Markets continue trading firm; Sensex up 245 points

Tracking positive global cues, Indian equity markets continued trading firm amid heavy buying on expectations that the government will stick to its reforms agenda and come out with positive measures to fix the fiscal gap. However, parliament got adjourned for the fourth consecutive day, as the opposition lawmakers have paralyzed the parliament, demanding rollback of the government's flagship reforms announced in September. Meanwhile, Moody's retaining India’s sovereign Baa3 ratings stable in its annual credit analysis, citing the country's large, diverse economy and strong gross domestic product growth, also supported the sentiments. In currency markets, rupee erased all early gains against dollar amid increasing month end demand for American currency by oil importers. On sectoral front, all were trading in green. Realty stocks were in demand, mirroring strong gains posted by key stocks in that space. Bank, consumer durables, FMCG, capital goods, information technology, metal and automobile stocks were also mostly trading higher. In global markets, most of the Asian shares were trading in green following positive news from Europe where the euro-zone ministers and the International Monetary Fund have reached an agreement on Greece's bailout plan. Back home, the market breadth favoring positive trend; there were 1,583 shares on the gaining side against 825 shares on the losing side while 109 shares remain unchanged.

The BSE Sensex is currently trading at 18,782.17 up by 245.16 points or 1.32% after trading in a range of 18,796.15 and 18,616.55. All 30 stocks of the index were trading in green.

The broader indices were trading in green; the BSE Mid cap index was up by 1.11% and Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were, Realty up by 2.51%, Bankex up by 1.54%, CD up by 1.46%, FMCG up by 1.40% and Metal up by 1.21%, while there was no loser on the sectoral space.

The top gainers on the Sensex were HDFC up by 2.87%, HDFC Bank up by 2.66%, Hindalco Industries up by 2.33%, Cipla up by 2.28% and Jindal Steel up by 2.27%. While, there were no losers on the index.

Meanwhile, giving some sigh of relief to the government and the telcos, the Reserve Bank of India (RBI) has relaxed overseas borrowing rules for successful bidders in the recently concluded airwaves auction, making it easier for them to raise money to pay the government.

RBI in its notification said that “The successful bidders making the upfront payment for the award of 2G spectrum initially out of rupee loans availed of from the domestic lenders would be eligible to refinance such rupee loans with a long-term ECB, under the automatic route,” also without seeking regulatory approval.

The telecom companies can further replace these short-term borrowings with long-term external (or overseas) commercial borrowings (ECB), provided the ECB is raised within a period of 18 months from the drawdown of the bridge finance.

RBI has also allowed the mobile operators to borrow from their parent companies without any limit, provided the parent owns a minimum 25 percent equity in the local company.

In the recently concluded auction the government got a lukewarm response from the operators for 1800 MHz band and received total bids worth Rs 9,407.64 crore, just one-third of the minimum Rs 28,000 crore that the government had expected. Five companies, Telenor, Vodafone, Idea Cellular, Videocon Telecommunications and Bharti Airtel bought airwaves in the recent auction. These companies are required to pay by December 1 or in installments. The RBI’s move seems to have been taken after most of the bidders opted to pay the money in installments despite having to pay a higher interest rate compared to the ECB route.

The S&P CNX Nifty is currently trading at 5,706.70, up by 70.80 points or 1.26% after trading in a range of 5,710.70 and 5,658.00. There were 48 stocks advancing against 2 declines on the index.

The top gainers of the Nifty were, JP Associate up by 4.21%, HDFC Bank up by 2.82%, HDFC up by 2.80%, BPCL up by 2.77% and Cipla up by 2.75%. On the flip side, Power Grid down by 1.37% and NTPC down by 0.22%, were only losers on the index.

Most of the Asian equity indices were trading in the green; Kospi Composite up by 0.17%, Straits Times up by 0.16%, Nikkei 225 up by 0.41%, Taiwan Weighted up by 0.31%, and Hang Seng up by 0.29%. While, Jakarta Composite  down by 0.29%, KLSE Composite down by 0.51% and Shanghai Composite was down by 0.86% were the losers.