Benchmarks extend rally for second straight day; Nifty surpasses 6,000 level

Extending their previous sessions’ rally, Indian equity indices ended the remarkable day of trade near intraday with frontline gauges surpassing their crucial 6,000 (Nifty) and 19,850 (Sensex) levels, hitting its highest level in more than 13 weeks supported by higher capital inflows by foreign funds into the equity market. The foreign institutional investors were net buyers of Rs 897 crore of stocks on May 6, 2013, taking the 2013 net buying to a total of $12.17 billion. The Indian benchmarks started the day’s trade on a positive note as sentiment remained upbeat on hopes of encouraging Index of Industrial Production (IIP) data for March to be released later this week.

The rally got extended after European counterparts opened higher on the back of strong earnings from major banks. Asian markets too exhibited encouraging trade with Japanese market hitting its highest closing level since June 2008 with exporters leading the gains while, Hong Kong shares ended at multi-week highs in choppy trade as investors braced for a slew of economic data from China that could offer fresh clues on recovery in the world's second-largest economy.

Back home, the markets up-move was also supported by government’s plan of raising Rs 20,000-crore by divesting 10% equity in Coal India, which would alone meet half of this year’s disinvestment target and is expected to be completed by September 2013. Sentiments also remained jubilant on government’s plan to unveil a new category for overseas investors called foreign portfolio investors (FPI) that do not come under the foreign direct investment (FDI) route. The FPI category is expected to include all classes of foreign investors such as NRIs, FIIs and qualified institutional investors whose investments are distinct from FDI inflows.

Some support also came in from buying in infra stocks after Planning Commission Deputy Chairman Montek Singh Ahluwalia urged multilateral development banks like the Asian Development Bank (ADB) and others to come up with innovative ways that will enable domestic debt to be raised and invested in infrastructure development in the country. However, export related stocks failed to gain traction after technical committee set up by the Reserve Bank of India recommended a cap on interest margins charged by banks lending to exporters.

The NSE’s 50-share broadly followed index Nifty rose by about seventy points to end above its psychological 6,000 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex surged by over two hundred points to finish above its psychological 19,850 mark. The broader markets too traded with traction during the session and snapped the trade with a gain of over half a percent.

The overall volumes stood at over Rs 1.47 lakh crore, which remained on the higher side as compared to that on Monday. The market breadth remained in favour of advances as there were 1,353 shares on the gaining side against 1,064 shares on the losing side, while 134 shares remain unchanged.

Finally, the BSE Sensex gained 215.31 points or 1.09% to settle at 19,888.95 while the CNX Nifty rose by 72.50 points or 1.21% to end at 6,043.55.

The BSE Sensex touched a high and a low of 19,917.88 and 19,697.33, respectively. The BSE Mid cap index up by 0.84% and Small cap index was up by 0.60%.

The top gainers on the Sensex were, Hero MotoCorp up by 3.65%, Bharti Airtel up by 3.14%, ITC up by 2.73%, Tata Motors up by 2.58% and Jindal Steel up by 2.23%, while Coal India down by 1.73%, Wipro down 1.50%, Mahindra & Mahindra down 0.61%, Maruti Suzuki down 0.07% and Tata Power down by 0.05% were the top losers on the index. 

The top gainers on the BSE Sectoral space were FMCG up 2.00%, Bankex up 1.80%, Realty up 1.40%, Auto up 1.12% and Capital Goods up 0.90%, while there was no loser on the sectoral space.

Meanwhile, seeking to develop the infrastructure sector in India, Planning Commission Deputy Chairman Montek Singh Ahluwalia has urged multilateral development banks like the Asian Development Bank (ADB) and others to come up with innovative ways that will enable domestic debt to be raised and invested in infrastructure development in the country.

While addressing an event, Ahluwalia said, India needs institutional arrangements that will mobilise all domestic savings and transform them in the long-term debt which is rupee denominated and the institutions like ADB can play a very useful role making available funds for infrastructural projects.

For the 12th Five Year Plan (2012-17), the government has set $1-trillion investment target for the infrastructure sector. India is seeking greater funding from institutions like ADB to meet its infrastructure requirement, half of which is likely to come from private players.

The CNX Nifty touched a high and a low of 6,050.50 and 5,982.95 respectively. 

The top gainers on the Nifty were Hero MotoCorp up by 3.69%, DLF up 3.35%, Axis Bank up 3.01%, Lupin up 2.95% and ITC up by 2.83%.

On the flip side, the top losers of the index were, Coal India down 1.96%, Ambuja Cement down 0.62%, HDFC down 0.57%, M&M down 0.56% and Ranbaxy down by 0.55%.

The European markets were trading in green, France’s CAC 40 up by 0.60%, the United Kingdom’s FTSE 100 up by 0.39% and Germany’s DAX up by 0.85%.

Most Asian markets closed the shutter on positive note on Tuesday, with Japanese Nikkei 225 close to five-year peak after the Standard & Poor's 500 Index closed at a record high overnight on renewed hopes for a steady US recovery. However, South Korean shares gave up early gains and went home with red mark, with automakers leading the losers. In China, Shanghai market closed higher after moving in narrow range entire day, on news report stating government will tighten rules on capital inflows. Hong Kong market ended with positive mark after recouping losses in afternoon trade amidst broad regional gains. Meanwhile, investors were also hopeful for further rate cut by the European Central Bank.