Markets soar to day’s high on sustained buying activities; Nifty reclaims crucial 7900 mark

Going from strength to strength, local equity markets were trading near day’s high point on sustained buying activities by funds and retail investors amid after RBI’s annual report has affirmed that Indian economy emerging from recession amidst signs of improvement in mining and manufacturing activity, reversal in the corporate investment cycle, improved external demand, stabilizing global commodity and marked improvement in macroeconomic pointers like fiscal deficit and inflation.

Besides, statements from Finance Secretary, Arvind Mayaram, of linking diesel prices to markets and government soon doing away with diesel subsidy, were also buoying sentiment of Indian equity markets for yet another session. At day’s high, both Sensex and Nifty were trading above mentally crucial 26,450 and 7,900 levels respectively, with gains of around half a percent. Meanwhile, broader indices also enticing gains in line with broader indices were trading up around four tenths of a percent.

On the global front, Asian pacific shares hovered near six and half yearpeak on Friday after upbeat U.S. economic data sparked another record close on Wall Street, however investors were bit cautious ahead of a speech by Federal Reserve Chair Janet Yellen later in the day at the annual gathering of central bankers in Jackson Hole, Wyoming, which will be studied for any fresh signals about the timing of U.S. interest rate increases.

Closer home, majority of the sectoral indices on BSE were holding into positive territory, nevertheless prominent gainers were stocks from banking, Information Technology and Capital Goods counters. Besides, sugar stocks ralled after govt upped import duty to 25% from 15% earlier. On the flip side, stocks from Fast Moving Consumer Goods, Healthcare and Power counters were the top losers. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1033:841; while 31 shares remained unchanged.

The BSE Sensex is currently trading at 26473.67, up by 113.56 points or 0.43% after trading in a range of 26419.53 and 26508.27. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index up by 0.19%.

The gaining sectoral indices on the BSE were Bankex up by 1.21%, IT up by 1.02%, Capital Goods up by 0.71%, TECK up by 0.68% and Metal up by 0.67% while, Realty down by 0.81%, FMCG down by 0.42%, Power down by 0.25% and INFRA down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 3.43%, SBI up by 2.70%, Tata Motors up by 1.35%, Larsen & Toubro up by 1.23% and Axis Bank up by 1.20%. On the flip side, HDFC down by 1.45%, Coal India down by 1.11%, Dr. Reddys Lab down by 1.04%, Bharti Airtel down by 0.77% and Sun Pharma Inds. down by 0.74% were the top losers.

Meanwhile, Foreign direct investment (FDI) in India increased by 34 percent to $1.92 billion in the month of June 2014 as compared to $1.44 billion in the same month of previous year. During the first quarter of FY15, FDI jumped by 34 percent to $7.23 billion from $5.39 billion recorded in the corresponding period of the previous fiscal.  

The sectors that received highest inflows during April-June in this fiscal include telecommunications ($2 billion), services ($738 million), pharmaceuticals ($680 million) and construction ($ 281 million). Country wise, maximum FDI during the reported period was received form Mauritius at $2.61 billion, followed by Singapore ($ 1.18 billion), the UK ($567 million), Japan ($695 million) and the US ($249 million).

FDI is considered crucial for India, which requires around $1 trillion in the 12th five year plan (2012-2017) to overhaul its infrastructure sector such as ports, airports and highways to boost growth. Meanwhile, in order to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. The government has relaxed FDI norms in around 12 sectors which include telecom, tea, pension and petroleum and natural gas among others. Recently, the government has raised the foreign investment limit to 49 percent in defence manufacturing and also relaxed the policy in railway and construction sector.  During FY14, FDI inflows in India rose by 8% to $24.29 billion as against $22.42 billion in FY13.

The CNX Nifty is currently trading at 7921.15, up by 30.05 points or 0.38% after trading in a range of 7903.60 and 7929.05. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.43%, PNB up by 2.90%, SBI up by 2.77%, Bank Of Baroda up by 2.57% and Tech Mahindra up by 2.15%. On the flip side, United Spirits down by 3.06%, Power Grid Corpn. down by 1.80%, HDFC down by 1.35%, Dr. Reddys Lab down by 1.14% and Sun Pharma Inds. down by 1.05% were the top losers.

Asian markets were trading mostly higher; with Shanghai Composite gained by 5.75 points or 0.26% to 2,236.20; Straits Times added 8.9 points or 0.27% to 3,332.99; KOSPI Index rose by 12.49 points or 0.61% to 2,056.70; Hang Seng advanced by 77.95 points or 0.31% to 25,072.05; Taiwan Weighted spurted by 126.72 points or 1.37% to 9,380.10. On the flip side, Nikkei 225 down by 47.01 points or 0.3% to 15,539.19; Jakarta Composite slid by 18.49 points or 0.36% to 5,187.65 and  FTSE Bursa Malaysia KLCI inched lower by 0.25 points or 0.01% to 1,874.56.