Indian equity continue firm trade; Nifty above 6,000 mark

Indian equity markets after touching their 3-month high level continued firm trade in the late afternoon session on account of buying in front line blue chip counters and taking cues from European counterparts. Traders were seen piling position in FMCG, Bankex and Realty sector stocks. In scrip specific development, Emami was trading in green after the company reported strong earnings in fourth quarter (January-March) and recommended a bonus issue. Allahabad Bank slipped on reporting disappointing fourth quarter (January-March) net profit which fall by 68.5% year-on-year to Rs 126 crore. On the global front, the Asian markets were trading in green barring KOSPI Composite and Taiwan Weighted while the European markets were trading on optimistic note.

Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,000 and 19,800 levels respectively. The market breadth on BSE was positive in the ratio of 1188:1028, while 128 scrips remain unchanged.

The BSE Sensex is currently trading at 19,821.52, up by 147.88 points or 0.75% after trading in a range of 19,866.70 and 19,697.33. There were 22 stocks advancing against 7 declines while 1 stock remind unchanged on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap index were trading up by 0.47% and 0.44% respectively.

Buying witnessed was broad based, however, the top gaining sectoral indices on the BSE were, FMCG up by 1.58%, Bankex up by 1.32%, Realty up by 1.06%, Consumer Durables up by 0.83% and Auto up by 0.81%

The top gainers on the Sensex were Bharti Airtel up by 2.91%, Tata Motors up by 2.65%, Hero MotoCorp up by 2.38%, Jindal Steel up by 2.19% and ITC up by 2.05%. On the flip side, Coal India down by 1.81%, Wipro down by 1.39%, Mahindra & Mahindra down by 1.34%, Dr. Reddy’s was down by 0.77% and Maruti Suzuki down by 0.38% 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 6,021.15, up by 50.10 points or 0.84% after trading in a range of 6,032.45 and 5,982.95. There were 38 stocks advancing against 10 declines while 2 stocks remained unchanged on the index.

The top gainers of the Nifty were IndusInd Bank up by 3.11%, Bharti Airtel up by 2.95%, Tata Motors up by 2.83%, DLF up by 2.54% and ITC up by 2.22%. On the flip side, Coal India down by 2.20%, M&M down by 1.48%, BPCL down by 0.93%, Dr Reddy’s Lab down by 0.65% and Ambuja Cement down by 0.54% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng increased 0.58%, Jakarta Composite jumped 0.73%, KLSE Composite surged 1.24%, Nikkei 225 soared 3.55%, Shanghai Composite added 0.20% and Straits Times was up by 0.23%. On the flip side, KOSPI Composite declined 0.36% and Taiwan Weighted was down by 0.07%.

The European markets were trading in green; France’s CAC 40 was up 0.36%, Germany’s DAX gained 0.26% and United Kingdom’s FTSE 100 edged higher by 0.24%.