Benchmark equity indices take a ‘U-Turn’ from low point of day

Benchmark equity indices have taken a ‘U-Turn’ from low point of day in order to trade in positive terrain although with modest gains. Selective buying by funds in blue-chip stocks at prevailing levels, has mainly led to the reversal of trend at Dalal Street, thereby signaling of another green close of Indian equity markets for second consecutive session of the week.

Resilience seems to play at fore for Indian equity markets in light of sluggish trend of regional counterparts, mainly on the back of stocks belonging from the Realty, Information Technology and  Technology counters. However, the drag of the Metal, Auto and Oil & Gas counters is seen weighing on the markets. On the global front, following weak closings in U.S. and European equities markets, Asian pacific shares too slipped on Wednesday as fresh concerns about China's economic slowdown dampened investors' risk appetite that was generated by a brightening outlook for the U.S. economy. Meanwhile, the US future indices continued to depict encouraging leads by showing an uptick in the screen trade.

Back on the home turf, the benchmark 30 share index of Bombay Stock Exchange (BSE)-Sensex-after languishing below the crucial 17300 level, is currently trading above it, with a slender profit of over 0.20%. Similarly, 50 shares widely followed index of National Stock Exchange (NSE) - Nifty-too is floating above the 5250 bastion with marginal gains, above its neutral line. The broader indices, performing well for themselves, are currently outperforming their larger counterparts. The overall market breadth on BSE is strongly in the favour of advances which have thumped declines in the ratio of 1282:964, while 113 shares remained unchanged.

The BSE Sensex is currently trading at 17,340.21, up by 24.03 points or 0.14%. The index has touched a high and a low of 17,378.08 and 17,275.88 respectively.   There were 16 stocks advancing against 14 declines on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged by 0.57% and 0.52% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 0.89%, Information technology up 0.86%, TECK up by 0.81%, Health care (HC) up by 0.64% and Capital Goods (CG) up by 0.62%. While, Metal down by 0.63%, Auto down by 0.50%, Oil & Gas down by 0.29%, Fast Moving Consumer Goods (FMCG) down by 0.01% were the top losers on the index.

The top gainers on the Sensex were TCS up by 1.96%, HUL up by 1.81%, Coal India up by 1.28%, Bajaj Auto up by 1.06% and BHEL up by 0.95%.

On the flip side, Hindalco Industries down by 2.42%, Tata Motors down by 2.21%,  Jindal Steel down by 1.61%, Sterlite Industries down by 1.27% and Maruti Suzuki down by 1.02% were the top losers on the Sensex.

Meanwhile, foreign direct investment (FDI) has increased by a whopping 92% in January 2012 as compared to the same month last year. Foreign inflows to the Indian economy were to the tune of $2 billion in January 2012 as compared to $1.04 billion in January 2011. Cumulative inflows for the period of April-January were to the tune of $26.19 billion in the current fiscal as compared to $19.42 billion in FY’11.

Services topped the list of sectors to receive the largest FDI for the period April-January in FY’12 to the tune of $ 4.83 billion, followed by pharmaceuticals ($3.20 billion), telecommunication ($1.99 billion), construction ($2.23 billion), power ($1.56 billion) and metallurgical industries ($1.65 billion).

Mauritius remained the top source of inflows ($8.91 billion), due to the double taxation avoidance treaty. Other sources were Singapore ($4.30 billion), Japan ($2.75 billion), UK ($2.75 billion), Germany ($1.46 billion), Netherlands ($1.16 billion) and Cyprus ($1.31 billion).

Experts feel that this number of $2 billion is not big and if investor sentiment is improved by bringing in  reforms like allowing 100% FDI in multi brand retail and insurance, it could be pushed much further.

Recently, the government has liberalised the FDI regime and allowed overseas investment in bee-keeping and share-pledging for raising external debt. Besides, the conditions for FDI in construction of old-age homes and educational institutions have been eased by not subjecting them to the minimum and built-up area, capitalisation and lock-in period norms as applicable for the construction activities.

The S&P CNX Nifty is currently trading at 5,282.65, up by 7.80 points or 0.15%.  The index has touched a high and a low of 5,287.90 and 5,256.00 respectively. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were Ambuja Cement up by 3.10%, JP Associate up by 2.49%, ACC up by 2.27%, TCS up by 2.27% and Ranbaxy Industries up by 1.73%.

On the flip side, Hindalco down by 2.13%, Reliance Power down by 1.91%, Tata Motors down by 1.82%,  Jindal Steel down by 1.72% and  Cairn India down by 1.69%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined by 0.45%, Hang Sang slid 0.19%, Nikkei 225 lowered by 0.58%, Straits Times lost 0.34%, Seoul Composite surrendered 0.59%

On the flip side, Jakarta Composite gained 0.09%, KLSE Composite added 0.04% and Taiwan Weighted accumulated gains of 0.13%.