Benchmarks soar to three month’s high; Nifty cruises past 6,000 level

Benchmarks, which spurted sharply in early noon deals, is now gyrating near their 3-month high level, on account of relentless run of bulls tracing the higher capital inflows by foreign funds into the equity market. Across the board buying has helped 30-share barometer index, Sensex, gain over 150 points and trade above the crucial 19,800 level, while 50-share index, Nifty, too adding over 50 points, is cruising past the psychological 6,000 level, its highest since February 4,2013. Gains also track strong Japanese equities which scaled near five-year peak after the Standard & Poor's 500 Index closed at a record high overnight on renewed hopes of a steady US recovery.

Additionally, positive European markets opening, is also firing up all the cylinders. European equities nudged higher on Tuesday, bolstered by a crop of better than expected corporate earnings and with the German DAX index trading near its record highs. Closer home, with no losers on BSE sectoral front, stocks from defensive Fast Moving Consumer Goods and rate sensitive’s Bankex and Realty counters, are topping the gainers pack. The overall market breadth on BSE is in favour of advances which have thumped declines in the ratio of 1166:920; while 123 shares remain unchanged.

The BSE Sensex is currently trading at 19,833.96, up by 160.32 points or 0.81% after trading in a range of 19,849.31 and 19,697.33. There were 25 stocks advancing against 5 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap index were trading up by 0.50% and 0.47% respectively.

Buying witnessed was broad based, however, the top gaining sectoral indices on the BSE were, FMCG up by 1.57%, Bankex up by 1.23%, Realty up by 1.22%, Health Care up by 1.03% and Capital Goods up by 0.87%

The top gainers on the Sensex were Tata Motors up by 2.49%, Jindal Steel up by 2.26%, ITC up by 2.08%, Hero MotoCorp up by 1.99% and ICICI Bank up by 1.71%.

On the flip side, Coal India down by 1.59%, Mahindra & Mahindra down by 1.30%, Wipro down by 1.19%, Dr Reddy’s was down by 0.46% and HDFC Bank down by 0.13% were the top losers on the Sensex.

Meanwhile, in order to boost exports and bridge the widening current account deficit, the Reserve Bank of India (RBI) has suggested a slew of measures such as introduction of differential tax regime and increasing the scope of interest subsidy scheme for exporters. The central bank said ‘the global trade environment may not improve in the immediate period. Therefore, there is an urgent need to boost India’s exports so that the trade deficit is narrowed down, and CAD stays within the projected cap’.

The CAD, which is the difference between the inflow and outflow of foreign currency, had touched a record high of 6.7 per cent in the third quarter of FY13. Moreover, exports declined by 1.76 per cent to $300.6 billion in 2012-13 fiscal and the trade deficit touched an all time high of $190.91 billion for the same period.

The central bank had constituted a technical committee on services/facilities for the exporters headed by RBI Executive Director G Padmanabhan to suggest ways for improving financial support from alternative sources. In line with its objective, the committee has made recommendations relating to review of Gold Card Scheme for extension of export credit to exporters, appropriate inclusion of export finance under the priority sector lending and widening the scope of interest subvention.    

To make the tax structures more streamlined for exporters, the RBI committee said that like Singapore and Sri Lanka, which offer differential tax rates to promote exports, the government may consider offering this facility to Indian exporters. It also asked for early introduction of Goods and Services Tax (GST), since exporters incur numerous levies, such as VAT (value added tax), purchase tax, turnover tax, octroi, electricity duty, which make the Indian export pricing uncompetitive. 

Further, the committee also recommended continuation of export credit refinance policy for three years, which would provide certainty in availability of funds to the banks for managing their asset-liability positions and would also build confidence among the exporting community. It also proposes to set up a nodal agency for borrowing in foreign currency from abroad on a pool basis, and further lend to export orientated companies in India at competitive rates. 

The CNX Nifty is currently trading at 6,021.85, up by 50.80 points or 0.85% after trading in a range of 6,027.15 and 5,982.95. There were 38 stocks advancing against 11 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were IndusInd Bank up by 2.94%, DLF up by 2.56%, Tata Motors up by 2.42%, ITC up by 2.16% and Jindal Steel up by 2.08%.

On the flip side, Coal India down by 1.88%, M&M down by 1.39%, BPCL down by 0.65%, Dr Reddy’s Lab down by 0.40% and Ambuja Cement down by 0.35% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng increased 0.34%, Jakarta Composite jumped 0.70%, KLSE Composite surged 0.96%, Nikkei 225 soared 3.55, Shanghai Composite added 0.02% and Straits Times was up by 0.39%. On the flip side, KOSPI Composite declined 0.36% and Taiwan Weighted was down by 0.07%.

European markets got off to a positive start; with CAC 40 gaining 0.09%, FTSE100 advancing by 0.94% and DAX rising 0.17%.