Markets trade at intraday high on across the board buying

Markets keeping their spirit high were trading near the intraday peak in early noon session, with new F&O series making a positive start and Sensex once again reclaiming the 28000 level and Nifty 8500 crucial psychological mark. There was across the board buying, supporting the markets to extend their last session’s rally. Traders were rejoicing the governments’ notification of composite cap in the FDI policy, allowing up to 49 per cent foreign portfolio investment (FPI) through the automatic route in most sectors, and apart from pharma and insurance the stocks related to the retail business were moving higher, as it was clarified that foreign investors in multi-brand retail can bring in investments in the form of FPI up to 49 per cent without government approval. Future Retail was up by over 5%, while Shopper's stop has gained over 2%. Firming trend at other Asian markets too influenced trading sentiments, as most of the regional peers barring Shanghai and Straits Times were trading in green. On the domestic front, all the sectoral indices were maintaining their gains, led by healthcare, realty, auto, metal and FMCG.

The BSE Sensex is currently trading at 28031.76, up by 326.41 points or 1.18% after trading in a range of 27814.51 and 28036.75. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were going neck-in-neck to the benchmarks; the BSE Mid cap index surged by 1.34%, while Small cap index gained 0.93%.

The top gaining sectoral indices on the BSE were Realty up by 1.90%, Auto up by 1.81%, Metal up by 1.69%, FMCG up by 1.36%, Bankex up by 1.10%

The top gainers on the Sensex were Mahindra & Mahindra up by 3.83%, Dr. Reddys Lab up by 3.36%, Hero MotoCorp up by 3.35%, Lupin up by 3.30% and SBI up by 2.69%. On the flip side, Reliance Industries down by 0.17% and BHEL down by 0.14% were the top losers.

Meanwhile, the government in its effort to simplify FDI norms, has notified the changes in the foreign direct investment (FDI) policy under which there will be a composite cap on overseas investment in various sectors, except in banking and defence segments. The move simplifies procedures and leaves room for further investments by overseas entities. Government in its release has said that portfolio investment up to 49 percent, subject to the sectoral ceiling, will not need government approval, if they do not result in transfer of ownership or control from Indian citizens to non-Indian entities.

The press note further stated that there will not be any sub-limits of portfolio investment and other kinds of foreign investments in commodity exchanges, credit information companies, infrastructure companies in securities market and power exchanges. However, in private sector banking, it said, there will a sub-limit of 49 per cent on portfolio investment within the overall foreign investment limit of 74 per cent.

Government has reasoned that the decision to keep defence and banking sectors out of the purview of composite foreign investment caps was to avoid “fly-by-night operators” and “quick money” entering these sensitive sectors. At present, in the defence sector, foreign investment limit of 49 per cent is allowed under the automatic route. Similarly, in private sector banking, the FPI limit is 49 per cent.

The Cabinet had earlier this month approved introduction of concept of composite caps. At present, 100 percent foreign investment under government approval route is permitted in these sectors, except insurance and pension, where the cap is 49 percent. However in case of FDI, a foreign investor is required to obtain government approval above 26 percent, though there is no such restriction on portfolio investments.

The CNX Nifty is currently trading at 8509.95, up by 88.15 points or 1.05% after trading in a range of 8448.00 and 8512.55. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 4.00%, Hero MotoCorp up by 3.70%, Lupin up by 3.29%, Dr. Reddys Lab up by 3.27% and Yes Bank up by 3.19%. On the flip side, Kotak Mahindra Bank down by 3.33%, BPCL down by 1.12%, NMDC down by 0.83%, Power Grid Corpn down by 0.60% and PNB down by 0.46% were the top losers.

Asian markets were trading mostly in green, KOSPI Index gained 11.13 points or 0.55% to 2,030.16, FTSE Bursa Malaysia KLCI was higher by12.99 points or 0.76% to 1,712.91, Taiwan Weighted gained 13.85 points or 0.16% to 8,665.34, Nikkei 225 was up by 62.41 points or 0.3% to 20,585.24, Jakarta Composite added 62.6 points or 1.33% to 4,775.09 and Hang Seng was up by 67.61 points or 0.28% to 24,565.59.

On the other hand, Straits Times lost 49.9 points or 1.54% to 3,199.62 and Shanghai Composite declined by 36.56 points or 0.99% to 3,669.21.