Improving global leads yank Indian equity markets to day’s high

Improving global leads provided relief to investors and have yanked the Indian equity markets to day’s high point, consequently leading the benchmarks Sensex and Nifty, comfortably past 18,700 and 5600 psychological levels with gains of close to a percent. While Asian pacific shares have substantially pared losses, European markets have got off to a positive start, as traders were covering their bets on equities on talk of possible market calming moves in china. Earlier in the trade, Chinese shares tumbled, dragging down other Asian bourses, as worries spread that a cash squeeze could threaten China's economic growth and take the shine off an emerging US recovery.

Closer home, value buying in select pharmaceuticals stocks tracing the gains of Ranbaxy Lab also has provided the required fillip to equity markets. Ranbaxy Lab’s stock shot up over a percent after the Supreme Court dismissed a PIL against the company for manufacturing and distributing of adulterated drugs. Other pharma majors, Aurobindo Pharma and Cipla too were trading in green.  However, losses in ICICI Bank and Tata Motors shares on signs of foreign investors exiting the Indian market, are limiting the uptrend of the markets.

On the BSE sectoral front, stocks from Oil & Gas, Realty and Banking counters are the top performers of the session, while those from Consumer Durable, Information Technology and Health Care space are the laggards. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1169:796; while 125 shares remained unchanged.

The BSE Sensex is currently trading at 18731.16, up by 190.27 points or 1.03% after trading in a range of 18745.21 and 18487.30. There were 23 stocks advancing against 7 declines on the index.

The broader indices were trading in red; the BSE Mid cap and Small cap indexes were trading lower by 0.51% and 0.36% respectively.

The top gaining sectoral indices on the BSE were, Oil & Gas up by 2.20%, Realty up 1.61%, Bankex up 0.92%, Capital Goods up by 0.82% and FMCG up 0.58%, while Consumer Durables down by 0.88%, IT down by 0.29%, Health Care down by 0.08%  were the top losers on the BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.32%, ONGC up by 2.83%, HDFC Bank up by 2.82%, Reliance Industries up by 2.70% and Hindalco Industries up by 2.39%. On the flip side, Wipro down by 2.50%, Maruti Suzuki down by 1.33%, Infosys down by 0.61%, ICICI bank down by 0.48% and  Tata Motors down by 0.44% were the top losers on the Sensex.

Meanwhile, as per Prime Minister's Economic Advisory Council (PMEAC) Chairman, C Rangarajan, India’s economy is likely to grow by more than 6 percent in the current fiscal. On the other hand, the Reserve Bank has projected the economy to grow at 5.7 percent, while the Finance Ministry has forecast 6.1-6.7 percent growth in the current fiscal. 

Referring to the current account deficit (CAD), Rangarajan said that country’s CAD would be around 4.7-4.8 percent of the GDP in FY14. Further, Rangarajan expressed the need to enhance the production of dry fuel to lower reliance on imports as higher coal imports have been impacting the CAD. He said that in the recent period the coal import into the country has increased almost by 40 percent and almost touched $18 billion, which is twice the value of the import a few years ago. The imported coal may remain more costly than the domestic coal, which further increases the need for enhancing the availability of domestic coal.

By adding further, he said that increasing the domestic production of coal and making the coal available for the power sector must be the first priority. In the third quarter of FY13, CAD widened to a record high of 6.7 percent of GDP. India is running a high CAD of more than five percent of GDP and further major fall in rupee value against dollar and high gold import are also putting pressure on the CAD. The government has also taken steps to rein in CAD by raising import duty of gold to 8%. The major portion of the imports arises from import of oil which needs to be reduced by increasing exploration in the domestic region.  The CNX Nifty is currently trading at 5,641.45, up by 51.20 points or 0.92% after trading in a range of 5,647.25 and 5,570.25. There were 35 stocks advancing against 15 declines on the index.

The top gainers of the Nifty were DLF up by 3.44%, Bharti Airtel up by 3.37%, HDFC Bank up by 3.07%, IndusInd Bank up by 2.93% and ONGC up by 2.88%. On the flip side, Lupin down by 2.09%, HCL Tech down by 1.60%, NMDC down by 1.41%, Maruti Suzuki down by 1.30% and Asian Paints down by 1.00% were the major losers on the index.

Most of the Asian equity indices, although are trading in red, with lesser amount of losses; Shanghai Composite lost 0.20%, Jakarta Composite slid 0.30%, Nikkei 225 declined 0.72%, KOSPI Composite Index plunged 1.02%, KLSE Composite dropped 0.41%, and Taiwan Weighted plummeted 1.22%.  On the flip side, Hang Seng up by 0.11% and Straits Times up by 0.55%, were the gainers amongst Asian pack.

European markets have got off to a positive start; with CAC 40 adding 1.11%, DAX rising 0.96% and FTSE 100 gaining 0.80%.