Markets soar to day’s high; strong rupee boost sentiment

Gaining further strength, barometer gauges have escalated to day’s high, as investors continue to pour in money into risky equities taking cues from the global equities. Slew of measures from government apparently have kept the trend jubilant at D-street for second consecutive session.  Benchmark indices Sensex and Nifty, rallying close to 2% are trading above the 19,200 and 5750 levels respectively, broader indices too are trading with gains of over a percent.

A positive European start has added to the bourses’ vigor, which continues to draw sense of comfort from positive regional counterparts. Asian shares edged higher to extend gains for a third day on Friday, tracking an overnight rise in global equities on easing fears of an early end to US monetary stimulus.

Closer home, Rupee’s strength across US dollar has also provided shot in the arm to the bourses. Indian currency has strengthened from its perilous 60/$ mark on persistent selling of the US currency by banks and exporters. Additionally, massive buying across Capital Goods, Metal, Power and Oil & Gas shares too have fortified strength at Indian equity markets. Shares of oil and gas companies rallied on Friday after the government approved a doubling in domestic gas prices from next April, signaling its intent to make the country's troubled energy sector more attractive for investment. Shares in the largest state producer, ONGC jumped over 5%, while Reliance Industries, which operates the country’s biggest gas block off the east coast rose over 2.5%. Additionally, Power and Fertiliser sectors enticed buyer after finance minister clarified on Friday that the government would consider helping the power and fertiliser industries to cope with the doubling of domestic gas prices from April 1. The overall market breadth on BSE remained well in the favour of advances which thumped declines in the ratio of 1358:726; while 105 shares remained unchanged.

The BSE Sensex is currently trading at 19221.07, up by 345.12 points or 1.83% after trading in a range of 19,251.35 and 19,093.18. The broader indices too continued to trade in fine fettle; the BSE Mid cap and Small cap indices were up by 1.26% and 1.04% respectively.

The top gaining sectoral indices on the BSE were, Capital Goods up by 3.28%, Metal up by 3.13%, Power up by 2.41%, PSU up by 2.38%, and Oil & Gas up by 2.29%, while Consumer Durables down by 1.03%, IT down by 0.77% and TECk down by 0.25% were the top losers on the BSE.

Out of the 30 stocks on the Sensex, 24 stocks were trading higher, while 6 were in red. The top gainers on the Sensex were BHEL up by 4.66%, Coal India up by 4.63%, Tata Motors up by 3.99%, L&T up by 3.68% and Jindal Steel up by 3.53%.  On the flip side, top losers were Infosys down by 0.88%, Hindustan Unilever down by 0.88%, Wipro was down by 0.83%, Maruti Suzuki down by 0.16%and TCS down by 0.07% were the top losers on the Sensex.

Meanwhile, in order to address concerns of the foreign retailers, the government has assured them that it will review the stringent investment conditions imposed on foreign investment in the multi-brand retail sector. The government almost nine months ago had allowed foreign investment up to 51% in multi-brand retail, but imposed many conditions on such investment, which created confusion among the foreign retailers regarding multi-brand guidelines.    

To solve issues in foreign direct investment (FDI) norms, the government held a meeting with retail industry on June 27, which was attended by both foreign and domestic retail companies, including Walmart, Tesco, Metro, Carrefour, Bharti, Aditya Birla Group, Tatas, Reliance and Pantaloon among others.

Commerce and Industry Minister Anand Sharma said that early and appropriate view will be taken on all areas of concern. He further stated that the objective of the policy is to encourage job creation, investments and benefit to the farmers and consumers and the government has sufficient space to address these concerns to bring more clarity in the FDI guidelines, adding that the commerce and industry ministry is planning to issue revised guidelines with greater clarity on issues.

Retailers sought clarifications on sourcing issue in which foreign retailer must source 30 per cent of the items that it sells in India from small industries. They also asked for a relaxation in the rules for investment in the back-end infrastructure as the current policy says that 50 per cent of first tranche of the mandatory minimum $100 million FDI must go in the back-end infrastructure and not in buying land and building.

The CNX Nifty is currently trading at 5,787.55, up by 105.20 points or 1.85% after trading in a range of 5,794.70 and 5,749.50.  Of the 50 stocks on the Nifty, 43 stocks were advancing, while 7 were declining.

The top gainers of the Nifty were BHEL up by 4.97%, Coal India up by 4.51%, NMDC up by 4.23%, Reliance Infra up by 4.16% and BPCL up by 4.06%. Meanwhile, top losers were, HCL Tech down by 2.64%, Ranbaxy down by 2.34%, Infosys down by 1.08%, Hindustan Unilever down by 0.74% and Ultra Tech Cement down by 0.30% were the major losers on the index.

The Asian equity indices were trading in green; Shanghai Composite rose 0.77%, Hang Seng surged 1.72%, Jakarta Composite soared 1.82%, KLSE Composite jumped 1.06%, Nikkei 225 zoomed 3.51%, Straits Times increased 1.23%, KOSPI Composite added 1.56% and Taiwan Weighted added by 2.26%.

European markets got off to a positive start; with CAC 40 adding 0.24%, DAX rising by 0.63% and FTSE 100 surging 1.26%.