Local equity markets gain some additional ground; Nifty nears 5400 mark

Local equity markets enticed some additional ground, tracing the sanguine trade of regional counterparts after German Chancellor Angela Merkel voiced support for the European Central Bank's efforts to contain the euro zone debt crisis. Showcasing tough face of resilience, Indian equity markets managed to gain traction even after Prime Minister Manmohan Singh's Economic Advisory Council lowered India’s economy forecast to 6.7% from earlier estimate of 7.5-8.0%. Global headwinds, sluggish policymaking, high interest rates and worries about a drought, which are expected to suppress country’s investment and demand, could be attributed as key reasons for this revised forecast. 

Back on Dalal Street, 30 share barometer index of Bombay Stock Exchange (BSE), Sensex, added over a century of points, appeared increasingly close to 17800 mark, while the 50 share index, Nifty, too appeared at a striking distance of 5400 mark. Meanwhile, broader indices, continued to trade in fine fettle with gains of over 0.70%. Sector-wise, FMCG, Auto and Information Technology counters, were the prominent gainers of the BSE sectoral chart, while Capital Goods down over 0.20%, was the only weak link of the trade.

On the global front, European shares got off to an optimistic start as investors took comfort in Germany's commitment to the euro, although gains remained fairly limited. German Chancellor Angela Merkel's commented on Thursday that Germany is committed to doing everything it can to maintain the common currency have helped to lift sentiment.

Closer home, the BSE Sensex is currently trading at 17,785.87, up by 128.66 points or 0.73% after touching a high of 17795.81 and low of 17696.98. There were 22 stocks advancing against 8 declines on the index, while remained unchanged. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1470:1033, while 140 shares remained unchanged.

The broader indices continued to trade in fine fettle; the BSE Mid cap index was up by 0.71% and Small cap index was up by 0.82%. The top gainers on the BSE sectoral space were, FMCG up by 1.62%, Auto up by 1.30%, IT up by 1.20%, TECk up by 0.93% and CD up by 0.74%, while CG down by 0.26% was the sole loser on the sectoral space.

Tata Motors up by 2.99%, Hindustan Unilever up by 1.79%, ITC up by 1.67%, Infosys up by 1.55% and M&M up by 1.51% were major gainers on the Sensex, while L&T down by 0.70%, Hindalco down by 0.68%, Tata Steel down by 0.45%, HDFC Bank down by 0.39% and Tata Power down by 0.30% were the major losers on the index.  

 Meanwhile, in light of deteriorating global economic environment, Private Equity (PE) investments in India have dwindled by 35% to $1,616 million across 97 deals in the second quarter of 2012 over the same period a year ago. For the second quarter of the previous year, PE firms pumped in $2,477 million by way of 126 transactions.

A host of factors like slowing growth, depreciating currency, volatility in equity markets, elevated interest rates and a sense of 'policy paralysis' have clouded the economic sentiment domestically in the recent past. However, the prominent issue, which drew foreign investors’ flak, was the introduction of GAAR in Budget 2012 to check tax evasion, which was later deferred to April, next year.

Sector-wise, IT and IT-enabled Services (ITe’S) space took the lead during the quarter as the leader in both volume and value with 38 deals worth $ 321 million in the June quarter of this year. The space was closely followed by the energy sector, which attracted $290 million worth of investments in April-June 2012, while the healthcare sector too enticed an investment worth $243 million. Additionally, investments in the education sector recorded nearly 100 per cent growth to $71 million in April-June 2012, from $37 million in the second quarter of calendar year 2011. 

The S&P CNX Nifty is currently trading at 5,397.75, up by 34.80 points or 0.65% after trading in a range of 5399.95 and 5,367.55. There were 29 stocks advancing against 21 declines on the index.

The top gainers on the Nifty were Tata Motors up by 2.87%, Hindustan Unilever up by 1.97%, ITC up by 1.68%, Infosys by 1.58% and M&M up by 1.50%. While, Ambuja Cement by 1.12%, ACC down by 0.78%, L&T down by 0.76%, Hindalco Industries down by 0.60% and Tata Power down by 0.54% were top losers on the index.

Most of the Asian indices were trading in red ; Nikkei 225 added 0.77%, Hang Seng index surged 0.79%, Straits Times rose 0.13% , Shanghai Composite held in green by 0.01% and KLSE Composite gained 0.03%, Kospi Composite Index down 0.58% , Taiwan Weighted lost 0.30%. Jakarta Composite was not trading as Indonesian banks, the stock exchange and other financial institutions will be closed for five days, from Friday until Wednesday, due to public and Idul Fitri holidays.

European shares got off to an optimistic start; CAC 40 added 0.47%, DAX gained 0.11% and FTSE 100 rose 0.14%.