Local bourses speed up their momentum; Sensex at a kissing distance of 17000 level

Local equity markets are showcasing optimistic moves despite growing pessimism over European debt crisis as bourses are speeding up to reclaim their crucial psychological level i.e. Sensex-17000 mark and Nifty-51000. Cut in the Italy’s credit rating which mainly has intensified the concerns of Europe’s sovereign-debt crisis worsening has mainly dented the sentiment of Asian pacific markets. S&P lowered Italy’s credit rating from ‘A+’ to ‘A’ on concern that weaker growth and a “fragile” government mean the country won’t be able to reduce the euro-region’s second-largest debt load. However, even the US stocks tumbled on Monday as growing fears of a Greek debt default prompted investors to sell risky assets and put an end to a week-long rally on Wall Street. Meanwhile, US future indices are too showcasing a downtick in the screen trade. Back home, investor’s also drawing some positive from the Reserve Bank of India’s (RBI) deputy governor speech have taken the chance of investing into risky equities at lower levels. Reserve Bank of India’s (RBI) deputy governor Subir Gokarn said on Monday that “India faces inflation of close to 10 percent in the September-November period but price pressure should moderate from December, meaning the peak of an 18-month rate rise cycle is near”.  Although buying has been witnessed across the BSE sectoral front, but stocks from Capital Goods space remained the only weak spell. Stocks from Information Technology, TECk and Consumer Durables counters remain the one’s enticing major traction. IT stocks have become the star performers tailing the Indian currency which has fell to a 2-year low as worries over Europe's debt crisis deepened after Standard & Poor's cut Italy's rating. IT stocks lead initial upmove as rupee hits 2-year low. Both thirty share sensitive index- Sensex- and 50 share index- Nifty- are at kissing distance of 17000 and 5100 level respectively. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1411:678, while 82 shares have remained unchanged.

The BSE Sensex is currently trading at 16,919.53, up by 174.18 points or 1.04%. The index has touched a high and low of 16,959.31 and 16,758.69 respectively.  There were 25 stocks advancing against just 5 declines on the index.

The broader indices too were treading in the green; the BSE Mid cap and Small cap indices surged 0.56% and 0.79% respectively.

The top gaining sectoral indices on the BSE were, IT up by 2.43%, TECk up by 2.10%, CD up by 1.54%, Metal up by 1.19% and FMCG up by 0.96%. While, CG down by 0.16% was the lone loser on the index.

The top gainers on the Sensex were TCS up by 2.87%, Infosys up by 2.58%, Tata Motors up by 2.26%, Jindal Steel up by 1.99% and Mahindra & Mahindra up by 1.99%.

On the flip side, ONGC was down by 1.32%, BHEL down by 1.08%, Maruti Suzuki was down by 1.00%,  Jaiprakash Associate down by 0.35% and L&T down by 0.29% were the top losers on the Sensex.

Meanwhile, India is likely to support the removal of food export restrictions for humanitarian purposes during the annual meeting of International Monetary Fund (IMF) and World Bank in Washington later this week.  The move of removing food export restrictions has been recommended by the G-20. The government earlier this month had lifted a four-year-old ban on wheat exports but prohibited onion exports to control its rising price.

The Finance Minister, Pranab Mukherjee, during the G-20 finance ministers meeting on September 23-24 will discuss the issue. India has welcomed the recommendations of the Development Working Group (DWG) of the Agriculture ministerial, which talks about extraordinary taxes for food purchased apart from removal of export restrictions for humanitarian purposes by the World Food Programme.

The G-20 is also proposing a pilot programme for small, targeted, regional, emergency, humanitarian food reserves and a rapid response system under the aegis of the Food and Agriculture Organisation (FAO) to prevent food scarcity. The Development Working Group under the G-20 will also formulate an action plan on food and water security.

Another key DWG recommendation is to launch an Agricultural Market Information System (AMIS), an international information system on crop production, on the lines of JODI oil initiatives. Such a mechanism will provide accurate and timely information on crop production, stock trades and price in an effort to curb volatility.

JODI or Joint Oil Data Initiative is considered a reliable, freely accessible and comprehensive database of energy statistics. It offers a fair assessment of global oil consumption and production on a monthly basis.

The S&P CNX Nifty is currently trading at 5,083.50, higher by 51.55 points or 1.02%. The index has touched a high and low of 5,095.65 and 5,035.25 respectively.  There were 42 stocks advancing against 8 declines on the index.

The top gainers of the Nifty were TCS up by 2.85%, RCom up by 2.59%, Infosys up by 2.49%, Reliance Power up by 2.26% and HCL Technologies up by 2.09%.

On the flip side, ONGC down by 1.43%, BHEL down by 1.17%, Maruti Suzuki down by 1.02%, JP Associate down by 0.50% and L&T down by 0.30% and were the top losers on the index.

Asian equity indices were trading mixed; Shanghai Composite up by 0.41%, Hang Seng  up by 0.10% , Straits Times was up by 0.24% and Seoul Composite up by 0.56%.

On the flip side, Jakarta Composite down by 1.81%, KLSE Composite down by 0.22%, Nikkei 225 down by 1.67% and Taiwan Weighted down by 0.02%.