Benchmarks trade at day’s high on sustained buying activities; Nifty trades past 7900 mark

Going from strength to strength, local equity markets have escalated to day’s high point on sustained buying activities by funds and retail investors on increased risk-appetite after Fed's September meeting minutes released late on Wednesday suggested it was in no hurry to raise rates, which increased the appeal of all the emerging markets assets, including local equities. Sentiments were also buoyed after the International Monetary Fund (IMF), akin to World Bank, raised the country's growth forecast to 5.6% for 2014 from its earlier estimate of 5.4% and forecasted a higher 6.4% growth in 2015 on the back of renewed confidence in the market due to a series of economic reforms pursued by the new Government. At day’s high, both Sensex and Nifty were trading above psychologically crucial 26,500 and 7,900 levels respectively, with gains of around a percent. Meanwhile, broader indices also participating into the rally, outperforming larger counterparts were trading with gains of 1%-1.25%.

On the global front, receiving positive handover from Asian counterparts, European shares are likely to rebound sharply from the previous session's two-month lows on Thursday on expectations that the U.S. Federal Reserve will not start hiking interest rates until the economy becomes strong enough to absorb such a move.

Closer home, almost all the sectoral indices on BSE were trading into positive territory; however stocks from FMCG counter was the only exception. Nevertheless, stocks from Realty, Capital Goods and Banking counters were the prominent gainers of the session. In stock-specific activity, Shares of ITC, L&T and Axis Bank rose on buzz of stake sale by the government in these companies. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1774:755; while 96 shares remained unchanged.

The BSE Sensex is currently trading at 26501.31, up by 254.52 points or 0.97% after trading in a range of 26394.21 and 26571.66. There were 26 stocks advancing against 4 stocks declining on the index.The broader indices were trading in green; the BSE Mid cap index was up by 1.29%, while Small cap index up by 1.21%.

The gaining sectoral indices on the BSE were Realty up by 2.07%, Capital Goods up by 1.55%, Bankex up by 1.48%, Power up by 1.23% and Oil & Gas up by 1.14% while, FMCG down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 4.94%, BHEL up by 4.68%, Cipla up by 2.35%, SBI up by 2.08% and ICICI Bank up by 1.71%. On the flip side, Mahindra & Mahindra down by 1.00%, ITC down by 0.41%, NTPC down by 0.28% and Bajaj Auto down by 0.14% were the top losers.

Meanwhile, with an aim to increase the domestic urea production, the Fertilizer Ministry has notified New Urea Investment Policy for setting up and expansion of urea plants in the country. As per the New Urea Investment Policy, interested private companies are required to give a bank guarantee of Rs 300 crore for every project, while PSUs firms have been exempted from it. However, the companies will get a subsidy on production only if the urea production starts in the next 5 years. The subsidy will continue till 8 years after the commencement of production.

In India, the shortfall between demand and production of urea is around 8 million tonnes which is met through imports. The move to amend the urea policy came after as many as 13 players including IFFCO, RCF and Tata Chemicals proposed setting up of urea plants entailing capacity addition of 16 million tonnes. As earlier policy was assuring the 'guaranteed buyback’, the proposed capacity addition by the applicants was more than the actual requirement. Therefore, the ministry decided to replace guaranteed buyback clause with the Rs 300 crore bank guarantee so that only interested players approach for setting up of new urea projects.

Furthermore, the flexible lower limit and ceiling limit of urea cost has been fixed after factoring the gas price from $6.5 mmbtu to $14 mmbtu. During the implementation of this policy, the decisions on various issues will be taken by a Committee of Secretaries including from Expenditure, Petroleum, Planning Commission and Agriculture.

 The CNX Nifty is currently trading at 7916.90, up by 74.20 points or 0.95% after trading in a range of 7886.50 and 7940.70. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.84%, BHEL up by 4.63%, Zee Entertainment up by 2.92%, PNB up by 2.59% and Cipla up by 2.48%. On the flip side, Tech Mahindra down by 1.09%, Mahindra & Mahindra down by 0.93%, NMDC down by 0.93%, Jindal Steel & Power down by 0.63% and Bajaj Auto down by 0.40% were the top losers.

Asian markets were trading mostly higher; with Shanghai Composite rising by 3.22 points or 0.13% to 2,386.01; FTSE Bursa Malaysia KLCI gaining by 5.51 points or 0.3% to 1,829.83; Taiwan Weighted adding by 11.26 points or 0.13% to 8,966.44; Straits Times advancing by 22.37 points or 0.69% to 3,249.08; Jakarta Composite firming up 45.96 points or 0.93% to 5,004.48 and  Hang Seng spurting by 241.84 points or 1.04% to 23,505.17. On the flip side, Nikkei 225 down by 117.05 points or 0.75% to 15,478.93 and KOSPI Index down 7.66 points or 0.39% to 1,965.25 were the top losers.