Markets continue to trade in high spirit

Indian equity benchmarks were trading near intraday high level, with Nifty and Sensex moving above their crucial 7800 and 25600 level in the early noon session, supported by widening of positions by participants, tracking extended gains in other Asian markets and overnight rally in the US, coupled with better than expected euro zone Q2 GDP data and hope for further market stimulus on Chinese markets. Back home, appreciation in rupee too supported sentiment. The rupee advanced by 35 paise to 66.31 against the dollar at the Interbank Foreign Exchange in noon trade on sustained selling of the US currency by banks and exporters.

In scrip specific development, shares of IT majors Tata Consulting Services (TCS) and Infosys were trading higher on reports that the US has cleared the domestic IT exporters of visa violation charges, following a probe into an outsourcing contract involving utility firm Southern California Edison.

The BSE Sensex is currently trading at 25661.98, up by 344.11 points or 1.36% after trading in a range of 25553.61 and 25753.93. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.75%, while Small cap index surged by 1.78%.

The top gaining sectoral indices on the BSE were Realty up by 3.39%, Metal up by 2.23%, Consumer Durables up by 2.16%, Auto up by 2.11%, IT up by 2.08%, while there were no losers on the sectoral index.

The top gainers on the Sensex were Vedanta up by 6.90%, Hindalco up by 4.40%, Tata Steel up by 3.43%, Infosys up by 3.40% and NTPC up by 2.79%. On the flip side, GAIL India down by 0.86% and Hindustan Unilever down by 0.56% were the top losers.

Meanwhile, chief economic advisor Arvind Subramanian has said that Indian economy will grow at the highest rate and also remain an attractive investment destination, amid the global financial turmoil. He further stated “Whatever projections you are seeing, as a highest growing country among all the major economies, India will remain a relatively attractive investment destination”.

Outlining the opportunities before India, Subramanian said the country has a lot of untapped potential in many areas including infrastructure. In order to make investment more attractive in this sector, the cost of building infrastructure needs to go down and said that various global companies like Siemens and Foxconn are looking to invest in India.  Further, talking about the problems in China, he said that the slowdown will have less impact on India as the country’s export to China as share of GDP is much less, though some sectors like steel may face challenges as it has excess capacity. Subramanian also stated the impact of declining oil prices will help India to maintain macro-economic stability because oil is a key determinant of inflation, fiscal deficit and current account deficit.

Subramanian further highlighted that in a sense some of these investments are also being used as a hedge against China's slowdown. So for all these reasons India will remain an attractive investment destination and added that the despite global financial turmoil, the challenges are potential opportunity for India going forward. Besides, he asserted that the Prime Minister has clarified that 'this is not a matter of one country taking advantage of another country's performance deteriorating, it is a matter of seeing challenges as opportunity that arise'.

The CNX Nifty is currently trading at 7803.35, up by 115.10 points or 1.50% after trading in a range of 7764.55 and 7821.90. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 6.90%, Hindalco up by 4.75%, Cairn India up by 4.57%, Tata Steel up by 3.52% and Infosys up by 3.45%. On the flip side, GAIL India down by 1.02% and Hindustan Unilever down by 0.41% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 11.99 points or 0.76% to 1,599.11, Jakarta Composite increased 16.77 points or 0.39% to 4,335.36, Straits Times increased 20.25 points or 0.7% to 2,905.57, Shanghai Composite increased 53.07 points or 1.67% to 3,223.52, KOSPI Index increased 55.52 points or 2.96% to 1,934.20, Taiwan Weighted increased 285.42 points or 3.57% to 8,286.92, Hang Seng increased 705 points or 3.32% to 21,964.04 and Nikkei 225 increased 1343.43 points or 7.71% to 18,770.51.