Benchmarks make gap up start on firm global cues; Nifty regains 4,800 mark

After a continuous four days of consolidation, the Indian equity markets have made a gap up start triggered by a firming trend on other Asian bourses, following overnight gains on the US market driven by positive economic data. Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE’s -- Sensex -- and NSE’s -- Nifty -- to regained their crucial 16,000 and 4,800 mark respectively. Meanwhile, banking stocks rose on expectations that the Reserve Bank of India (RBI) will start cutting interest rates in the coming months to prop up slowing economy moreover; power sector too remained in jubilant mood ahead of the meeting of an empowered group of ministers (EGoM) later this month. Gas-based power projects with a generation capacity of about 4,000 Mw are ready to commence operations by March 31 and are awaiting allocation by the EGoM. The broader indices were going neck to neck with benchmarks. The market breadth on the BSE was positive; there were 784 shares on the gaining side against 166 shares on the losing side while 27 shares remained unchanged.

The BSE Sensex opened at 15,898.32; about 84 points higher compared to its previous closing of 15,814.72, and has touched a high of 16,017.06 while low remained its opening.

The index is currently trading at 16,007.11, up by 192.39 points or 1.22%. All the 30 stocks on the Sensex were on advance side.

The overall market breadth has made a strong start. The broader indices were trading in line with benchmarks; the BSE Mid cap and Small cap indices surged 1.28% and 1.26% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.71%, Bankex up by 1.65%, Auto up by 1.58%, CG up by 1.58% and Oil and Gas up by 1.46%. While, there were no losers on the index.

The top gainers on the Sensex were M&M up by 1.99%, Hindalco up by 1.87%, Sun Pharma up by 1.86%, BHEL up by 1.84% and Bharti Airtel up by 1.68%. While there were no loser on the Sensex.

Meanwhile, foreign institutional investors (FIIs) have invested nearly Rs 6,500 crore into the Indian market, including stocks and bonds, in the first week of the January 2012. According to information available with market regulator SEBI, FIIs have purchased equities and debt securities worth a gross amount of Rs 15,168 crore. On the other hand, they have sold shares and bonds worth Rs 8,674 crore in the same period, making a net investment of Rs 6,494 crore for the period.

Experts are of the view that optimistic global cues along with declining food inflation number have helped to enhance investor confidence in the market during the week. In the first week, FIIs were more bullish on the debt market, translating into a net investment of Rs 5,488 crore during the period, whereas their investment in stocks stood at Rs 1,006 crore.

The government on January 1 had announced a new scheme, under which qualified foreign investors (QFI), including overseas individuals were allowed to invest directly in Indian stock markets. This was done with the intention to widen the profile of investors and attract more foreign funds in the wake of FII money being taken-out from the markets.

Further, the move is also expected to trim down market volatility and deepen the Indian stock markets. Earlier, QFIs were permitted to invest only in mutual fund schemes. The foreign investors could earlier invest into Indian markets through opening accounts with SEBI registered FIIs or through participatory notes.

In 2011, FIIs purchased stocks and bonds worth Rs 8 lakh crore, but sold securities worth Rs 7.9 lakh crore, resulting into an investment of Rs 1,7480 crore for the year. On the other hand, investors have gathered towards the debt market and made an investment of Rs 20,293 in the year 2011, while at the same time they stayed away from equity market and pulled out Rs 2,812 crore.

The S&P CNX Nifty opened at 4,771.85; about 29 points higher compared to its previous closing of 4,742.80, and has touched a high and a low of 4,803.65 and 4,768.25 respectively.

The index is currently trading at 4,803.20, higher by 60.40 points or 1.27%. All the 50 stocks on the Nifty were on the advance side.

The top gainers of the Nifty were Axis Bank up by 3.17%, Sesa Goa up by 2.74%, RPower up by 2.47%, JP Associates up by 2.44% and BPCL up by 2.42%. While there were no loser on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was up 33.99 points or 1.53% to 2,259.88, Hang Seng was up 104.03 points or 0.55% to 18,969.75, Jakarta Composite was up 12.38 points or 0.32% to 3,901.45, Nikkei 225 was up 33.21 points or 0.40% to 8,423.56, Straits Times was up 24.99 points or 0.93% to 2,716.27, Seoul Composite was up 29.17 points or 1.60% to 1,855.66 and Taiwan Weighted was up by 77.95 points or 1.10% to 7,170.99.