Sensex continues firm trade; rupee strengthens

Stock markets in India continued their firm trade in Monday’s afternoon session with the benchmark equity indices garnering over half a percentage point on hopes that the government’s new stimulus measures, to be announced today, will boost the currency and economy. Moreover, appreciation in rupee also boosted the trading sentiments. Globally, Asian shares slipped mostly in the red over concerns about faltering global growth, with South Korean shares losing more than 1 percent. Moreover, European counters also opened in the red. Back home, the biggest gains came in the currency, which soared over 1 percent, a session after falling to record lows. The rupee traded 68 paise higher at 56.43 against the dollar. On the BSE sectoral space, Consumer durables remained the top gainer followed by capital goods and banking pockets. However, Software remained the lone loser on the back of sharp rise in the rupee. Meanwhile, market heavyweight - Reliance has added 1 percent at Rs 719 after slipping 3.5 percent in the two previous sessions. The fall was triggered by reports of Canada's Niko Resources sharply cutting the reserves estimate at the KG D6 gas blocks. Moreover, the broader markets too were trading in the positive terrain with decent gains around a percent, performing relatively better than their larger peers while, the market breadth on BSE was in favor of advances in the ratio of 1659: 822 while 103 scrips remained unchanged.

The BSE Sensex is currently trading at 17,087.04 up by 114.53 points or 0.67% after trading as high of 17,131.15 and as low of 17,023.06. 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 declined 0.83% and Small cap index shed 0.93%.

On the BSE sectoral space, Consumer Durables up 1.23%, Capital Goods up 1.15%, Bankex up 1.11%, Realty up 1.09% and Auto up 0.93% remained the top gainers, while IT down 0.05%, was the lone laggard in the space.

Maruti Suzuki up 2.38%, GAIL up 1.91%, Coal India up 1.72%, Tata Power up 1.59% and ICICI Bank up 1.46% were the major gainers on the Sensex, while ONGC down 0.72%, Hindalco down 0.64%, TCS down 0.35%, Wipro down 0.24% and Infosys down 0.07% were the major losers in the index.

Meanwhile, Union Finance Minister Pranab Mukherjee, who is front runner in the race for becoming the next President of India, opined that the government is likely to come up with a host of measures to bolster market conditions. The finance minister stated that there are various steps that have been taken already and the government will be announcing further measures on June 25, 2012 to boost the wilting economic sentiment.

On growing economic growth concerns, the finance minister admitted that the gross domestic product (GDP) is showing signs of weakness but he remained confident that the economy will bounce back and sentiments would turnaround once government’s measures are implemented. The government is also likely to come out with measures to revive investor confidence and check fiscal deficit and current account deficit.

The government is also likely to announce measures to rein in the beleaguered rupee’s depreciating streak. The Indian currency, which has been Asia’s worst performing currency, touched its historical lows of 57.31 against the American dollar on June 22, 2012. Expressing worries over sharp depreciation in rupee and inflationary pressures, Pranab Mukherjee explained that at a time when the global economy is in turmoil, no country including a large economy like India can anticipate that there will be pocket of development. He further stated that the third largest economy in terms of purchasing power parity cannot remain insulated from adverse external factors.

With rupee losing over 20 percent against the US dollar in the last one year, it is expected that the Finance Ministry along with Reserve Bank of India would resort to measures like refinancing exporters via foreign currency and an interest rate subvention. Besides the deposit program, relaxing limits on foreign investment could also be considered by the government to halt the currency’s downslide.

The S&P CNX Nifty is currently trading at 5,182.15, higher by 36.10 points or 0.70% after trading as high as 5,194.60 and as low as 5,158.45. There were 41 stocks advancing against 9 declines on the index.

The top gainers on the Nifty were Maruti Suzuki up 2.49%, GAIL up 2.35%, Cairn up 2.22%, IDFC up 1.75% and JP Associates up 1.75%.

BPCL down 0.81%, HCL Tech down 0.63%, ONGC down 0.55%, Hindalco down 0.47% and TCS down 0.42% were the major losers on the index.

In the Asian space, Shanghai Composite declined 1.63%, Hang Seng dropped 0.41%, Jakarta Composite slipped 0.58%, Nikkei 225 dipped 0.72%, Straits Times Index contracted 0.35%, KOSPI Composite Index crumbled 1.19% and Taiwan Weighted was down by 0.77%. However, KLSE Composite ascended 0.08% remained the lone gainer

The European markets got off to a negative start as France’s CAC 40 surged 0.89%, Germany’s DAX ascended 0.67% and the United Kingdom’s FTSE 100 jumped 0.28%.