Markets make gap up start tracking firm global cues

Prolonging their upward momentum for third consecutive day, key domestic bourses have made a gap up start tracking firm global cues as most of the Asian equity indices were trading in the green at this point of time as investors risk appetite returned after overnight data suggested some stabilization in the global recovery trend, particularly in the world’s top two economies, the United States and China. US markets after stabilizing in last session post Hurricane Sandy, surged sharply overnight on a series of encouraging economic reports, including a surge in consumer confidence. Technologies companies too moved higher on good jobs report.

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 18,700 and 5,650 mark respectively. Some optimism also came in after Finance Minister P Chidambaram in its meeting with top foreign institutional investors and fund managers allayed their concerns on retrospective taxation and also provided them some comfort on GAAR’s implementation. Meanwhile, Telecom stocks too aided the sentiments as stocks like Idea Cellular, Reliance Communication, MTNL and Tata Communication edged higher as the EGoM allowed the existing players to retain a maximum of 2.5 MHz in prime band spectrum of 900 MHz frequency band instead of the telecom regulator’s suggestion to switch to the 1,800 MHz band when their current licences expire, provided they pay a price which will be determined later through auction.

Moreover, steel stocks like Jindal Steel & Power, Tata Steel, SAIL, JSW Steel and Bhushan Steel all traded firmly in the early trade after Union Minister of Steel Beni Prasad Verma on November 1, 2012, said India will soon become the second largest manufacturer of steel in the world. Further, capital goods remained the top gainer on the BSE sectoral front followed by realty and power space 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 1,195 shares on the gaining side against 427 shares on the losing side while 69 shares remain unchanged.

The BSE Sensex opened at 18,692.15; about 131 points higher compared to its previous closing of 18,561.70, and has touched a high and a low of 18,749.07 and 18,687.93 respectively.

The index is currently trading at 18,710.76, up by 149.06 points or 0.80%. There were 26 stocks advancing against only 4 declines on the index.

The overall market breadth has made a strong start with 70.67% stocks advancing against 25.25% declines. The broader indices too were trading firm note; the BSE Mid cap and Small cap indices rose 0.69% and 0.79% respectively.

The top gaining sectoral indices on the BSE were, CG up by 1.65%, Realty up by 1.46%, Power up by 1.07%, Metal up by 1.00% and PSU was up by 0.95%. While, there were no losers on the index.

The top gainers on the Sensex were BHEL up by 2.07%, L&T up by 1.88%, Hero MotoCorp up by 1.82%, M&M up by 1.57% and Tata Steel was up by 1.27% while, Bharti Airtel down by 0.84%, Tata Motors down by 0.30%, HUL down by 0.23% and Sun Pharma down by 0.05% remained the few losers on the Sensex.

Meanwhile, the much mooted issue of spectrum re-farming is likely to get fixed with a final decision, in the meeting of Empowered Group of Ministers (EGoM), which would be held on Nov 1. As per the previous meeting held on October 17, the Telecom Commission had decided to take back the more efficient 900 MHz spectrum which was being used by the older telecom operators for reallocation at a later auction.

The spectrum would be taken back at the time of renewal of licenses, which is expected to begin in late 2014, and replaced with spectrum in the 1,800 MHz band. The EGoM, headed by finance minister P Chidambaram, includes external affairs minister Salman Khurshid, information and broadcasting minister Manish Tewari and law minister Ashwani Kumar.

The cabinet is also likely to meet, to approve on a number of issues that have already been passed by the EGoM, which includes the one-time fee, spectrum sharing and tweaks to the mergers and acquisitions policy. The commission’s proposal on spectrum re-farming is based on the recommendations by the internal committee as well as TRAI.

The S&P CNX Nifty opened at 5,696.35; about 51 points higher compared to its previous closing of 5,645.05, and has touched a high and a low of 5,697.70 and 5,682.55 respectively.

The index is currently trading at 5,687.95, higher by 42.90 points or 0.76%. There were 45 stocks advancing against just 5 declines on the index.

The top gainers of the Nifty were RInfra up by 2.20%, BHEL up by 2.07%, L&T up by 1.80%, JP Associates up by 1.68% and M&M up by 1.57%.

On the flip side, Bharti Airtel down by 1.21%, Tata Motors down by 0.37%, Sun Pharma down by 0.22%, HUL down by 0.17% and Maruti Suzuki down by 0.12% remained the top losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was down by 5.54 points or 0.26% to 2,098.88 and KLSE Composite declined by 7.11 points or 0.42% to 1,668.63.

On the other hand, Hang Seng surged by 276.89 points or 1.27% to 22,098.76, Jakarta Composite gained 4.17 points or 0.09% to 4,338.59, Nikkei 225 gained 100.82 points or 1.13% to 9,048.45, Straits Times was up by 18.44 points or 0.61% to 3,045.68, Kospi Composite was up by 19.72 points or 1.03% to 1,917.97 and Taiwan Weighted was up by 30.65 points or 0.41% to 7,208.06.