Markets continue to trade jubilant on gush of positive news

‘Revival of Animal spirit’ is the term that could aptly describe the situation of current local equity markets, which showcasing bout of strength, largely seem to be on expansion spree. Gush of positive news that has taken the markets largely by surprise, includes government’s hard stand on decisions taken related to FDI in retail and aviation sectors and secondly Finance Minister’s approval for opening up of Rajeev Gandhi scheme to Mutual Funds. Moreover, the reports stating Samajwadi Party leader Mulayam Singh Yadav lending external support to the UPA government, also cheered the Indian equity markets.

However, a shot of adrenaline was provided to the already sanguine bourses after government on Friday besides extending the ambit of the Rajiv Gandhi Equity Scheme which offers tax sops to first-time retail investors to mutual funds and exchange-traded funds also announced 50% deduction on equity investment up to Rs 50,000.

30 share barometer index of Bombay Stock Exchange (BSE), Sensex, after adding over a massive 400 points, is trading above the 18700 psychological mark, while 50 share index of National Stock Exchange (NSE), Nifty, too after surpassing the 5700 mark, highest since July 26, 2011, is currently trading sub that level. Additionally, broader indices too have lured over 1% gains.  Meanwhile, on the BSE sectoral front, Bankex, Power and Capital Goods are among the shining stars. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1729:845, while 106 shares remained unchanged.

The BSE Sensex is currently trading at 18,791.61, up by 442.36 points or 2.41% after touching a high of 18,666.85 and low of 18,411.20. All the 30 stocks were on advancing side of the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices spurted by 1.62% and 1.41% respectively.

Although buying was witnessed across the space, the top gainers on the BSE sectoral space were, Bankex up by 3.96%, Power up by 3.37%, CG up by 2.99%, Metal up by 2.77% and PSU up by 2.34%.

The top gainers on the Sensex were ICICI Bank up by 5.35%, SBI up by 4.98%, BHEL up by 4.29%, Sterlite Industries up by 4.04% and Mahindra & Mahindra up by 4.02%.

Meanwhile, at a meeting that is expected to be controversial, the Comptroller and Auditor-General (CAG) led by Vinod Rai will make a presentation explaining its controversial CAG report on coal block allocations before the Murli Manohar Joshi- headed Public Accounts Committee (PAC), on Sept 21.

The first PAC meeting on the Coalgate report, which led to Parliament’s monsoon session getting washed out, is expected to be crucial one as a whole new side could be revealed in the PAC discussion about whether the Rs 1.86-lakh-crore loss estimate on account of delaying coal auctions appropriately represent the situation or whether the CAG used a soft touch.

However, disparity could emerge from the wide gap between the initial Rs 10.67-lakh-crore revenue loss estimate reported in a draft report in March 2012 and the whittled-down Rs 1.86-lakh-crore figure presented in the final report. Furthermore, after presentation by CAG team in the morning, officials of the coal ministry will face the PAC on the issue of allocations in the afternoon session of the Committee.

Moreover, back on August 23, PAC decided to examine the four latest reports of the CAG, including the one on coal block allocation. Meanwhile, the other CAG reports that are scheduled for deliberation include the ones on Delhi International Airport, Ultra Mega Power Plants and Atomic Energy Regulatory Board (AERB).

The S&P CNX Nifty is currently trading at 5,696.55, up by 142.30 points or 2.56% after trading in a range of 5720.00 and 5,575.45. 49 stocks on the index were on advancing side, while only 1 stock declined.

The top gainers of the Nifty were Reliance Infra up by 7.70%, Axis Bank up by 6.48%, JP Associates up by 6.09%, ICICI bank up by 5.19% and SBI up by 4.79%. On the flip side, HCL Technologies down by 0.13% was the sole loser on the index.

Most of the Asian indices were trading in green; Nikkei 225 added 0.25%, Hang Seng index surged 0.68%, Taiwan Weighted advanced 0.35%, Shanghai Composite rose 0.15%, Straits Times advanced 0.50% and Kospi Composite Index soared 0.60% while  KLSE Composite down by 0.08% and Jakarta Composite declined 0.17%  were the only losers amongst the Asian pacific market.

European markets started on a good note, with CAC 40 gaining 0.44%, DAX adding 0.26% and FTSE 100 advancing 0.50%.