Markets continue trading in green; Sensex inches towards 18,000 level

Indian equity markets continued trading firm on the back of positive Asian cues. The BSE Sensex moving towards the 18,000 level, while the NSE Nifty towards the 5,450 level. In currency markets, Indian rupee hit a one-week high on Thursday as euro jumped to a seven-week high against US currency after the US Federal Reserve indicated it was leaning towards new economic stimulus measures. On sectoral front information technology, metal and healthcare stocks were mostly trading higher. Select consumer durables, FMCG and bank stocks were also trading firm. Oil and power and capital goods were trading mixed. Realty and automobile stocks drifted down after a firm start. In global markets, Asian shares were largely trading in green as the Federal Reserve's minutes raised the prospect for more stimulus measures. Back home, the market breadth favoring positive trend; there were 1,318 shares on the gaining side against 1,033 shares on the losing side while 157 shares remained unchanged.

The BSE Sensex is currently trading at 17,944.62, up by 97.76 points or 0.55% and touched a high and low of 17,955.20 and 17,856.29 respectively. There were 24 stocks advancing against 6 declines on the index.

The broader indices too were trading in-line with benchmarks; the BSE Mid cap and Small cap indices surged 0.41% and 0.55% respectively.

The top gaining sectoral indices on the BSE were, IT up by 1.56%, Metal up by 1.39%, HC up by 1.20%, TECk up by 1.11% and CD up by 0.64% while, CG down by 0.16%, Auto down by 0.08%, Power down 0.04% and Realty down by 0.02% remained top losers on the index.

The top gainers on the Sensex were Wipro up by 2.20%, Tata Steel up by 2.04%, TCS up by 2.01%, Cipla up by 1.87% and Jindal Steel up by 1.64%.

On the flip side, Bajaj Auto down by 0.76%, L&T down by 0.67%, ONGC down by 0.65%, Bharti Airtel down by 0.54% and Tata Motors down by 0.48% were the top losers on the Sensex.

Meanwhile, in a move to allow easier cheap dollar funding, Finance Ministry has decided to further ease the norms for raising external commercial borrowing (ECBs) by domestic firms, particularly those in the realty sector. The high-level committee on ECBs, which met on Wednesday, although kept the overall window for ECBs unchanged at the current $40 billion, it allowed for the first time cash-starved micro, small and medium enterprises (MSME) to access such funds. The committee has allowed MSMEs to indirectly access such funds through Small Industries Development Bank of India (SIDBI), besides easing the refinancing norms for infrastructure and manufacturing firms. As per the new norms, the companies could now borrow up to 75% of the forex earnings of the last three years, against the earlier cap of 50%. In addition, special purpose vehicles (SPVs) of these companies incorporated over a year ago will also be eligible to tap this route to raise resources at a lower cost.

Further, the committee also has permitted eligible non-resident entities (NREs) to provide credit enhancement to the issue of rupee bonds by all Indian companies. FII’s have now been permitted to invest up to $5 billion in these bonds, which stays well within the overall corporate bond limit of $45 billion. The minimum maturity period of such bonds has been reduced to three years from the present seven years maturity period.

The rule relaxation is in backdrop of finance ministry's drive to prop up manufacturing activity and boost infrastructure construction, which are termed as engine of growth for the Indian economy. However, the finance ministry will finalize upon these liberalized norms for these borrowings in consultation with the Reserve Bank of India (RBI).

The S&P CNX Nifty is currently trading at 5,439.85, higher by 27.00 points or 0.50% and touched a high and a low of 5,443.85 and 5,424.60 respectively. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 3.61%, Tata Steel up by 2.22%, Wipro up by 2.13%, TCS up by 1.97% and Cipla up by 1.85%.

On the flip side, Power Grid down by 1.51%, Ambuja Cement down by 0.93%, ACC down by 0.76%, Bajaj Auto down by 0.73% and Reliance Infra down by 0.69%, were the major losers on the index.

Most of the Asian markets were trading in the green; Shanghai Composite was up 0.28%, Hang Seng up 1.00%, Jakarta Composite up 0.38%, Nikkei 225 up by 0.51%, Straits Times was up by 0.64%, Kospi Composite was higher by 0.38% and Taiwan Weighted up 0.11%. 

On the other hand, KLSE Composite was the lone loser, down by 0.05%.