Indian equities gain strength; trade hovers near day's high

Indian equities gain strength to continue its firm trade hovering near the highest point of the day in the late afternoon session on back of buying in front line counters and taking clues from the European counterparts. The sentiments in the market were bolstered after receiving comments from the Finance Minister that he intends to shortly unveil a path of fiscal consolidation building hopes that the new FM would soon kick-start the reform process. Also, provisional data showing continuation of buying of Indian stocks by foreign funds on Monday, August 06, 2012, added optimism on the street. Traders were seen piling up position in IT, Auto and TECk sector. In the scrip specific development, Punjab Chemicals & Crop Protection was seen trading firm after the company received approval for CDR package from RBI. Jet Airways was trading in green after CLSA upgraded the company to buy from sell, and raised its target price citing the airline's strong passenger yield environment, focus on route rationalization on its international routes and tight cost control. Bharat Earth Movers (BEML) was trading in red hovering near its lowest level since December 2008, after reporting net loss of Rs 39 crore for the quarter ended June 30, 2012, due to fall in operational income and higher operating cost.

On the global front, the Asian markets were trading in green barring Jakarta Composite and KLSE Composite while the European markets were trading on a mixed note. German Chancellor Angela Merkel’s government backed the European Central Bank’s bond-buying plan. Greek leader and troika negotiators concluded a week long assessment of the country’s progress in meeting the bailout terms. Greek government agreed to stay on track to save €3 billion in 2012 and additional €10 billion in 2013 and 2014. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,300 and 17,600 levels respectively. The market breadth on BSE was positive in the ratio of 1470:1151 while 127 scrips remained unchanged.

The BSE Sensex is currently trading at 17,601.41, up by 188.45 points or 1.08% after touching a high of 17,611.76 and a low of 17,417.92. There were 28 stocks advancing against 2 declines on the index.

The broader indices continued to trade in green; the BSE Mid cap index and Small cap index were trading higher by 0.56% each.

The top gainers on the BSE sectoral space were IT up by 1.69%, Auto up by 1.68%, TECk up by 1.46%, Realty up by 1.37% and Bankex up by 1.19%, while there were no losers on the index.

Tata Motors up by 4.07%, Bajaj Auto up by 2.95%, SBI up by 2.13%, TCS up by 2.03% and Gail India up by 2.01% were major gainers on the Sensex, while Hero MotoCorp down by 1.40% and Bharti Airtel down by 0.29% were only losers on the index.

Meanwhile, on the backdrop of recent fall in volumes of apparel exports to the US and the European Union, the centre is all set to take expedite measures to boost the textile industry, while the government has expressed confidence to attain its $18 billion target or Rs 99, 000 crore for this FY 2012-13, which is about 32% rise year-on-year to that of $13.6 billion achieved in FY 2011-12.

Union Joint Secretary, Ministry of Textiles, V Srinivas urged the industry to explore the duty benefit to Japan and EU markets and also to focus on market penetration to the existing markets. The ministry confirmed that it is planning out two-efficient strategies so as to accelerate apparel exports in the short-term and medium-term, keeping in view that readymade garments segment has a huge potential to increase the market share in traditional and new markets worldwide.

The sector has the potential to create one million jobs for an investment of $1 billion (Rs 5, 500 crore). The ministry has also affirmed that the enhancement of technology up gradation funding scheme to Rs 15,808 crore in the sector is in pipeline, anticipating an investment of Rs 150,000 crore over the next five years. An integrated skill development scheme will also be launched to train the workforce for operating sewing machines, it added.

The government had also ensured expansion of capacities around the apparel hub of Tirupur in Tamil Nadu as well as in Ludhiana and Kolkata. It also agreed to make labor laws more flexible so as to scale up manufacturing base.

The S&P CNX Nifty is currently trading at 5,340.35 up by 57.80 points or 1.09% after trading in a range of 5,341.95 and 5,281.65. There were 42 stocks advancing against 8 declining ones on the index.

The top gainers on the Nifty were IDFC up by 4.13%, Tata Motors up by 3.91%, JP Associates up by 3.03%, Bajaj Auto by 2.77% and Ambuja Cement up by 2.62%. While, BPCL down by 1.86%, Hero MotoCorp down by 1.35%, Power Grid down by 1.33%, Bharti Airtel down by 0.34% and Cairn India down by 0.30% were top losers on the index.

Majority of Asian indices were trading in green; Kospi Composite Index held up by 0.05%, Hang Seng index gained 0.37%, Nikkei 225 added 0.88%, Taiwan Weighted inched higher by 0.13%, Shanghai Composite added 0.13% and Straits Times inched up 0.01%.

On the flip side, Jakarta Composite dropped by 0.50% and KLSE Composite declined by 0.08% were the only losers on the index.

The European markets were trading on a mixed note with, France’s CAC 40 ascending 0.45%, Germany’s DAX added 0.54% and the United Kingdom’s FTSE 100 lost 0.11%.