Indian equities continue northward journey; CG, Realty and IT leads

Indian equities continue its firm trade hovering near the highest point of the day in the late afternoon session on back of buying in front line counters amid tentative improvement in market participants’ risk appetite. Traders were seen piling up position in Capital Goods (CG), Realty and IT sector. L&T and BHEL from Capital Goods space was seen trading firm in green pulling the markets higher. DLF from Realty counter was seen trading with gain of around more than two and half percent pushing the markets higher. TCS, Infosys and Wipro from IT pack were trading in green edging the markets higher. The IT sector stocks kept buzzing in the session amid reports of a merger between two major companies viz. Tech Mahindra and Satyam Computer Services. Also, Industry heavyweight RIL was seen trading firm in green giving the much needed support. In the scrip specific development, shares of footwear makers Bata India, Liberty Shoes and Relaxo Footwear were trading firm. The Union Budget 2012-13 has enhanced the excise duty exemption limit on non-leather footwear. On the global front, Asian markets were trading on a mix note while the European markets were trading in green on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,300 and 17,500 levels respectively. The market breadth on BSE was in favor of advances in the ratio of 1605:1115 while 142 scrips remained unchanged.

The BSE Sensex is currently trading at 17,534.31 up by 218.23 points or 1.26% after trading as high as 17,539.31 and as low as 17,275.88. There were 25 stocks advancing against 5 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index gained 1.34% while Small cap added 0.96%.

On the BSE sectoral space, Capital Goods up by 2.92%, Realty up 2.33%, IT up 1.83%, TECk up 1.69% and Bankex up 1.66% were the major gainers, while there were no losers in the space.

L&T up 3.46%, TCS up 3.19%, DLF up 2.94%, Tata Steel up 2.50% and BHEL up 2.40%, were the major gainers on the Sensex, while Hindalco Industries down 1.26%, Jindal Steel down 0.66%, Hero MotoCorp down 0.09%, ITC down 0.07% and Tata Motors down 0.04% were the only losers in the index.

Meanwhile, IMF has applauded the Finance Minister’s efforts towards fiscal consolidation by capping subsidies at 2% of GDP in the Union Budget. This has come in as quite a surprise at a time when the budget is facing criticism for not taking bold initiatives to pursue economic reforms and is being termed as ‘a lost opportunity’.  The credit rating agency Moody’s too has given a ‘credit negative’ outlook to the economy, post the budget.

As per the International Monetary Fund (IMF) Managing Director Christine Lagarde, the decision of the Indian government to cap subsidies at 2% of GDP, is a solid anchoring of the role of subsidies and is encouraging as it confirms the governments continued efforts towards fiscal consolidation. The determination to improve the tax code shown in the Budget has also been appreciated by Lagarde.

The IMF chief has also described India's expected growth rate of 7% next year as ‘significant’. Referring to the global economic scenario, Lagarde has observed that the global situation is improving and the world economy is better placed than what it was three months ago. However, disruptions in supply of oil from Iran can push global crude prices up by 30%, that too at a time when the price is already hovering at $125 a barrel.

IMF has appreciated the continued interest in encouraging capital investment to address bottlenecks in infrastructure, especially in power sector and is also keen to see an increase in FDI investments in India. 

IMF has been playing an important role in the Indian economy by providing assistance from time to time. It has also been providing consultancy in the determination of various policies of India. The multilateral agency is also keen on implementing quota reforms that will provide more voting rights for emerging economies like India and China. The move will lift large emerging powers like India, Brazil and Russia into the top 10 of the 187-member institution.

The S&P CNX Nifty is currently trading at 5,334.15, higher by 59.30 points or 1.12% after trading as high as 5,343.20 and as low as 5,256.00. There were 40 stocks advancing against 10 declines on the index.

The top gainers on the Nifty were JP Associates up 3.84%, Reliance Infrastructure up 3.60%, L&T up 3.50%, SAIL up 3.44% and TCS up 3.31%.

Hindalco Industries down 1.59%, Cairn India down 1.51%, Jindal Steel down 1.47%, Hero MotoCorp down 0.38% and Sun Pharma down 0.30% were the major losers on the index.

In the Asian space, Hang Seng declined 0.15%, Nikkei 225 fell 0.55%, Straits Times dropped 0.05% and Seoul Composite shed 0.73%. On the other hand, Shanghai Composite gained 0.06%, KLSE Composite added 0.26%, Taiwan Weighted rose 0.12% and Jakarta Composite inched higher 0.18%.

The European markets were trading in green with, France’s CAC 40 added 0.85%, Germany’s DAX ascended 0.76% while Britain’s FTSE 100 gained 0.38%.