Indian equities continue firm trade; Nifty holds 5,400 mark

Indian equities after scaling fresh three-week high continued to trade firm in the late afternoon session on back of buying in frontline counters and taking clues from European counterparts. The optimism that the government will unveil a series of fiscal policy decisions later this week also boosted the market with reports suggesting that it may permit foreign direct investment in multi-brand retail and aviation. Also, advance tax data for the second installment which is due on September 15, 2012 could provide cues on the likely corporate earnings for Q2 September 2012 which may provide further direction for the market. Moreover, investors have started eyeing the two-day FOMC policy meeting that begins on September 12, 2012. Traders were seen piling up position in IT, Auto and Consumer Durable sector while selling was witnessed in Power and Health Care sector. In the scrip specific development, Jet Airways, Kingfisher Airline and SpiceJet were seen trading firm in green on reports that the government is preparing measures to potentially allow foreign investment in the aviation sector. State-run oil marketing companies HPCL, BPCL and IOC were trading under pressure after the government reportedly postponed a meeting of the Cabinet Committee on Political Affairs to consider hiking fuel prices to September 18, 2012.

On the global front, the Asian markets were trading in green barring Jakarta Composite while the European markets were trading on optimistic note. Germany’s Federal Constitutional Court is due to rule on participation in the 500 billion-euro ($640 billion) fund. Germany’s highest court stated it would rule on whether to let the nation ratify the European Stability Mechanism, rejecting a lawmaker’s appeal that it postpone the decision after the European Central Bank commits unlimited funds to buy the bonds of troubled euro-area members. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,400 and 17,900 levels respectively. The market breadth on BSE was positive in the ratio of 1409:1321 while 124 scrips remain unchanged.

The BSE Sensex is currently trading at 17,956.11, up by 103.16 points or 0.58% after touching a high of 17,969.08 and low of 17,884.96. There were 18 stocks advancing against 11 declines while one stock remain unchanged on the index.

The broader indices continue to trade in fine fettle; the BSE Mid cap index was up by 0.26% and Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were, IT up by 0.90%, Auto up by 0.88%, Consumer Durables up 0.75%, TECk up by 0.74% and FMCG up by 0.57%. While, Power down by 1.06% and Health Care down by 0.31% were top losers on the index.

The top gainers on the Sensex were Tata Motors up by 3.57%, Coal India up by 2.19%, Dr Reddy’s Laboratories up by 1.77%, Wipro up by 1.76% and TCS up by 1.64%.

On the flip side, BHEL down by 2.14%, Jindal Steel down by 2.05%, Cipla down by 1.86%, NTPC down by 1.49% and Hindalco Industries down by 1.19% were top losers on the Sensex.

Meanwhile, in an effort to achieve this fiscal’s disinvestment target of Rs 30,000 crore, M H Khan the disinvestment secretary, affirmed that eight public sector companies are likely to hit the capital market in the October-December period, provided that there are no serious derailment of the procedure. He also confirmed that companies such as,  BHEL, SAIL, Hindustan Copper, NALCO, NMDC, NTPC, Neyveli Lignite and RINL are lined up for sale of stakes, and pointed out that whichever is ready first will hit the market.

With the disinvestment process, the centre will offload at least 5% of its holding in these companies. Khan also pointed out that offer for sale (OFS) would be preferred for stake sale, if it is technically and legally possible and also expressed his confidence in achieving this year’s disinvestment target, as he emphasized that proper pricing of the stakes will always entertain investors in any market conditions.

In the previous fiscal, the centre had missed its disinvestment target of Rs 40,000 crore due to volatile market conditions and managed to accumulate only Rs 14,000 crore of which over Rs 12,000 crore was collected from selling 5% in ONGC.

The S&P CNX Nifty is currently trading at 5417.05, up by 27.05 points or 0.50% after trading in a range of 5420.45 and 5,393.95. There were 28 stocks advancing against 20 declines while 2 stocks remain unchanged on the index.

The top gainers of the Nifty were Tata Motors up by 3.54%, Coal India up by 1.96%, Wipro up by 1.88%, Asian Paints up by 1.86% and Dr Reddy’s Laboratories up by 1.75%.

On the flip side, Siemens down by 2.61%, BHEL down by 2.07%, Jindal Steel down by 1.95%, Cipla down by 1.86% and Reliance Infrastructure down by 1.68% were the major losers on the index.

Most of the Asian indices were trading in green; Nikkei 225 spurted 1.73%, KLSE Composite rose 0.01%, Kospi Composite Index surged 1.56%, Strait Times added 0.31%, Hang Seng index amassed gains of 1.10% and Taiwan Weighted advanced 1.14%, Shanghai Composite jumped by 0.28% while Jakarta Composite was trading with a drop of 0.11%.

The European markets were trading in green with, France’s CAC 40 ascended 0.76%, Germany’s DAX added 0.93% and the United Kingdom’s FTSE 100 gained 0.22%.