Benchmarks hold early gains; Auto, CG leads

Indian equities continued to trade in fine fettle on back of strong buying in frontline counters in the late morning session. The Asian markets were trading in the green with Chinese market taking the lead as decline in industrial profits has again raised speculation that its central bank will take measures to support economic growth. Back home, traders were seen piling up position in Auto, CG and Realty sector, while selling was witnessed in Oil & Gas, PSU and IT sector. Tata Motors, Mahindra & Mahindra, Bajaj Auto, Hero Moto Corp, Maruti Suzuki and Bosch from Auto pack were seen trading in green edging the markets higher. L&T, Siemens, ABB, Bharat Electronics and Havells India from CG pack were seen trading firm in green. Oil & Gas majors - RIL, ONGC, Cairn India, and Indian Oil Corp were capping the markets’ gains while IT majors Infosys, Wipro and CORE Education & Technologies too were pressurizing the markets.

Meanwhile, the sentiments got some support after India made it mandatory for all foreigners to furnish a tax residency certificate of their home country to claim benefits under the double taxation avoidance agreement. However, the gains remain capped as ratings agency Moody’s Investors Service expects India’s fiscal deficit to exceed 5.1% despite the recent moves by the government to rein in deficit and has said that the recent reform measures won't improve India's credit profile and only serve as sentiment boosters, as the country is still constrained by its fiscal deficit.

In the scrip specific development, Moser Baer jumped on launching security-software loaded 4GB and 8GB pen drives. Insecticides (India) edged higher on entering into JV with Otsuka Agri Techno Co. Balmer Lawrie rose on plan to commission manufacturing plant at Navi Mumbai by 2014. Eveready Industries gained on unveiling three new rechargeable lanterns.  Tata Motors soared on plan to set up assembly facility in Mexico. SMS Pharmaceuticals surged on plan to sell Unit-VI located in Andhra Pradesh. The NSE Nifty and BSE Sensex were managing to hold their psychological 5,650 and 18,600 levels respectively. The market breadth on BSE was positive, in the ratio of 1358:792.

The BSE Sensex is currently trading at 18696.82 up by 64.65 points or 0.35% after trading in a range of 18711.62 and 18644.77. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.62% and Small cap index was up by 0.69%.

On the BSE sectoral space, Auto up by 1.13%, CG up by 1.00%, Realty up by 0.61%, FMCG up by 0.58% and HC up by 0.36% were the top gainers. While Oil & Gas down by 0.22%, PSU down by 0.17%, IT down by 0.07% and Metal down by 0.06% were the top losers.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.51%, Tata Power up by 2.29%, L&T up by 2.00%, Maruti Suzuki up by 1.43% and Jindal Steel up by 1.40%. On the other hand, BHEL down by 1.90%, Coal India down by 1.52%, Wipro down by 0.97%, Sterlite Industries down by 0.74% and Infosys down by 0.73% were the top losers on the Sensex.

 Mean while, soon after rolling out foreign direct investment (FDI) in multi-brand retail and aviation, Finance Minister P Chidambaram, continuing reforms juggernaut, has now shifted focus to insurance sector and is keen on raising the FDI cap in the sector to 49 per cent from the existing 26 per cent limit.

This move of the government, which off lately seems to be on fast forward mode on reform front, assumes significance as at the insurance summit earlier this week, Insurance Regulatory and Development Authority (IRDA) Chairman J Hari Narayan besides stressing the need for larger investments for growth of the sector also underscored that a hike in FDI limit would be welcome.

Working in speed towards this development, the Cabinet is likely to soon consider hiking the FDI limit in the sector, with finance ministry again holding a meeting with the insurance sector regulator today to deliberate upon the issues such as service tax and other tax relief measures for the industry.

Meanwhile, Finance Minister P Chidambaram already held a meeting with IRDA chairman on Sept 26 to take on board issues that could spur insurance penetration. Ways to ease investment norms to channelize more funds into the infrastructure sector, bancassurance and process of approval for opening offices in Tier-II and below towns were among the issues taken for discussion in the meeting. 

Further, in the meeting, sensing the need to increase insurance penetration and for reaching basic insurance cover to the rural areas, the ministry and the regulator also agreed upon designing insurance products with low insurance premiums and basic cover. 

The S&P CNX Nifty is currently trading at 5,683.75, up by 20.30 points or 0.36% after trading in a range of 5,685.40 and 5,665.10. There were 33 stocks advancing against 16 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Tata Power up by 2.29%, HCL Tech up by 2.27%, M&M up by 2.26%, L&T up by 2.18% and Maruti was up by 1.83%. While, BHEL down by 1.54%, SAIL down by 1.51%, Coal India down by 1.17%, Sesa Goa down by 1.17% and Reliance Infra down by 1.04% were the losers on the index.

All the Asian indices were trading in green, Shanghai Composite was up by 0.32%, Kospi Composite Index was up by 0.36%, Taiwan Weighted was up by 0.13%, Hang Seng was up by 0.68%, Nikkei 225 was up by 0.08%, Jakarta Composite was up by 0.90%, Straits Times was up by 0.53% and KLSE Composite was up 0.55% were the gainers.