Markets near day’s high on central banks rate cut hopes

Despite of lower than expected February industrial production (IIP) numbers, Indian equity markets extended gains and currently trading near high point of the day on hopes of interest rate cut at Reserve Bank of India's policy review meet. However, growth in February industrial production has come in at 4.1%, which is an improvement over the January number but lower than market expectation. The BSE benchmark rose 165, while Nifty gained 54 points. On the sectoral front rate sensitive stocks like banks and auto were trading higher on rate cut hopes. Stocks from power, consumer durables, PSU and realty sectors were also finding good support, while healthcare stocks were slightly subdued. On the global front, Asian markets were up on buying activity. Back home, the market breadth favoring the positive trend; there were 1,622 shares on the gaining side against 725 shares on the losing side while 112 shares remained unchanged.

The BSE Sensex is currently trading at 17,365.17, up by 165.77 points or 0.96%. The index has touched a high and low of 17,368.76 and 17,276.87 respectively. There were 26 stocks advancing against 4 declining ones on the index.

The broader indices also following frontline indices; the BSE Mid cap and Small cap indices were up by 1.19% and 1.25% respectively.

The top gaining sectoral indices on the BSE were, Bankex up by 1.76%, CG up by 1.50%, Power up by 1.32%, Auto up by 1.29% and Metal up by 1.28%. While, HC down by 0.15% was the lone loser on the index.

The top gainers on the Sensex were Maruti Suzuki up by 2.36%, Hero MotoCorp up by 2.30%, Hindalco Industries up by 2.25%, BHEL up by 2.15% and SBI up by 2.12%. On the flip side, Sun Pharma down by 0.90%, ONGC down by 0.55%, Infosys down by 0.23% and Wipro down by 0.13% were the top losers on the Sensex.

Meanwhile, the new US competition law that allows only those manufacturers to export to the US who can provide proof of using genuine hardware and licensed software for their business has led to concerns in the Indian industry. It is anticipated that the new law will seriously impact the Indian exporters who use pirated software.

However, the US is of the view that the law will help prevent unfair competition between IT compliant and the non-compliant manufacturers. It will also prevent usage of illegal IT either knowingly or unknowingly. The first law in this regard was passed in the states of Washington and Louisiana on November 4, 2011. Now Attorney Generals of 39 US states have signed a resolution to combat unfair trade practices. 

Indian industry body FICCI has raised concerns over the new law. The industry body is of the view that usage of IT in manufacturing is increasing by leaps as bounds to drive efficiency, productivity and competitiveness. However, this usage is not necessarily well-managed or regulated within companies which are typically focused on product lines leading to issues of non compliance and unfair competition market conditions.

FICCI in cooperation with other business organizations like FIEO organized a workshop to sensitize representatives from chemicals, garments, textiles, steel, automotive, electronics, engineering industries about the law.

The S&P CNX Nifty is currently trading at 5,281.60, higher by 54.75 points or 1.05%. The index has touched a high and low of 5,281.80 and 5,246.75 respectively. There were 42 stocks advancing against just 8 declines on the index.

The top gainers of the Nifty were Axis Bank up by 2.73%, IDFC up by 2.64%, Hindalco up by 2.58%, Maruti up by 2.56% and Hero MotoCorp up by 2.35%.

On the flip side, Cairn India down by 1.77%, Dr Reddy down by 1.65%, Sun Pharma down by 1.22%, Infosys down by 0.39% and Ranbaxy down by 0.37% were the major losers on the index.

Most of the Asian equity indices were trading in the positive terrain; Shanghai Composite gained 1.44%, Hang Seng added 0.74%, Jakarta Composite and KLSE Composite were up by 0.24% each, Nikkei 225 rose 0.70%, Straits Times expanded 0.74% and Taiwan Weighted lured 0.08%.

On the flip side, Seoul Composite down by 0.39% was the lone loser in the Asian region.