Railways during the forthcoming visit of Chinese President Xi Jinping in September 2014. China had already sent an advance team for cooperation in the construction and overhaul of the existing railway system across India.

Railways is an important sector for India and has the potential to raise India's economic growth by over one percent. The government has approved the proposal for raising 100 percent FDI in railway infrastructure. Foreign investors can now invest in setting up of high-speed corridors, suburban rail networks, signaling projects, logistic hubs and in creating links to industrial parks. The move is likely to help in modernisation and expansion of the Railways which is facing a cash-crunch of around Rs 29,000 crore. Currently, there is a complete restriction on any kind of FDI in the Railways sector except mass rapid transport systems.

The CNX Nifty opened at 7,619.85; about 51 point higher as compared to its previous closing of 7,568.55, and has touched a high and a low of 7,633.55 and 7,603.30 respectively. The index is currently trading at 7,615.25, up by 46.70 points or 0.62%. There were 39 stocks advancing against 11 declines on the index.

The top gainers of the Nifty were M&M up by 3.57%, DLF up by 3.45%, IDFC up by 2.80%, Tata Motors up by 2.29% and BPCL up by 2.29%. On the flip side, HCL Tech down by 1.41%, Dr Reddys down by 0.89%, MCDOWELL-N down by 0.84%, Tech Mahindra down by 0.47% and Bajaj Auto down by 0.46% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 soared 311.23 points or 2.11% to 15,089.60, Hang Seng increased by 288.67 points or 1.19% to 24,620.08, KOSPI Index gained 15.29 points or 0.75% to 2,046.39, Straits Times spurted by 23.18 points or 0.70% to 3,312.07, Jakarta Composite rose 40.92 points or 0.81% to 5,094.68, Shanghai Composite improved 23.57 points or 1.07% to 2,218.00, FTSE Bursa Malaysia KLCI surged by 6.03 points or 0.33% to 1,845.90 and Taiwan Weighted was up by 80.68 points or 0.89% to 9,166.64.68 points or 0.89% to 9,166.64.