Markets hold early gains; Sensex rises more than 100 points

Following a weak start, Indian stock markets recovered well and continued trading higher in the late morning session on Friday. The Sensex was up by 111 points, while Nifty up by 28.85 points. Investors remained cautious on fears that a weakening rupee will lead foreign investors to pare positions, which will hit blue chips. In currency markets, rupee recovered against greenback on Friday amid dollar selling by exporters and some banks. On the sectoral front, key stocks from information technology, realty and healthcare sectors were surging higher on fairly strong buying support, while consumer durable stocks were trading lower. Meanwhile, India's biggest car maker Maruti Suzuki was among the top, after the company said it will shut down its plants on Friday and shares of Future Retail fell around 2.5% after the government said foreign supermarkets entering India must invest in new supply infrastructure, rather than buying existing assets.

On the global front, Asian stock markets were mostly lower while the dollar sank further against the yen on Thursday as traders nervously await the release of crucial US jobs report later in the day. Back home, the market breadth was favoring positive trend; there were 1,145 shares on the gaining side against 793 shares on the losing side, while 114 shares remain unchanged.

The BSE Sensex is currently trading at 19,631.06, up by 111.57 points or 0.57% after trading in a range of 19,642.25 and 19,424.97. There were 23 stocks advancing against 7 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57% and Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were, IT up by 1.62%, TECk up by 1.12%, Realty up by 0.89%, Health Care up by 0.79% and Capital Goods up by 0.64%, while Consumer Durables down by 0.22% was the only loser on the BSE.

The top gainers on the Sensex were Dr Reddys Lab up by 2.74%, TCS up by 2.66%, Wipro up by 1.68%, Infosys up by 1.34% and Hero MotoCorp up by 1.04%.

On the flip side, Maruti Suzuki was down by 1.02%, NTPC was down by 0.60%, Cipla was down by 0.47%, ICICI Bank was down by 0.27% and Bajaj Auto was down by 0.19% were the top losers on the Sensex.

Meanwhile, concerned over rising gold imports, Finance Minister P Chidambaram asked banks to discourage customers from buying gold. While addressing the AGM of the Indian Banks' Association (IBA), the finance minister said that banks can play significant role in dampening the enthusiasm for gold and should advise their branches not to encourage their customers to invest in or buy gold. Moreover, the RBI has already advised banks against selling gold coins, he added. Chidambaram’s statement came a day after the government raised import duty on gold to 8 percent from 6 percent. 

Gold import, which is mainly responsible for rising CAD, rose sharply after the fall in prices in the international market. India’s gold imports touched 162 tonnes in May, while in April, it was around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. Strong demand of gold has become a worrying factor for the Indian policymakers, as the country is facing a record current account deficit (CAD), which widened to 6.7% in the third quarter of FY13.

However, to curb the gold import, the government has been taking steps regularly, including raising import duty. Further, the RBI too had put in place regulations under which gold can only be imported on a consignment basis to meet the genuine demands of jewellery exporters. It has also increased margin money to 100 percent.

The CNX Nifty is currently trading at 5,950.25 up by 28.85 points or 0.49% after trading in a range of 5,951.85 and 5,886.60. There were 34 stocks advancing against 15 declines on the index, while one remains unchanged.

The top gainers of the Nifty were TCS up by 2.76%, Dr Reddy's Laboratories up by 2.49%, Lupin up by 2.20%, BPCL up by 1.45% and IDFC up by 1.25%.

On the flip side, JP Associaties down by 1.65%, UltraTech Cement down by 1.25%, Maruti Suzuki down by 0.94%, Kotak Bank down by 0.73% and Cipla down by 0.68%, were the major losers on the index.                                                 

Most of the Asian equity indices were trading in red; Shanghai Composite declined 1.09%, Hang Seng tumbled 1.43%, Jakarta Composite crumbled 1.91%, Straits Times dipped 0.11%, KOSPI Composite contracted 1.70% and Taiwan Weighted was down by 0.01%.

On the flip side, KLSE Composite was up 0.18% and Nikkei 225 up by 0.07%.