Markets trading near high point of day; Nifty hits new 2012 high

Indian equity markets trading near high point of the day in the late morning session on Friday amid heavy foreign fund inflows due to government’s firmness for its decision to allow FDI in multi-brand retail sector. The 30-share BSE Sensex shot up above 300 points supported by all blue chips, while 50-share NSE Nifty has touched a new 2012 high. Investors were trading cheerfully on hopes that the government will continue to come up with new reforms next week. Indian rupee recovered against US dollar on Friday, which signified that the foreign institutional investors may have bought more into equities today. Meanwhile, Indian financial companies with insurance units are trading with gains on expectations that government will increase the foreign direct investment limit to 49% from 26% in insurance companies at its next cabinet meeting. On sectoral front all were trading in green with excellent gains. In global markets, most Asian shares steadied on Friday as markets consolidated after recent sharp moves triggered by central banks' stimulus steps, with weak data giving no clear signs about the likelihood of another steep downturn in growth or a solid pickup. Back home, the market breadth favoring positive trend; there were 1,671 shares on the gaining side against 813 shares on the losing side while 104 shares remain unchanged.

The BSE Sensex is currently trading at 18,659.75 up by 310.50 points or 1.69% after touching a high of 18,666.85 and low of 18,411.20. There were 29 stocks advancing on the Sensex, while one remain unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 1.32% and Small cap index was up by 1.14%.

The top gainers on the BSE sectoral space were, Power up by 2.76%, CG up by 2.62%, Bankex up by 2.27%, Metal up by 2.17% and Realty up by 1.96%, while there was no loser on the index.

The top gainers on the Sensex were BHEL up by 4.47%, ICICI Bank up by 3.63%, Mahindra & Mahindra up by 3.45%, Sterlite Industries up by 3.13% and Tata Power up by 2.79%. On the flip side, there was no loser on the Sensex. 

Meanwhile, braving the intense political opposition and a nationwide bandh called by the opposition parties and some of its allies, the government showed its hard stand and notified the decisions taken last Friday, related to FDI in retail and aviation sectors and permitting greater foreign investment in some sections of the broadcasting sector. These notifications have given effect to the decisions taken by the Cabinet, putting an end to speculation about a possible roll back of its decisions.

Earlier, the government amid widespread protests from within and outside decided to allow 51 per cent foreign direct investment (FDI) in multi-brand retail, 100 per cent FDI in single-brand retail and 49 per cent FDI each in the civil aviation and power sectors.

After the most contentious 51% FDI in multi-brand retailing getting notification, multinational retailers such as Walmart and Carrefour can invest up to 51 per cent to open stores in 10 states and UTs which, till date, have agreed to implement the decision, as the decision comes with an enabling clause asserting that State governments/Union Territories would be free to take their own decisions in regard to implementation of the policy and is subject to the concerned State government’s approval. The policy further prohibits retail trading through e-commerce by companies with FDI engaged in multibrand retailing.

The governments’ decision has evoked angry reactions from some of its outside supporters and an ally, Trinamool Congressm, which is going to quit the UPA government. Now Prime Minister Manmohan Singh is expected to explain the nation about the reasons behind the step and the benefits it would entail, he may cite the difficult times facing the economy and may put government's stand that the step was aimed at pushing economic growth and generating employment.

The S&P CNX Nifty is currently trading at 5,659.80, up by 105.55 points or 1.90% after trading in a range of 5,660.35 and 5,575.45. All 50 stocks on the index were trading in green.

The top gainers of the Nifty were Reliance Infra up by 6.09%, BHEL up by 4.95%, JP Associates up by 4.12%, Axis Bank up by 4.08% and Sesa Goa up by 3.86%. On the flip side there was no loser on the index.

Most of the Asian indices were trading in green; Nikkei 225 up by 0.25%, Hang Seng index up by 0.75%, Taiwan Weighted up 0.35%, Shanghai Composite up by 0.31%, Straits Times up by 0.55% and Kospi Composite Index up by 0.35% while  KLSE Composite down by 0.03% and Jakarta Composite down by 0.17%  were the losers.