Markets remain positive amid choppy trade

Following a positive start and subsequent retreat, Indian equity markets has regained some strength to trade positive in the late morning session on Wednesday, amid alternate bouts of buying and selling. The markets were finding some support from the overhaul of rules for foreign investors, including easing registration procedures and simplifying categories. Investors’ sentiments improved with these measures, which is likely to increase foreign buying in the short-term. In currency markets, rupee was trading lower against dollar, amid increasing dollar demand from PSU banks and importers. On sectoral front, IT, capital goods and power stocks were leading, while auto and metal stocks have turned weak.

On the global front, most Asian shares rebounded from a four-day losing streak as investors’ sentiments perked up after US economic data beat expectations, even as a strong dollar pushed gold futures to two-year lows. Mainland Chinese market edged down slightly but many other regional markets climbed on Chinese central bank’s move to relieve concerns about a lingering credit squeeze in the country’s financial system. Back home, the market breadth was favoring negative trend; there were 945 shares on the losing side against 941 shares on the gaining side, while 128 shares remained unchanged.

The BSE Sensex is currently trading at 18646.67, up by 17.52 points or 0.09% after trading in a range of 18690.50 and 18584.30. There were 20 stocks advancing against 10 declines on the index.

The broader indices were trading in mixed note; the BSE Mid cap index was down by 0.15%, while the Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were, IT up by 1.50%, Power up by 1.27%, Capital Goods up by 1.05%, Realty up by 0.64% and Oil & Gas up by 0.55% while Auto down by 1.83% Metal down by 0.27% and Health Care down by 0.10% were the top losers on the BSE.

The top gainers on the Sensex were TCS up by 2.07%, Gail India up by 2.04%, NTPC up by 1.95%, L&T up by 1.67%, and Hero MotoCorp up by 1.55%.

On the flip side, Bharti Airtel was down by 5.26%, Tata Motors was down by 3.90%, Mahindra & Mahindra was down by 2.92%, Hindalco was down by 1.34% and Bajaj Auto was down by 1.21% were the top losers on the Sensex.

Meanwhile, concerned over the high capital outflow, Finance Minister P Chidambaram  has asked investors not to be overly pessimistic about the falling value of the rupee as fundamentals of the economy are intact and promised more reforms in near future to revive capital inflows into the country. Chidambaram said that $5 billion outflow from India was unfortunate following US Federal Reserve Chairman Ben Bernanke's statement of withdrawing Quantitative Easing.

By adding further, Finance Minister said that among the large emerging economies, India is the fastest growing economies next to China and money will flow back into the country as investors will find India a safe destination to invest. Replying to a question on declining value of rupee, Chidambaram said that FII outflow is the main reason for rupee depreciation, but there is no need for pessimism as this temporary phase should easily pass. Recently, the rupee touched all-time low of 59.98 to a dollar on account of high Foreign Institutional Investment (FII) outflow.

Referring to the new measures to boost economic growth, Chidambaram said that government is moving ahead on the reforms path and it will take a call on revising the FDI caps in different sectors in the second or third week of July. Further, the government is accelerating the implementation of stalled projects and more action would be taken to resolve contentious issues in the next two weeks, he added.

The CNX Nifty is currently trading at 5,618.00 up by 8.90 points or 0.16% after trading in a range of 5,635.25 and 5,600.35. There were 31 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were PowerGrid up by 2.52%, Gail up by 2.27%, NTPC up by 2.14%, Axis Bank up by 2.07% and TCS up by 2.03%.

On the flip side, Bharti Airtel down by 5.35%, Tata Motors down by 4.09%, M&M down by 3.22%, Ranbaxy down by 3.09% and Kotak Mahindra Bank down by 2.51% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng surged 1.26%, Jakarta Composite soared 2.83%, KLSE Composite rose 0.35%, Straits Times increased 0.34%, KOSPI Composite was up by 0.16% and Taiwan Weighted was up by 1.59%.

On the flip side, Shanghai Composite declined by 1.32% and Nikkei 225 dipped 1.04%.