Markets trade with strength; Realty stocks lead

Going from strength to strength, local equity markets adding more ground were trading near day’s high point on the back of sustained buying activities by both funds and retail investors after news suggested that Russia was ending military drills near the Ukrainian border and signs of truce in Gaza, allaying geopolitical concerns, sharpened risk appetite for emerging markets’ assets, including equities and currencies. Sentiment was further bolstered with reports suggested of crop plant gathering pace after clouds of doubt over monsoon deficit were slowly blowing away. Trading at day’s high, both Sensex and Nifty were trading above the psychologically crucial 25, 500 and 7,600 levels respectively with gains of around 3/ 4 of a percent. Meanwhile, broader indices also accumulating gains in line with frontline indices, were up in the range of 0.75%-1.10%.

Further, positive start of European counters added to positive milieu. Globally, European shares rose in early trade on Monday, bouncing back from a sharp two-week slide and tracking a rally on Wall Street as tensions between Ukraine and Russia eased slightly. Late on Friday, Russia's Defence Ministry said it had ended military exercises in southern Russia which the United States had criticized as a 'provocative' step amid the Ukraine crisis, sparking a sharp rally on Wall Street.

Closer home, stocks from Auto, Realty and Capital Goods counters were the major pillars of markets’ strength, while Power, Fast Moving Consumer Goods and Infrastructure counters were the major pockets of weakness. Realty stocks were buzzing in trade after market regulator gives final approval to establishment of REITs, in a move which will help the sector in reducing the high levels of debt in the sector. Meanwhile, gains of Auto counter were led by Mahindra & Mahindra stocks that rallied 3% after April-June earnings beat estimates. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1631:990; while 99 shares remained unchanged.

The BSE Sensex is currently trading at 25518.37, up by 189.23 points or 0.75% after trading in a range of 25456.75 and 25550.72. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.77%, while Small cap index up by 1.11%.

The gaining sectoral indices on the BSE were Auto up by 2.05%, Realty up by 1.82%, Capital Goods up by 1.21%, INFRA up by 0.74%, Bankex up by 0.74% while, Power down by 0.26% and FMCG down by 0.14% were the only losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.36%, Tata Motors up by 2.31%, Infosys up by 1.94%, HDFC up by 1.85% and Larsen & Toubro up by 1.61%. On the flip side, Dr. Reddys Lab down by 1.86%, NTPC down by 1.27%, GAIL India down by 1.19%, Tata Power down by 0.98% and Hindustan Unilever down by 0.59% were the top losers.

Meanwhile, in a move that would offer new way of funding for country’s cash strapped property developers, market watchdog- Securities and Exchange Board of India (SEBI) has approved setting up of real estate investment trusts (REITs), which are nothing but listed entities that mainly invest in income-producing real estate assets, the earnings of which are mostly distributed to their shareholders.

However, SEBI allowed this with certain riders, with the first being, REITs should have an asset pool of at-least Rs 500 crore and secondly, having an initial issue of at-least Rs 250 crore for shareholders. Additionally, it allowed these entities to only invest in commercial properties.

Besides, the market regulator also allowed infrastructure investment trusts -- A REIT-like structure that would allow developers to monetize their infrastructure assets through a stock exchange listing.

Sooner than later, REIT finally saw the light of the day, as the trust originally was supposed to get an approval from SEBI, back in October, but the plan was delayed amid uncertainty about the taxation structure for the new instrument. However, Finance Minister Arun Jaitley, In his budget address last month, paved the way for REITs and infrastructure trusts by announcing tax benefits for both.

In a related development, SEBI underscored that it would simplify registration procedure for stock brokers and clearing members, allowing them to obtain a unified registration for doing business in all the stock exchanges and depositories in the country.  

The CNX Nifty is currently trading at 7621.10, up by 52.55 points or 0.69% after trading in a range of 7599.75 and 7633.55. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 5.39% and DLF up by 3.12% and IDFC up by 2.60% and Ultratech Cement up by 2.54% and Tata Motors up by 2.31%. On the flip side, Dr. Reddys Lab down by 1.99%, HCL Tech. down by 1.72%, NTPC down by 1.34%, Power Grid Corpn. down by 1.33% and United Spirits down by 0.93% were the top losers.

Asian markets were trading into positive territory; with FTSE Bursa Malaysia KLCI adding 6.33 points or 0.34% to 1,846.20; KOSPI Index rising by 8.27 points or 0.41% to 2,039.37; Straits Times gaining 24.58 points or 0.75% to 3,313.47; Shanghai Composite advancing by 29.58 points or 1.35% to 2,224.00; Jakarta Composite rallying by 40.42 points or 0.8% to 5,094.18; Taiwan Weighted surging by 86.95 points or 0.96% to 9,172.91; Hang Seng spurting by 294.63 points or 1.21% to 24,626.04 and Nikkei 225 puffing up gains of 352.15 points or 2.38% to 15,130.52.

European markets were trading into positive territory; with France’s CAC rising by 22.24 points or 0.54% to 4,170.05; UK’s FTSE 100 gaining by 39.19 points or 0.6% to 6,606.55 and  Germany’s DAX adding 98.87 points or 1.1% to 9,108.19