Benchmarks make gap up start on firm global cues; Nifty regains 4,900 mark

After witnessing two days of continuous consolidation, the Indian equity markets have made a gap up start triggered by a firming trend on other Asian bourses, following overnight gains on the US market driven by positive economic data.  The Asian markets were trading totally in the green at this point of time after some comforting news from the global economy front and as the Group of Seven nations yesterday agreed to coordinate their response to Europe’s turmoil. Back home, sustained buying in all the key heavyweights along with broader indices supported BSE’s -- Sensex -- and NSE’s -- Nifty -- to regain their crucial 16,200 and 4,900 mark respectively. Meanwhile, banking stocks spurred by the optimism of rate cut after Reserve Bank of India’s deputy central bank governor, Subir Gokarn, stated that there was ‘elbow room' to cut interest rates to boost the country’s waning growth. Moreover, infrastructure stocks too gained on reports that India’s Prime Minister Manmohan Singh had called for a meeting of various government officials on June 6, 2012 to discuss ways to kick-start stalled infrastructure projects. The broader indices were going neck to neck with benchmarks. The market breadth on the BSE was positive; there were 1,038 shares on the gaining side against 335 shares on the losing side while 59 shares remained unchanged.

The BSE Sensex opened at 16,100.36; about 80 points higher compared to its previous closing of 16,020.64, and has touched a high of 16,233.84 while low remained its opening.

The index is currently trading at 16,223.24, up by 202.60 points or 1.26%. All the 30 stocks on the Sensex were on advance side.

The overall market breadth has made a strong start with 72.49% stocks advancing against 23.39% declines. The broader indices too were trading with great traction; the BSE Mid cap and Small cap indices surged 0.90% and 0.81% respectively.

The top gaining sectoral indices on the BSE were, Power up by 1.90%, Realty up by 1.70%, Metal up by 1.68%, Bankex up by 1.66% and PSU up by 1.43%. While, there were no losers on the index.

The top gainers on the Sensex were Jindal Steel up by 2.19%, Tata Steel up by 2.11%, SBI up by 2.03%, HUL up by 1.94% and Sterlite Industries up by 1.83%. While there were no loser on the Sensex.

Meanwhile, giving the much needed respite not only to the farmers but also to the policy makers of the nearly $2-trillion Indian economy, the south-west monsoon rains hit the southern coast of Kerala. According to India Meteorological Department (IMD) officials rains have been pouring in parts of Kerala since last few days, but the IMD parameters indicate that the south-west monsoon rains arrived only on Tuesday, June 05, 2012. They also expect that monsoon showers to progress steadily for the next two to three days and reach over Lakshadweep, Kerala, coastal Karnataka and Andaman and Nicobar Islands, sub-Himalayan West Bengal, Sikkim and northeastern states.

Though the annual rains have arrived four days behind schedule, it is not a cause of concern as the progress of seasonal rainfall phenomenon was well with the forecast limits that have a model error of four days. The largely scheduled arrival of rains has also calmed to some extent the growing anxiety among policy-makers about the rainy season ahead. With a population of about 1.2 billion, Asia’s third largest Indian economy is the world's second-biggest producer of rice, wheat, sugar and cotton and also one of the largest consumers of agricultural products.

The MET department has predicted that India is likely to receive average rains for the third straight year in 2012, increasing the likelihood of higher farm production by aiding farmers to plant summer-sown crops such as rice, soybean and cotton on time. The monsoon rains are vital for an agrarian economy like India as about 55 percent of the south Asian nation's arable land is rain-fed, and farm sector accounts for about 15 percent of the overall economy.

The S&P CNX Nifty opened at 4,886.65; about 29 points higher compared to its previous closing of 4,863.30, and has touched a high and a low of 4,928.70 and 4,886.15 respectively.

The index is currently trading at 4,925.20, higher by 61.90 points or 1.27%. There were 48 stocks advancing against just 2 declines on the index.

The top gainers of the Nifty were Reliance Infra up by 2.40%, Power Grid up by 2.36%, Jindal Steel up by 2.34%, Asian Paints up by 2.34% and Bank of Baroda up by 2.23%.

On the flip side, BPCL down by 0.67% and Dr Reddy down by 0.52% remained the few losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite rose 1.10 points or 0.03% to 2,310.82, Hang Seng Index surged by 209.85 points or 1.15% to 18,468.88, Jakarta Composite soared 76.67 points or 2.06% to 3,794.55, KLSE Composite gained 6.84 points or 0.44% to 1,567.20, Nikkei 225 climbed by 110.18 points or 1.31% to 8,492.18, Straits Times was up by 24.08 points or 0.89% to 2,736.39, and Taiwan Weighted added 62.09 points or 0.89% to 7,062.54.

South Korea’s KOSPI Composite Index remained closed for a holiday.