Indian equities gain strength to trade above neutral line

Indian equities gain strength to trade in green above neutral line in the late afternoon session as the frontline indices are showing signs of vigor with investors accumulating blue chip counters. Traders were seen piling up positions in Consumer Durables, Oil & Gas and Auto sector while selling was witnessed in Capital Goods, TECk and IT sector. Going forward, the market will take cues from government policy action and budget expectation. Industry heavyweight Reliance Industries (RIL) was trading firm in green with gain of around more than one percent on reports that RIL and France's Dassault Aviation have signed a pact for partnering in the defence and homeland security sector in Asia's third-largest economy. Also, Gail India and ONGC from Oil & Gas sector were seen trading in green giving the much needed support. Hero MotoCorp, M&M and Bajaj Auto from Auto pack were seen trading in green driving the markets higher. On the earnings front, Tata Power along with Suzlon Energy got pounded heavily after announcing third quarter results, which were below street’s expectations. Banking heavyweight SBI is trading in red while Coal India is trading in green ahead of announcing their third quarter earnings later in the session. On the global front, all Asian markets were trading in green barring Shanghai Composite while the European markets were too trading in green on an optimistic note. The Euro-zone’s debt crisis waned after Greek parliament voted to approve a package of harsh austerity measures to secure a second EU/IMF bailout and avoid bankruptcy. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,350 and 17,700 levels respectively. The market breadth on BSE was in favor of advances in the ratio of 1392:1346 while 94 scrips remained unchanged.

The BSE Sensex is currently trading at 17,778.78 up by 30.09 points or 0.17% after trading as high as 17,807.61 and as low as 17,665.89. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading in green; the BSE Mid cap index advanced 0.49% while Small cap rose 0.29%.

On the BSE sectoral space, Consumer Durables up 0.85%, Oil & Gas up 0.71%, Auto up 0.63%, Healthcare up 0.59% and Bankex up 0.36% were the top gainers while Capital Goods down 0.73%, TECk down 0.39%, IT down 0.36% and Power down 0.02% were the major losers in the space.

Sun Pharma up 2.72%, Hero MotoCorp up 2.00%, M&M up 1.70%, Coal India up 1.66%, and Hindalco Industries up 1.24% were the major gainers on the Sensex, while Tata Power down 3.16%, Wipro down 2.37%, Cipla down 2.08%, SBI down 1.68% and Maruti Suzuki down 1.62% were the top losers in the index.

Meanwhile, India is optimistic that Pakistan will take steps to move towards a trade regime that deepens and diversifies bilateral trade between the two countries and enhances economic engagement. The Indian Commerce Minister Anand Sharma is currently on a visit to Pakistan amidst high expectations that the neighbouring nation will announce the first major step to normalise trade with India and eventually grant the much-awaited Most Favoured Nation (MFN) status to India (by the year-end).

Currently, India operates a positive list (PL) with Pakistan and permits imports from Pakistan of all, but a few items in the Indian Negative List (NL). Pakistan, on the other hand, allows only 1,946 items of imports from India which are on its PL. It is expected that Pakistan will shift its trade regime from the PL to NL, thus allowing multi-fold increase in access to Indian goods in the Pakistani market, and later dismantle that negative list and grant the MFN status to India. Under the MFN status, all partners have equal rights.  

The other areas on which progress is anticipated is the agreement for a multiple entry visa regime to facilitate the movement of business leaders of India and Pakistan, strengthening of infrastructure for cargo movement on the land route and customs cooperation and mutual conformity of standards and grievance redressal.

The investment policy regime of India which currently prohibits Pakistan investments into India is also likely to come up for discussion. This is the first substantive visit of an Indian Commerce Minister to Pakistan after India’s independence. Sharma is being accompanied by over 100 Chief Executives from India.

The S&P CNX Nifty is currently trading at 5,386.10, up by 4.50 points or 0.08% after trading as high as 5,392.95 and as low as 5,351.40. There were 27 stocks advancing against 22 declines while 1 stock remained unchanged on the index.

The top gainers on the Nifty were Reliance Infrastructure up 3.39%, Power Grid up 3.20%, Sun Pharma up 2.73%, Kotak Bank up 2.48% and Hero MotoCorp up 2.11%.

Tata Power down 2.93%, Wipro down 2.59%, Cipla down 2.47%, Ambuja Cement down 1.95% and L&T down 1.63% were the major losers on the index.

In the Asian space, Hang Seng rose 0.50%, Jakarta Composite climbed 0.96%, Nikkei 225 advanced 0.58%, Straits Times added 0.27%, Seoul Composite gained 0.60% and Taiwan Weighted amassed 0.64%. On the flipside only, Shanghai Composite eased 0.01%. 

The European markets were trading in green with, France’s CAC 40 ascended 1.06%, Germany’s DAX jumped 0.94% and Britain’s FTSE 100 added 0.94%.