Bourses trade near intra-day’s high; positive European markets provide the require fillip

Amassing strength slowly and steadily, Indian equity markets are now trading near intra-day’s high level, led by prominent gains of Bankex, Realty and Capital Goods counters.  The global risk-on sentiment seems to buoying the sentiment at Dalal Street combined with the optimism ahead of RBI’s crucial quarterly policy review, doing the needful to sustain the gains of the bourses. 30 share barometer index of BSE, Sensex, is currently floating above the 17,000 psychological level, with gains of over a percentage, while the widely followed 50 share barometer index of NSE, Nifty, added a percentage points, to surpass the 5150 bastion.  The broader indices, too enticed additional traction.

On the global front, Asian shares extended their gains supported by mounting expectations the U.S. Federal Reserve and European Central Bank will act to support their fragile economies, as market players await this week's monetary policy meetings in Europe and the United States.  Meanwhile, positive opening of European markets also provided the required fillip to the bourses.

Back home, slew of upbeat earnings in the banking space, has mainly got the markets going. Public sector lender Allahabad Bank shot 4.50% on reporting 23% jump in the April-June quarter of 2012 net profit at Rs 514 crore due to lesser provisions. Meanwhile, Bank of Baroda’s scrip rose over 3% on reporting a rise of 10% in its Q1FY13 net profit at 1,139 crore on the back of strong fee income. Additionally, Oriental Bank of Commerce too shot over 6% at Rs 228 after reporting a better-than-expected net profit of Rs 391 crore for the quarter ended June 2012, on back of higher other income and lower provisioning.

The BSE Sensex is currently trading at 17,024.80, up by 185.60 points or 1.10% after touching a high and low of 17,037.24 and 16,919.14 respectively. There were 24 stocks advancing against 6 declines on the index. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1446:965, while 100 shares remained unchanged.

The broader indices too enticed additional traction; the BSE Mid cap index up 0.94% while Small cap index was up 0.66%.

Buying was witnessed across the board, but the top gaining sectoral indices on the BSE were, Bankex up by 2.38%, Realty up by 1.98%, CG up by 1.84%, Power up by 1.83% and Health Care up by 1.62%.

The top gainers on the Sensex were ICICI Bank up by 4.28%, Sun Pharma up by 2.70%, Tata Motors up by 2.61%, SBI up by 2.41% and L&T up by 2.27%. While, Wipro down by 1.63%, TCS down by 0.55%, Hindalco Industries down by 0.51%, Dr Reddy’s Lab down by 0.13% and Maruti Suzuki down by 0.09% remained the few losers on the Sensex.

Meanwhile, in a bid to fine tune the controversial General Anti Avoidance Rules (GAAR) policy, Prime Minister-appointed expert committee has initiated the consultation process with various stakeholders to usher in greater clarity and transparency in the draft norms. In light of heightening flak from foreign investors, implementation of GAAR, which was introduced in the Budget 2012-13 to check tax evasion, was deferred to April, next year.

Earlier this month, Prime Minister Manmohan Singh appointed a four-member committee headed by noted economist and tax expert Parthasarathi Shome to rework on GAAR. A new panel led former adviser to the finance minister during P Chidambaram’s tenure between 2004 and 2008, will prepare a road map on GAAR by September 30. N Rangachary, former IRDA chairman, Ajay Shah and Sunil Gupta, joint secretary, tax policy and legislation, department of revenue and a member from the earlier panel, will also be a part of the panel.

The Shome committee after reading and vetting the responses to the draft guidelines that the finance ministry has put out on June 28, will draft second GAAR guidelines by August 31, which would be submitted along with its road map for implementation by the end of September.

The S&P CNX Nifty is currently trading at 5165.20, up by 65.35 points or 1.28% after touching a high and low of 5170.00 and 5129.75 respectively. There were 42 stocks advancing against 8 declines on the index.

The top gainers of the Nifty were ICICI Bank up by 4.16%, Cairn up by 3.68%, Reliance Infra up by 3.66%, JP Associates up by 3.65% and Axis Bank up by 3.50%.

On the flip side, Wipro down by 1.90%, Kotak Bank down by 0.62%, Ambuja Cement down by 0.47%, TCS down by 0.38%, Hindalco down by 0.68%, and Kotak Bank down by 0.37% and Maruti Suzuki down by 0.21% were top losers on the index.

Mostly Asian equity indices were trading in green; Hang Seng index gained 1.23%, Nikkei 225 added 0.80%, Taiwan Weighted inched higher by 0.48%, KLSE Composite gained 0.02%, Straits Times shot higher by 0.89%, Kospi Composite Index jumped by 0.80% and Jakarta Composite rose by 0.34%. On the flip side, Shanghai Composite down by 0.69% was the only loser amongst the Asian pack.

European markets got off to positive start; CAC 40 gained 0.77%, DAX added 0.82% and FTSE100 rose 0.24%.