Appreciation of rupee cheers investors at Dalal Street; Sensex nears the 17100 level

Appreciation of rupee has bought some cheer into Indian equity markets as bourses sustaining their morning enthusiasm are trading with gains of over 0.50 percentage points. Indian rupee rebounded early Monday to open sharply higher at 56.73 against the US dollar after the government assured to announce measures shore up the battered currency and economy. Meanwhile, investors were also seen piling up position after global rating agency, Moody's Investors Service said it is maintaining a stable outlook on India's sovereign credit rating. It averred that credit challenges such as weak fiscal performance, inflationary trends and uncertain investment policy environment have been part of the Indian economy for decades and were therefore previously factored into India’s current Baa3 rating. 30 scrip sensitive index, after sneaking pass the 17k level, was at a striking distance of 17100 level, while, the widely followed index, Nifty, too appeared closer to the 5200 mark. However, the fears that trade may turn volatile ahead of the June series F&O expiry this week and subdued Asian peers, could limit the gains of the bourses.

Stocks from rate sensitive, Bankex, Realty combined with Consumer Durable index were the prominent gainers on the index, however, stocks from Information Technology remained the only exception on BSE sectoral chart, trading with loss of over 0.05%. On the global front, Asian shares were trading cautious as concerns about faltering global growth and Europe’s intractable debt crisis continued to sap investor confidence. The US future indices too were showing a downtick in the screen trade. The overall market breadth on BSE was in the favour of advances which thrashed declines in the ratio of 1620:449, while 76 shares remained unchanged.

The BSE Sensex is currently trading at 17,097.57, up by 125.06 points or 0.74%. The index has touched a high and low of 17,116.67 and 17,023.06 respectively. There were 28 stocks advancing against 2 declining ones on the index. 

The broader indices continued to outclass larger peers; the BSE Mid cap and Small cap indices were trading higher by 1.09% and 1.16% respectively. Realty up by 1.59%, Bankex up by 1.42%, Consumer Durable up by 1.39%, Metal up by 1.03% and Power up by 0.97% were the top gaining sectoral index on BSE, while Information Technology down by 0.05%, was the lone loser on the index.

The top gainers on the Sensex were Maruti Suzuki up by 2.06%, ICICI Bank up by 1.84%, Jindal Steel up by 1.82%, SBI up by 1.75% and Tata Power up by 1.64%. On the flip side, Hindalco Industries down by 0.26% and Infosys down by 0.25% were the only losers amongst the 30 scrip sensitive pack.

Meanwhile, the Securities and Exchange Board of India (SEBI) has urged mutual fund houses to bring in pension-oriented funds as they have a large pool of money and a longer investment horizon. In this regard SEBI is in contact with tax authorities, to avail similar tax deduction benefits for mutual fund pension schemes as that of other pension funds.

Mutual fund pension schemes will allow legal mobilization of money on voluntary basis for long-term purposes .The pension products will lock money for a long term basis and will also entertain households’ participation in capital markets.

Since now there are only two pension schemes available in the market , UTI Retirement Benefit Pension Plan, launched in December 1994 worth of Rs 800 crore and  Templeton India Pension Scheme launched in March 1997 worth Rs 217 crore,  pointing to a wide unleashed market opportunity for the AMCs.Wen Jiabao has also vowed to encourage Chinese investments in India's infrastructure. India has set an investment target of at least Rs 2 lakh crore for core sector projects in the current fiscal. The two leaders also spoke of the joint mechanism set up by the two sides and agreed to form an inter-ministerial group within their respective countries on maritime matters, and deploy officials to hold formal talks on subjects pertaining to security, trade, navigation and other issues, including piracy.

The S&P CNX Nifty is currently trading at 5,185.80, higher by 39.75 points or 0.77%. The index has touched a high and low of 5,188.95 and 5,158.45 respectively.  There were 43 stocks advancing against 7 declines on the index.

The top gainers of the Nifty were Reliance Infra up by 1.99%, Maruti Suzuki up by 1.97%,ICICI Bank up by 1.94%, Jindal Steel and IDFC were up by 1.86%.

On the flip side, HCL Technologies down by 0.45%, Asian Paints down by 0.37%, Infosys down by 0.29%, Hindalco Industries down by 0.26% and Grasim Industries down by 0.18%, were the major losers on the index.

Most of the Asian equity indices were trading in the red. Nikkei fell by 0.39%, South Korea’s Kospi shed 1.33%, Straits Times declined 0.46%, Jakarta Composite dropped 0.06%, Shanghai Composite lost 0.56% and Taiwan Weighted skid 0.61%.

KLSE composite gained 0.16% and Hang Seng index up by 0.34% were the only gainers amongst the Asian pack.