Firm trade prevails; Nifty above 5,150 mark

Indian equities gain strength to continue firm trade above neutral line in the late afternoon session on the back of buying in front line counters and taking clues from upbeat European counterparts. The sentiments also got support after data showed resumption of buying of Indian stocks by foreign institutional investors. Traders were seen piling up position in Capital Goods, Realty and Power sector. Besides, banking sector stocks were seen trading in green but on cautious note ahead of RBI’s crucial quarterly policy review, which is scheduled tomorrow i.e. July 31, 2012, pinning the hopes that RBI governor Duvvuri Subbarao will spring a pleasant surprise in the form of a rate cut. In the scrip specific development, Muthoot Finance was firm in green on plan to raise funds by public issue of up to Rs 500 crore. Bank of Baroda, Allahabad Bank, Union Bank of India and Oriental Bank of Commerce were trading in green on reporting better-than-estimated quarterly numbers.

On the global front, the Asian markets were trading in green barring Shanghai Composite while the European markets were too trading on optimistic note. Euro Group head Jean-Claude Juncker on July 29, 2012, stated that the euro-zone members, their rescue fund and the European Central Bank will soon act to save the euro. Investors are now anticipating that European Central Bank will announce new measures to curb ongoing euro-zone debt crisis. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,150 and 17,000 levels respectively. The market breadth on BSE was positive in the ratio of 1538:1057 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 17,062.27, up by 223.08 points or 1.32% after touching a high and low of 17,098.37 and 16,919.14 respectively. There were 26 stocks advancing against 3 declines while 1 stock remained unchanged on the index.

The broader indices were too trading in green; the BSE Mid cap index up 1.13% while Small cap index was up 0.89%.

Buying was witnessed across the board, but the top gaining sectoral indices on the BSE were, Capital Goods up by 2.54%, Realty up by 2.47%, Power up by 2.35%, Bankex up by 2.17% and Consumer Durable up by 1.88%, while there were no losers.

The top gainers on the Sensex were Tata Motors up by 4.02%, ICICI Bank up by 3.74%, SBI up by 3.52%, L&T up by 2.93% and BHEL up 2.74%. While, Wipro down by 1.32%, Dr Reddy’s Lab down by 0.56% and ONGC down by 0.02% 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 5174.00, up by 74.15 points or 1.45% after touching a high and low of 5184.90 and 5129.75 respectively. There were 44 stocks advancing against 5 declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Axis Bank up by 4.37%, JP Associates up by 3.87%, Reliance Infrastructure up by 3.75%, Tata Motors up by 3.74% and ICICI Bank up by 3.71%.

On the flip side, Wipro down by 1.58%, Ambuja Cement down by 1.21%, ONGC down by 0.74%, Dr Reddy’s Lab down by 0.10%, and HCL Tech down by 0.04% were the only losers on the index.

Mostly Asian equity indices were trading in green; Hang Seng index gained 1.61%, Nikkei 225 added 0.80%, Taiwan Weighted inched higher by 0.48%, KLSE Composite gained 0.12%, Straits Times shot higher by 1.18%, Kospi Composite Index jumped by 0.80% and Jakarta Composite rose by 0.15%. On the flip side, Shanghai Composite down by 0.89% was the sole loser amongst the Asian pack.

The European markets were trading in green with, France’s CAC 40 ascended 0.37%, Germany’s DAX gained 0.52% and the United Kingdom’s FTSE 100 added 0.39%.