Benchmarks magnify gains; Nifty above 7950 mark

Extending their early gains, Indian equity markets continued to trade with vigor on sustained foreign fund inflows and buying by retail investors after Finance Minister Arun Jaitley underscored that there would be huge opportunities for the corporate sector to invest once the country reached the take-off stage of economic advancement. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 302 crore on August 22, 2014.  At present, benchmark equity indices have eked out modest profit of close to two tenths of a percent and trading past the crucial 26,550 (Sensex) and 7,950 (Nifty) levels respectively. Apart from blue chips, broader indices too equally participated in the gain with both mid cap and small cap indices were trading up by over 0.35%. On BSE Sectoral front, stocks from information technology (IT), Auto and Bankex counters were supporting the markets’ uptrend, while those from Metal, Realty and Infrastructure counters were adding to the underlying cautious undertone. 

In scrip specific development, shares of Ranbaxy Laboratories have gained on reports that UBS has maintained buy rating on the stock with a target price of Rs 784 per share. On the flip side, shares of Jet Airways have dipped as much as 5% on reports that the credit rating agency ICRA has downgraded the company’s loan ratings from ‘BB’ to ‘D’.

On global front, Asian stocks swung between gains and losses as investors weighed comments from central bank leaders for clues to monetary policy ahead of conflict negotiations between Russia and Ukraine. Back home, the rupee fell marginally by five paise against the US dollar in early trade due to increased demand for the US currency from importers. The market breadth on BSE was positive, out of 2322 stocks traded, 1389 stocks advanced, while 832 stocks declined on the BSE.  

The BSE Sensex is currently trading at 26583.89 up by 164.34 points or 0.62% after trading in a range of 26586.52 and 26490.31. There were 21 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index gained 0.55%.

The gaining sectoral indices on the BSE were IT up by 0.71%, Auto up by 0.70%, Bankex up by 0.62%, Teck up by 0.59% and Healthcare was up by 0.57%, while Metal down by 0.75%, Realty down by 0.45% and Infrastructure was down by 0.19% were the few losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.86%, TCS up by 1.64%, Maruti Suzuki up by 1.63%, SBI up by 1.54% and HDFC was up by 1.47%. On the flip side, Hindalco down by 1.18%, GAIL down by 1.04%, Tata Steel down by 0.72%, SSLT India down by 0.69% and Tata Power was down by 0.68% were the top losers.

Meanwhile, Emphasizing the need for the greater corporate governance, Finance Minister Arun Jaitley has asserted that Indian corporates need to learn and adopt international best practices to improve their governance standards and to utilise opportunities that beckon India`s economy. Finance Minister’s comments come at a time when concerns have been raised about the governance standards in India’s public-sector banks.

Finance Minister further stressed that if India could do well with mediocre level governance, the country would reach greater heights with the implementation of high quality of governance. The situation of Indian economy is improving and Indian corporates should have to make immense investments to capture growing opportunities.

Finance Minister further emphasized that quality of governance determines company's credibility and said that companies deal with investors' money and investors have a right to know each affair of the company. Therefore, there should be complete transparency and accuracy for maintenance of financial records and harsh law for wrongdoers. Jaitley also added that the government will consider the corporate sector’s request to make the necessary changes in the Companies Act, 2013.

The CNX Nifty is currently trading at 7,952.65 up by 39.45 points or 0.50% after trading in a range of 7,957.70 and 7,927.75. There were 31 stocks advancing against 19 declining on the index.

The top gainers on Nifty were BHEL up by 3.30%, Indusind Bank up by 1.77%, Maruti Suzuki up by 1.59%, TCS up by 1.51% and SBI was up by 1.49%. On the flip side, Jindal Steel & Power down by 2.14%, GAIL down by 1.32%, Hindalco down by 1.26%, United Spirits down by 1.25% and Power Grid  was down by 1.04% were the top losers.

Asian markets were mixed; Nikkei 225 surged by 0.52%, KOSPI Index rose by 0.10%, Taiwan Weighted up by 0.08% and Straits Times was up 0.45%. On the flip side, Shanghai Composite tumbled by 0.85%, FTSE Bursa Malaysia KLCI declined by 0.55%, Hang Seng down by 0.19% and Jakarta Composite was down by 0.28%