Markets pare gains; sustain the uptrend

Local equity markets, despite paring gains, continue to trade in green terrain ahead of voting in Lok Sabha on a motion moved by the opposition to disallow FDI in multi-brand retail and on FEMA, on the back of persistent capital inflows from foreign funds coupled with strong Asian cues, driving bulls at D-street. In the cautious trade, Sensex, is trading above 19300, while 50 share index, Nifty, is trading above the 5850 crucial level. The broader indices, too have added gains of over half a percent each.

On the global front, Chinese stocks spurted, leading the gainers for Asian markets with Shanghai rallying off a four-year low as investors picked up financial and property stocks. Nevertheless, concerns over whether US lawmakers can break a budget impasse before year-end to avert a possible economic slump weighed on sentiment, keeping a cap. Meanwhile, European stock index futures pointed to a higher open on Wednesday, with stocks set to resume their recent rally, tracking gains in Asia after comments from China's new leader fuelled hopes for a recovery.

Closer home, stocks from Information Technology and Power remained weak dots on the chart. Software providing firms’ have crashed on the fears of Cognizant Technology Solutions Corp issuing a lower revenue growth guidance for 2013 based on compensation targets for top executives. Cognizant, in a filing to the SEC on Tuesday said its top executives will receive 100 percent of their performance-linked shares if the company achieves revenue of $8.5 billion next year, a 16 percent rise over its projected 2012 revenue. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1558:1087, while 105 shares remained unchanged.

The BSE Sensex is currently trading at 19393.68, up by 45.60 points or 0.24% after trading in a range of 19463.25 and 19,375.58. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading in green; the BSE Mid cap index and Small cap index were trading higher by 0.56% and 0.74% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 1.67%, Realty up by 1.58%, Capital Goods (GC) up by 0.89%, Auto up by 0.68% and Oil & Gas up by 0.62%, while IT down by 1.18%, TECk down by 0.92% and Power down by 0.20% were top losers on the BSE.

The top gainers on the Sensex were Sterlite Industries up by 3.97%, Hindalco up by 3.17%, Tata Motors up by 2.47%, Tata Steel up by 2.13% and SBI up by 1.55%. On the flip side, Tata Power down 2.91%, Wipro down by 2.15%, Infosys down by 1.68%, Bharti Airtel down by 1.08% and ICICI Bank down by 0.61% were the top losers on the Sensex.

Meanwhile, Government facing criticism from opposition parties on FDI in multi-brand retail has stated that it has not received any proposal from foreign retailers to set up stores in India, despite the Department of Industrial Policy and Promotion notifying 51 per cent FDI in multi-brand retail on September 14.

Through, the FEMA rules have been tabled in the Lok Sabha as the amendments to FEMA rules are required to facilitate foreign direct investment in multi-brand retail.

Government has given approval of FDI in multi brand retail with various riders and has stated that approval should be taken from the Foreign Investment Promotion Board (FIPB) for investments. Also, the foreign investor should make a minimum investment of $100 million, 50 per cent of which should be invested in “back-end infrastructure”. Also, 30 per cent of the products must be procured from small-scale (SMEs) industries.

The S&P CNX Nifty is currently trading at 5,899.20, up by 9.95 points or 0.17% after trading in a range of 5,917.80 and 5,893.75. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 3.77%, Hindalco up by 3.07%, DLF up by 2.68%, Tata Motors up by 2.36% and PNB up by 2.12%.

On the flip side, Tata Power down by 2.78%, Wipro down by 2.32%, Infosys down by 1.96%, HCL Tech down by 1.53% and Kotak Bank down by 1.20% were the top losers on the Nifty.

All the Asian markets were trading in green, Shanghai Composite advanced 2.75%, Hang Seng surged 1.80%, Jakarta Composite added 0.14%, KLSE Composite rose 0.33%, Nikkei 225 gained 0.39%, Seoul Composite soared by 0.61%, Straits Times was up by 0.46% and Taiwan Weighted accumulated 0.63%.