Benchmarks hold early gains; Oil & Gas, Metal, Bankex lead

Indian equities continued to trade in fine fettle on back of strong buying in frontline counters in the late morning session. On the global front, all the Asian counters were trading in the green on ECBs decision to an unlimited bond-purchase program. Back home the traders were seen piling up position in Oil & Gas, Metal and Bankex sector. RIL, ONGC, Gail India, Cairn India, BPCL and Indian Oil Corp from Oil & Gas pack were seen trading in green edging the markets higher. Tata Steel, Coal India, Jindal Steel, Sterlite Industries, Hindalco Industries and JSW Steel from Metal pack were seen trading firm in green. In the scrip specific development, Mahindra Ugine Steel trades jumped on inking pact with Mahindra Sanyo Special Steel. Tata Communications edged higher on delivering critical connectivity to Cargotec's global IT systems. Force Motors gained on plan to invest Rs 1,000 crore for products development. Mahindra Satyam rose on entering into contractual agreement to provide IT services. ONGC surged as it mulls to establish urea manufacturing facility in North Tripura .The NSE Nifty and BSE Sensex were managing to hold their psychological 5300 and 17600 levels respectively.

The market breadth on BSE was positive, in the ratio of 1641:561.

The BSE Sensex is currently trading at 17659.69 up by 313.42 points or 1.81% after touching a high of 17659.96 and low of 17575.79. All the 30 stocks on the Sensex were on advance side.

The broader indices were trading in green; the BSE Mid cap index was up by 1.19% and Small cap index was up by 1.16%.

On the BSE sectoral space, Oil & Gas up by 2.20%, Metal up by 2.18%, Bankex up by 2.04%, CG up by 1.88 and Auto up by 1.73 were the gainers. While, there was no loser on the index.

The top gainers on the Sensex were Tata Steel up by 3.92%, ICICI Bank up by 3.69%, Tata Motors up by 3.43%, RIL up by 2.60% and Sterlite Industries up by 2.45%. On the flip side, there was no loser on the Sensex. 

Meanwhile , in an effort to revive investors’ sentiment that has taken a severe hammering due to qualms over the economy and contentious tax measures, the Securities and Exchange Board of India (SEBI) plans to ease the margin requirement for foreign institutional investors (FIIs). The proposal, which is expected to be taken up for discussion in SEBI’s next board meeting, scheduled to be held as early as next week, on materializing would provide a level-playing field to FIIs in terms of collateral.

The market regulator’s measures can be seen in the light of Finance Minister P. Chidambaram’s assurance of more measures coming to play for reviving investment sentiment after the SEBI announced steps to energize the mutual fund industry.

At present, FII’s are required to submit full collateral in cash for derivatives as well as the cash segment. However, as per the eased norms, SEBI may permit foreign investors to submit domestic instruments, such as approved securities, bank guarantees, fixed deposits, government bonds and mutual funds, as collateral. Presently, domestic institutions have the leverage to place just a part of collateral in cash, as the rest can be managed in the form of shares, fixed deposits, corporate bonds and Government securities.

FIIs were earlier permitted to offer cash and foreign sovereign securities with AAA rating as collateral for their transactions in the derivative segments, but the same could not be implemented on account of custodian’s reluctance, which as part of their risk management, insist on cash, not foreign securities.

Such a move is also expected to improve forex inflow, which is significantly important as the current account deficit touched a record 4.2 per cent in 2011-12. Meanwhile, overseas investors have pumped in close to Rs 11,000 crore in the Indian stock market in August, highest in six months, amid hopes of government initiatives on policy reforms and easing of monetary policy globally.  

The S&P CNX Nifty is currently trading at 5,329.95, up by 91.55 points or 1.75% after trading in a range of 5,330.95 and 5,309.20. All the 50 stocks on the Nifty were on the advance side.

The top gainers of the Nifty were Tata Steel up by 3.77%, ICICI Bank up by 3.64%, Tata Motors up by 3.33%, JP Associates up by 2.99% and Reliance up by 2.57%. On the flip side, there was no loser on the index.

All the Asian indices were trading  in green; Nikkei 225 up by 2.06%, Hang Seng index up by 2.40%, , Taiwan Weighted up by 1.48%, Straits Times up by 0.85% ,KLSE Composite up by 0.40%, Shanghai Composite up by 4.20%, Kospi Composite Index up by 2.48% and Jakarta Composite up by 1.12% were the gainers.