Equity markets shoot up to intra-day high level; Nifty reclaims 5700 bastion

Indian equity markets steadily gaining momentum have shot up to intra-day high level ahead of European markets opening, thanks to sharp upmove of index heavyweights, such as ITC, ICICI Bank, HDFC Bank, Infosys, L&T and TCS, which occupy weightage in the range of 9.5-4.5% in the 30 share barometer index, Sensex, which puffing up over a percent points, is oscillating above the 18700 mark. Similarly, the widely followed index, Nifty, on NSE too amassing gains of close to percent have reclaimed their 5700 bastion. Additionally broader indices, too accumulating further in their kitty, have soared up over 3/ 4 percent.

Local equity markets splendid gains are tracing the positive trajectory of Asian counterparts, which have rallied with the return in the risk appetite after data suggested some stabilization in the global recovery trend, particularly in the United States and China. Factory activity picked up moderately in China, which has spawned global growth in recent years, and business surveys showed other big Asian economies were slowly recovering as well, however there were mixed signals about the health of U.S. manufacturing.

Closer home, buying witnessed was broad-based, the major pockets of strength at Dalal Street emerged to be Capital Goods, Information Technology and Auto counters. Booming October sales numbers was mainly the reason behind the sharp uptick of Auto counters. Meanwhile, data which pointed global recovery trend boosted Information Technology, which derive lion share of their revenue from exports. The overall market breadth on BSE is in the favour of advances which have outnumbered declines in the ratio of 1593:952, while 952 shares remained unchanged.

The BSE Sensex is currently trading at 18772.06, up by 210.36 points or 1.13% after trading in a range of 18772.06 and 18687.93. There were 26 stocks advancing against 4 declines on the index.

The broader indices too gained additional traction; the BSE Mid cap and Small cap indices soared by 0.73% and 0.80% respectively.

Buying witnessed was broad-based, the top gaining sectoral indices on the BSE were, CG up by 1.98%, IT up by 1.71%, Auto up by 1.54%, TECk up by 1.43%, and Realty up by 1.32%.

The top gainers on the Sensex were Bajaj Auto up by 2.75%, L&T up by 2.62%, Hero MotoCorp up by 2.30%, Gail India up by 2.00% and Sterlite Industries up by 1.91% while, Bharti Airtel down by 1.03%, HUL down by 0.50%, Reliance Industries down by 0.30% and Sun Pharma down by 0.05%.

Meanwhile, deferring decision on wheat MSP in the wake of inter-ministerial differences, the Cabinet Committee on Economic Affairs (CCEA) on Thursday approved up to 20 percent hike in the minimum support price (MSP) for five rabi crops for 2013-14, as recommended by the Commission for Agriculture Costs and Prices (CACP).

As per government statement, the case of wheat would be taken for further consultation, as no decision was made due to differences between the Finance and Agriculture Ministries on the issue. The CCEA approved MSP of 5 rabi crops including barley at Rs 980 per quintal, gram at Rs 3,000 per quintal, masur at Rs 2,900 per quintal, rapeseed/mustard at Rs 3,000 per quintal and safflower at Rs 2,800 per quintal.

The Finance Ministry opined that higher wheat MSP could lead to increase in food subsidy bill and widen the fiscal deficit, would lead to rise in prices. Moreover, the CACP recommended freezing of wheat MSP at last year's level of Rs 1285 per quintal and has recommended announcing 10 percent bonus to growers in case wheat export was banned.

However, the decision to refer the issue of wheat MSP back to the CACP came hours after finance minister P Chidambaram made a fervent plea to his Cabinet colleagues to help in the government's efforts to repair public finances.  Food ministry, further, added that any hike in the MSP of wheat would further increase the food subsidy bill by anotherRs 4,000-5,000 crore. 

The S&P CNX Nifty is currently trading at 5,700.05, up by 55.00 points or 0.97% after trading in a range of 5,700.15 and 5,682.55. There were 45 stocks advancing against 5 declines on the index.

The top gainers of the Nifty were Bajaj-Auto up by 2.78%, L&T up by 2.54%, Reliance Infra up by 2.08%, Sesa Goa up by 2.06% and Hero MotoCorp up by 2.01%.

On the flip side, Bharti Airtel down by 1.12%, HUL down by 0.62%, Reliance down by 0.38%, Sun Pharma down by 0.31% and ONGC down by 0.04% were the top losers on the index.

Asian equity indices were trading mostly in the green; Kospi Composite surged 1.07%, Nikkei 225 soared 1.17%, Taiwan Weighted added 0.43%, Straits Times advanced 0.66%, Shanghai Composite lured gains of 0.60% and Hang Seng accumulated 1.42%, while Jakarta Composite declined by 0.10% and KLSE Composite lost 0.86%.