Policy reforms, easing political worries help market to trade jubilantly

After striking their highest level in nearly 14 months, Indian equities pared gains but continued its firm trade in green in the late afternoon session on back of buying in frontline counters and taking cues from European counterparts. The sentiments in the market were in jubilant mood on government’s hard stand decisions taken related to FDI in retail and aviation sectors and on easing political worries. Traders were seen piling up position in Power, Capital Goods and Bankex sector while selling was witnessed in IT sector. In the scrip specific development, shares of aviation companies Kingfisher Airline, SpiceJet and Jet Airways were trading firm after the government implemented the decision to liberalize foreign investment in the sector. Maruti Suzuki was trading in green on reports that the country's largest car manufacturer is going to achieve full production by next month.

On the global front, the Asian markets were trading in green barring KLSE Composite while the European markets were trading on optimistic note. The Spanish bond auction held yesterday was a sparkling success. The Spanish Treasury was able to sell €4.8 billion ($6.3 billion) of three-year and 10-year government bonds, more than it had planned, and for a lower average yield than at previous similar auctions. On the other hand, the euro zone private sector economy contracted for the twelfth time in the past 13 months in September despite downturn easing in Germany. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,650 and 18,700 levels respectively. The market breadth on BSE was positive in the ratio of 1762:1008 while 118 scrips remain unchanged.

The BSE Sensex is currently trading at 18,753.61, up by 404.36 points or 2.20% after touching a high of 18,866.87 and low of 18,411.20. There were 26 stocks on advancing side while 4 stocks were on declining sides on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices spurted by 1.55% and 1.44% respectively.

Buying was witnessed across the space barring IT which was down by 0.35%, while the top gainers on the BSE sectoral space were, Power up by 4.63%, Capital Goods up by 4.03%, Bankex up by 4.00%, Metal up by 3.52% and PSU up by 2.61%.

The top gainers on the Sensex were BHEL up by 6.87%, Tata Power up by 5.68%, Sterlite Industries up by 4.75%, ICICI Bank up by 4.74% and SBI up by 4.72%.

Meanwhile, in continuation with UPA government’s strong string of policy reforms, the group of ministers headed by Agriculture Minister Sharad Pawar is likely to finalize on drug pricing policy proposal within next two weeks and accordingly it will be sent to the cabinet for final approval. The GoM will study pricing tactics followed by emerging countries like Mexico, South Africa, Bangladesh and Sri Lanka on essential medicines, before considering drug pricing in India.

The panel will consider pricing of essential drugs which people cannot afford. Minister of State for Chemicals and Fertilizers Srikant Jena has pointed out that the board may include nearly 348 drugs in the National List of Essential Medicines (NLEM). Currently, the centre is controlling the price of 72 bulk drugs and formulations, through the National Pharmaceutical Pricing Authority (NPPA). The GoM will also constitute of Health Minister Ghulam Nabi Azad, Minister for HRD Minister, Communications and IT, Kapil Sibal, and Planning Commission deputy chairman Montek Singh Ahluwalia, apart from Pawar, Jena and Khurshid.

The UPA government had failed to frame policy for price control of essential drugs in its previous term. Though it had circulated a draft last year, it was stuck due to differences between ministries of health and chemicals and fertilizers.

The S&P CNX Nifty is currently trading at 5,690.30, up by 136.05 points or 2.45% after trading in a range of 5,720.00 and 5,575.45. On the index, 47 stocks were on advancing side, while only 3 stocks were on declining side.

The top gainers of the Nifty were Reliance Infrastructure up by 10.83%, SAIL up by 8.44%, Axis Bank up by 7.16%, BHEL up by 7.15% and JP Associates up by 6.41%. On the flip side, TCS down by 1.07%, Sun Pharma down by 0.60% and Infosys down by 0.54% were the only losers on the index.

Most of the Asian indices were trading in green; Nikkei 225 added 0.25%, Hang Seng index surged 0.70%, Taiwan Weighted advanced 0.35%, Shanghai Composite rose 0.09%, Straits Times advanced 0.50%, and Jakarta Composite inched up 0.25% and Kospi Composite Index soared 0.60% while  KLSE Composite was down by 0.33%.

The European markets were trading in green with, France’s CAC 40 ascended 0.63%, Germany’s DAX added 0.22% and the United Kingdom’s FTSE 100 inched up 0.34%.