IT stocks support initial rally; Sensex recaptures 16,900 mark

The Indian equity markets witnessed flat start amid weak global but, immediately started its northward journey and garnered a gain of about a percentage point in initial trade supported by software space on the domestic front. Though, the global cues remained subdued as the US market closed lower overnight, snapping a five-session winning streak after a choppy session while, Asian market were trading on a mixed note at this point of time. Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE’s -- Sensex -- to trade comfortably over their crucial 16,900 mark. On the sectoral front, software witnessed the maximum gain in trade followed by technology and consumer durables, while there were no losers on the BSE sectoral space. The broader indices too were trading firmly at this point of time. IT space lead initial upmove as rupee hits 2-year low, stocks viz., Wipro, Infosys, TCS and HCL Tech all were trading with a gain of over two percent. The market breadth on the BSE was positive; there were 1,082 shares on the gaining side against 491 shares on the losing side while 63 shares remained unchanged.

The BSE Sensex opened at 16,768.63; about 23 points higher compared to its previous closing of 16,745.35, and has touched a high and a low of 16,909.78 and 16,758.69 respectively.

The index is currently trading at 16,909.78, up by 164.43 points or 0.98%. There were 27 stocks advancing against just 3 declines on the index.

The overall market breadth has made a strong start with 66.14% stocks advancing against 30.01% declines. The broader indices too were treading in the green; the BSE Mid cap and Small cap indices surged 0.58% and 0.46% respectively.

The top gaining sectoral indices on the BSE were, IT up by 2.17%, TECk up by 1.73%, CD up by 1.22%, Realty up by 1.05% and Bankex was up by 1.02%. While, there were no losers on the index.

The top gainers on the Sensex were Wipro up by 2.42%, Infosys up by 2.39%, Jindal Steel up by 2.25%, TCS up by 1.98% and Tata Motors was up by 1.80%.

On the flip side, Maruti Suzuki was down by 1.87%, ONGC was down by 1.30% and BHEL was down by 0.68% were the top losers on the Sensex.

Meanwhile, the Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee, on September 20, will review its decision of ban on onion exports. The EGoM on food had restricted the exports of onion, to control the prices in domestic market. The EGoM’s decision of restricting the exports of commodity has led agitation by farmers across the country. Farmers from Maharashtra, who produce around 33% of India’s total output, have stopped selling onions.

The Centre's ban on onion export will be reviewed by the EGoM on September 20. The ban came into effect on September 7 on fears that onion prices could rise, stoking food inflation further. Their inventory has increased around 14 lakh tonnes. In Nashik, the main center of India’s onion trade, the farmers’ protests has made agriculture producer market yards being shut indefinitely.

On September 17, the Finance Minister and Chief Minister of Maharashtra and other senior State Ministers met delegation of farmers from state and assured them that the central government will consider their demands. Maharashtra's Minister for Public Works Chhagan Bhujbal, after the meeting said that the farmers want the ban to be lifted immediately or the Centre should fix a minimum support price.

Farmers told Mukherjee that the sudden rise in North India was not triggered by them and they must get at least Rs 1,200 for a quintal of onion. Export ban will lead to drastic fall in prices and that would result in massive losses, Bhujbal said. By adding further he said, ‘at Rs 1,200 a quintal, farmers are not reaping huge profits; but it is enough to keep them going. If protest from farmers is continued then the prices of onion is expected to increase dramatically as onion bulbs are drying and losing up to 30% of their weight. 

The S&P CNX Nifty opened at 5,042.55; about 11 points higher compared to its previous closing of 5,031.95, and has touched a high and a low of 5,083.20 and 5,035.25 respectively.

The index is currently trading at 5,081.65, higher by 49.70 points or 0.99%. There were 43 stocks advancing against 7 declines on the index.

The top gainers of the Nifty were Wipro up by 2.60%, Infosys up by 2.30%, RCom up by 2.22%, Jindal Steel up by 2.15% and Reliance Power up by 2.01%.

On the flip side, Maruti Suzuki down by 1.95%, ONGC down by 1.41%, BHEL down by 0.64%, BPCL down by 0.39% and JP Associate down by 0.07%, were the top losers on the index.

Asian equity indices were trading mixed; Shanghai Composite was up 10.00 points or 0.41% to 2,447.80, Hang Seng was up 18.88 points or 0.10% to 18,936.83, Straits Times was up 5.09 points or 0.18% to 2,762.32 and Seoul Composite was up by 3.43 points or 0.19% to 1,824.37.

On the flip side, Jakarta Composite was down 65.21 points or 1.74% to 3,689.84, KLSE Composite was down 3.07 points or 0.22% to 1,410.05, Nikkei 225 was down 132.27 points or 1.49% to 8,731.89 and Taiwan Weighted was down by 22.26 points or 0.30% to 7,458.62.