Benchmarks make gap-up opening buoyed by strong global sentiments

Buoyed by rally across the globe, Indian equity markets have made a gap up start on the first day of the August F&O series with Nifty recapturing its crucial 5,100 level. The sentiments across the globe remained ebullient led by ECB President Mario Draghi’s comments on Eurozone. The US markets went for a rally overnight on getting positive news from the unemployment claims front and as assurance came from European Central Bank President Mario Draghi saying his bank is ready to do whatever it takes to preserve the single currency. While, most of the Asian equity indices were trading in the green at this point of time, indicating optimistic sentiments across the region. Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE’s -- Sensex -- and NSE’s -- Nifty -- to trade comfortably over their crucial 16,800 and 5,100 mark respectively. On the sectoral front, banking, realty and metal remained the top gainers while there was no loser on the index. Meanwhile, retail stocks like, Pantaloon Retail, Shoppers Stop and Trent all edged higher after Trade Minister Anand Sharma said that the government is committed to opening its retail sector to foreign investment and will not reverse its stance. The broader indices too witnessed a great traction in the early trade. The market breadth on the BSE was positive; there were 995 shares on the gaining side against 317 shares on the losing side while 46 shares remained unchanged.

The BSE Sensex opened at 16,860.16; about 221 points higher compared to its previous closing of 16,639.82, and has touched a high and a low of 16,915.76 and 16,842.61 respectively.

The index is currently trading at 16,842.61, up by 202.79 points or 1.22%. There were 27 stocks advancing against just 3 declines on the index.

The overall market breadth has made a strong start with 73.27% stocks advancing against 23.34% declines. The broader indices too were exhibiting traction in the trade; the BSE Mid cap and Small cap indices surged 0.88% and 0.81% respectively.

The top gaining sectoral indices on the BSE were, Bankex up by 1.96%, Realty up by 1.63%, Metal was up by 1.63%, Auto up by 1.31% and CG up by 1.17%. While, there were no losers on the index.

The top gainers on the Sensex were Tata Motors up by 3.88%, ICICI Bank up by 3.21%, Tata Steel up by 2.64%, Hindalco up by 2.51% and Bharti Airtel up by 2.46%.

On the flip side, Sun Pharma was down by 0.71%, Dr Reddy was down by 0.35%  and Bajaj Auto was down by 0.20% were the few losers on the Sensex.

Meanwhile, showing the sign of slowing global economy, Foreign Direct Investment (FDI) in India extended its decline in May with inflows slipping to $1.32 billion from $4.66 billion in the same month last year. The more alarming thing is that the FDI is declining at a time when India's economic growth has slipped to 9 year low of 6.5% in 2011-12, while in the last quarter it was merely 5.3%.

Foreign fund inflows in April almost halved to $1.85 billion from $3.12 billion in April 2011, which is likely to keep the balance of payments under pressure and could also impact the already depreciating rupee. Further if the commodity and oil prices increases globally, a weaker domestic currency will add to inflationary pressures.

As per reports, maximum FDI inflows in May were received from services of $754 million, pharmaceuticals $401 million, construction $181 million and power $100 million. Country wise in May, India received the highest FDI from Mauritius $1.12 billion million, followed by the Netherlands $409 million, the UK $378 million, Singapore $231 million and Cyprus $177 million.

The S&P CNX Nifty opened at 5,124.30; about 81 points higher compared to its previous closing of 5,043.00, and has touched a high and a low of 5,130.70 and 5,110.15 respectively.

The index is currently trading at 5,112.95, higher by 69.95 points or 1.39%. There were 46 stocks advancing against just 4 declines on the index.

The top gainers of the Nifty were Tata Motors up by 4.05%, ICICI Bank up by 3.17%, Sterlite Industries up by 3.08%, Tata Steel up by 2.75% and ACC up by 2.73%.

On the flip side, Sun Pharma down by 0.47%, Dr Reddy down by 0.35%, Hero MotoCorp down by 0.15% and Bajaj Auto down by 0.15%, were the few losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was up by 2.53 points or 0.12% to 2,128.53, Hang Seng surged by 344.95 points or 1.83% to 19,237.74, Jakarta Composite gained 57.41 points or 1.46% to 4,061.81, Nikkei 225 added 118.61 points or 1.40% to 8,561.71, Kospi Composite gained 36.72 points or 2.09% to 1,819.67 and Taiwan Weighted added 128.45 points or 1.81% to 7,097.14.

On the flip side, KLSE Composite was down 1.79 points of 0.11% to 1,622.12 and Straits Times was down by 2.76 points or 0.09% to 3,001.81.