Strong global cues fortifies Indian benchmarks in early trade

Recovering from last session’s drubbing, key domestic bourses have made a positive start following supportive global cues. Global risk appetite improved amid reports that Spain was ready to ask for a bailout from EU, damping demand for safe-haven US Treasury prices and weighing on the dollar index. The US markets went for a rally overnight on good economic data and some strong earnings numbers while, all the Asian equity indices were trading in the green at this point of time on some positive US data and headway in the Euro zone debt crisis.

Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE’s -- Sensex -- and NSE’s -- Nifty -- to regain their crucial 18,600 and 5,650 mark respectively. The sentiments also remained higher as shares of Aviation sector like Spicejet, Jet Air India and Kingfisher Airlines edged higher on the buzz that the government has decided to abolish airport development fee (ADF) at the Delhi and Mumbai airports from January 1. Moreover, the telecom stocks viz. Idea Cellular, Bharti Airtel and RCom too edged higher as the Attorney-General Goolam E Vahanvati, the highest law official in the country has refused to give a new opinion on the EGoM decision to charge telcos fee for their existing second-generation airwaves.

Meanwhile, the country’s fourth largest software services provider HCL Technologies, beat market expectations with a 78 percent rise in Q1 consolidated net profit helped by higher contract wins. Consolidated net profit rose to Rs 885 crore compared to Rs 497 crore on a year-on-year basis. On the sectoral front, realty, healthcare, auto, technology and capital goods were trading with considerable gains in the trade while, there were no losers on the index. The broader indices too were trading on a firm note and market breadth on the BSE was strong; there were 1,068 shares on the gaining side against 551 shares on the losing side while 82 shares remain unchanged.

The BSE Sensex opened at 18,667.72; about 90 points higher compared to its previous closing of 18,577.70, and has touched a high and a low of 18,705.19 and 18,620.56 respectively.

The index is currently trading at 18,628.25, up by 50.55 points or 0.27%. There were 23 stocks advancing against 7 declines on the index.

The overall market breadth has made a strong start with 62.79% stocks advancing against 32.39% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.41% and 0.59% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 0.86%, HC up by 0.74%, Auto up by 0.57%, TECk up by 0.53% and CG up by 0.42%. While, there were no losers on the index.

The top gainers on the Sensex were Tata Power up by 1.62%, Tata Motors up by 1.16%, Bajaj Auto up by 1.09%, Wipro up by 0.81% and Bharti Airtel up by 0.80%.

On the flip side, M&M down by 0.48%, HUL down by 0.45%, HDFC Bank down by 0.27%, NTPC down by 0.15% and TCS was down by 0.12% remained the top losers on the Sensex.

Meanwhile, differing with the public interest litigation (PIL) filed by advocate M L Sharma, which accused that the centre’s decision to allow Foreign Direct Investment (FDI) in multi-brand retail is without the authority of law, the Supreme Court of India has refused to stay the policy by suggesting that irregularity for want of legal sanction can be rectified and urged RBI to amend Foreign Exchange Management Act (FEMA) regulations to allow implementation of the government's policy.

The PIL filed by lawyer M L Sharma had challenged the retail FDI policy by pointing out that the RBI's nod was missing and also claimed that it has issued the policy without the authority of law as approval of neither the President nor the Parliament was secured. Agreeing with the contention raised in the petition, the bench however noted that the RBI has already issued circular amending FDI limit, albeit it has not formally amended the regulations.

The apex court had rejected the allegation by pointing that the policy is not necessarily be in the name of the President and is never required to be placed before Parliament. The court also noted that the correctness of the norms has to be challenged on the touch stone of the circular whether it is ultra vires of the law or not.

The S&P CNX Nifty opened at 5,681.10; about 33 points higher compared to its previous closing of 5,648.00, and has touched a high and a low of 5,684.35 and 5,659.75 respectively.

The index is currently trading at 5,661.80, higher by 13.80 points or 0.24%. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were JP Associates up by 1.89%, HCL Tech up by 1.68%, Tata Power up by 1.33%, Lupin up by 1.29% and Tata Motors up by 1.24%.

On the flip side, Ambuja Cement down by 1.22%, Kotak Bank down by 0.63%, ACC down by 0.59%, M&M down by 0.53% and HUL down by 0.44% remained the top losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was up by 3.73 points or 0.18% to 2,102.54, Hang Seng surged by 201.68 points or 0.95% to 21,408.75, Jakarta Composite was up by 16.37 points or 0.38% to 4,345.62, KLSE Composite added 3.35 points or 0.21% to 1,657.04, Nikkei 225 surged by 115.57 points or 1.33% to 8,816.88, Straits Times gained 10.60 points or 0.35% to 3,058.26, Kospi Composite was up by 12.68 points or 0.67% to 1,954.34 and Taiwan Weighted gained 7.33 points or 0.10% to 7,477.67.