Benchmarks make positive start on firm global cues

Buoyed by firm global cues, Indian equity indices have started the trade on a positive note with frontline gauges inching towards their crucial 5,900 (Nifty) and 19,500 (Sensex) levels. Some support also came in with President Pranab Mukherjee’s statement who has asked people not to panic by negative sentiments expressed in certain quarters. Buying in software and technology counters too added to the upside. Stocks like Infosys, TCS, Wipro and HCL Technologies edged higher after rupee dropped to a record low in early trade on Monday tracking gains in the US dollar after disappointing data from China and slightly better-than-expected US jobs data. Additionally, stocks related to FMCG space too surged as southwest monsoon hit Mumbai a day earlier than its usual date on Saturday.

Global cues remained supportive as the US markets spurted on Friday as traders reacted positively to the much awaited monthly jobs report. The Labor Department report showed that employment increased by a little more than anticipated with non-farm payroll employment increasing by 175,000 jobs in May following a downwardly revised increase of 149,000 jobs in April. While, most of the Asian equity indices were trading in green at this point of time with Japanese market rebounding from the biggest weekly drop in a year as Prime Minister Shinzo Abe, Japan revised its growth to 4.1 per cent in first quarter.

Back home, on the sectoral front, capital goods witnessed the maximum traction in trade followed by technology and auto, while healthcare, consumer durables and banking remained the top losers on the BSE sectoral space. The broader indices were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive; there were 777 shares on the gaining side against 491 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex opened at 19,530.35; about 101 points higher compared to its previous closing of 19,429.23, and has touched a high and a low of 19,585.75 and 19,473.15 respectively. The index is currently trading at 19,487.48, up by 58.25 points or 0.30%. There were 26 stocks advancing against 4 declines on the index.

The overall market breadth has made a strong start with 57.99% stocks advancing against 36.64% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices up by 0.21% and 0.33% respectively. 

The top gaining sectoral indices on the BSE were, Capital Goods up by 0.74%, Teck up by 0.66%, Auto up by 0.56%, Power up by 0.38% and PSU up by 0.25% while, Health Care down by 0.74%, Consumer Durables down by 0.51%, Bankex down by 0.26% and Realty down by 0.11% were the only loser on the sectoral index.

The top gainers on the Sensex were Wipro up by 1.61%, Bajaj Auto up by 1.29%, Mahindra & Mahindra up by 1.13%, Hero MotoCorp up by 1.04% and Infosys up by 1.02%.

On the flip side, Sun Pharma was down by 2.11%, Jindal Steel was down by 0.59%, ICICI Bank was down by 0.24% and  HDFC Bank was down by 0.07% were the top losers on the Sensex.

Meanwhile, attributing high depreciation in rupee value to rising current account deficit (CAD), the RBI Deputy Governor K C Chakrabarty said that the central bank will take necessary steps to check currency volatility. Chakrabarty said that in a high CAD and fiscal deficit scenario, rupee has to depreciate orderly and can’t expect the domestic currency to strengthen. Meanwhile, the central bank will do everything to turn down the volatility, but will not disclose its strategy. The RBI has forex reserves of over USD 290 billion to deal with the situation on the external sector. 

Recently, the rupee hit 57-level lows after 11 months on account of the high CAD, which widened due to rising gold import and high crude oil prices. Further, persistent dollar demand from importers and banks also added to the fall in rupee value. In May, India’s gold imports touched 162 tonnes, while in April, it was around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. While, the CAD widened to a record high of 6.7% in the third quarter of FY13.

Further, in a big disappointment to Indian policymakers, the recently released World Gold Council (WGC) report highlighted that India’s gold imports in April-June quarter of 2013 may increase by 200 percent y-o-y to around 300-400 tonnes, which would be almost half the imports of whole of 2012.

The CNX Nifty opened at 5,907.90; about 26 points higher as compared to its previous closing of 5,881.00, and has touched a high and a low of 5,931.65 and 5,894.90 respectively.

The index is currently trading at 5,896.25, up by 15.25 points or 0.26%. There were 35 stocks advancing against 13 declines and two stocks remain unchanged on the index.
The top gainers of the Nifty were Cairn up by 1.63%, UltraTech Cement up by 1.55%, M&M up by 1.48%, Bajaj-Auto up by 2.43% and HCL Tech up by 1.17%.

On the flip side, Sun Pharmaceuticals down by 2.20%, Kotak Mahindra Bank down by 1.66%, Sesa Goa down by 0.68%, Asian Paints down by 0.63% and IndusInd Bank down by 0.62% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 95.99 points or 0.44% to 21,671.25, KLSE Composite jumped 14.07 points or 0.79% to 1,789.66, Nikkei 225 soared 488.45 points or 3.79% to 13,365.98, Straits Times increased 21.82 points or 0.69% to 3,206.54, KOSPI Composite surged 9.84 points or 0.51% to 1,933.69 and Taiwan Weighted was up by 77.93 points or 0.96% to 8,173.13.

On the flip side, Jakarta Composite was down by 75.32 points or 1.55% to 4,790.01.

Chinese markets remained shut for trade today.