Firm trade persists; Nifty above 5,800 mark

Indian equity markets added gains to continue their firm trade hovering near the highest point of the day in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on upbeat note after government approved doubling of domestic gas prices. Traders were seen piling positions in Metal, Power and Capital Goods stocks while selling was witnessed in IT and Consumer Durables sector stocks. In scrip specific development, private sector lender Yes Bank was trading in green after the bank’s proposal to raise Rs 2,650 crore through qualified institutional placement (QIP) from overseas has been cleared by the government. Reliance Industries, Oil and Natural Gas Corporation and Gail India were trading in green benefitting from the government’s decision to double the price of natural gas with effect from April 1, 2014. Additionally, Power and Fertiliser sectors enticed buyer after finance minister clarified that the government would consider helping the power and fertiliser industries to cope with the doubling of domestic gas prices from April 1.

On the global front, the Asian markets were trading in green while the European markets were trading on mixed note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,800 and 19,300 levels respectively. The market breadth on BSE was positive in the ratio of 1399:780, while 129 scrips remain unchanged. 

The BSE Sensex is currently trading at 19,322.20, up by 446.25 points or 2.36% after trading in a range of 19,330.68 and 19,093.18. Out of the 30 stocks on the Sensex, 27 stocks were trading higher, while 3 were in red.

The broader indices too continued to trade in fine fettle; the BSE Mid cap and Small cap indices were up by 1.56% and 1.12% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 3.98%, Power up by 3.28%, Capital Goods up by 3.21%, PSU up by 2.82%, and Bankex up by 2.63%, while IT down by 0.02% and Consumer Durables down by 0.01% were the only losers on the BSE.

The top gainers on the Sensex were Jindal Steel up by 6.18%, Coal India up by 5.80%, BHEL up by 5.73%, Tata Motors up by 4.08% and HDFC up by 4.04%. On the flip side, the losers were Hero MotoCorp down by 0.61%, Hindustan Unilever down by 0.50% and Infosys was down by 0.41%.

Meanwhile, in an 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 5,815.60, up by 133.25 points or 2.34% after trading in a range of 5,815.65 and 5,749.50.  Of the 50 stocks on the Nifty, 45 stocks were advancing, while 5 were declining.

The top gainers of the Nifty were Jindal Steel up by 6.53%, BHEL up by 5.95%, Coal India up by 5.93%, Reliance Infrastructure up by 5.30% and BPCL up by 4.73%. Meanwhile, top losers were, Ranbaxy Laboratories down by 2.49%, HCL Tech down by 2.48%, Hero MotoCorp down by 0.69%, Infosys down by 0.60% and Hindustan Unilever down by 0.48% were the major losers on the index.

The Asian equity indices were trading in green; Shanghai Composite rose 1.50%, Hang Seng surged 1.78%, Jakarta Composite soared 1.85%, KLSE Composite jumped 0.93%, Nikkei 225 zoomed 3.51%, Straits Times increased 1.23%, KOSPI Composite added 1.56% and Taiwan Weighted added by 2.26%.

The European markets were trading on a mixed note; France’s CAC 40 was down 0.34%, Germany’s DAX lost 0.05% and the United Kingdom’s FTSE 100 edged higher by 0.02%.