Benchmarks climb to day’s high; positive European start aid

Sharp recovery in Indian currency has led to rise in buying at Indian equity markers, now the benchmark equity indices are the day’s highest point, with gains of over three-fourth of a percent. Indian currency in the intra-day trade has even breached the ‘59/$’ mark on account of increased dollar selling. Further, a positive start of European counterparts is also adding to the upside trigger for the market that has taken Nifty at a striking distance of 5900 mark and Sensex comfortably above the crucial 19550 mark. On the global front, while European counterparts have made a positive start, Asian shares continue to trade lower, as weak Chinese manufacturing data added to worries triggered by uncertainty concerning the Fed's policy. Stimulus worries resurfaced after a senior Federal Reserve official put September in focus for taking a decision on scaling back economic stimulus. Closer home, with across the board buying, only stocks from Information Technology and Technology counters are trading weak on account of Rupee’s appreciation. Otherwise, notable gainers are stocks belonging from Realty, Capital Goods and Power space. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1386:671; while 119 shares remained unchanged.

The BSE Sensex is currently trading at 19566.31, up by 170.50 points or 0.88% after trading in a range of 19588.62 and 19347.57.  The broader indices too added some ground; the BSE Mid cap and Small cap indexes were trading higher by 1.57% and 1.73% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 4.37%, Capital Goods up by 2.54%, Power up by 2.31%, Metal up by 1.80%, and Oil & Gas up by 1.59%, while IT down by 1.35% and TECk down by 0.33% on the BSE.

Out of the 30 stocks on the Sensex, 27 stocks were trading higher, while 3 were in red. The top gainers on the Sensex were L&T up by 3.10%, Sterlite Industries up by 2.99%, BHEL up by 2.90%, Bharti Airtel up by 2.85% and Jindal Steel up by 2.58%. On the flip side, TCS down by 1.74%, Infosys down by 1.35%, Bajaj Auto was down by 0.36%, ICICI Bank was down by 0.30% and ITC was down by 0.12% were the top losers on the Sensex.

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 5,890.25 up by 48.05 points or 0.82% after trading in a range of 5,896.80 and 5,822.20.

Of the 50 stocks on the Nifty, 43 stocks were advancing, while 7 were declining. The top gainers of the Nifty were JP Associates up by 3.92%, Ranbaxy up by 3.79%, DLF and Reliance Infra up by 3.78% and BHEL up by 2.81%.

On the flip side, TCS down by 1.72%, Infosys down by 1.58%, HCL Tech down by 1.09%, Bajaj-Auto down by 0.73% and M&M down by 0.44% were the major losers on the index.

Most of the Asian equity indices were trading in red; Jakarta Composite dropped 0.13%, Straits Times dipped 0.06%, KOSPI Composite contracted by 0.41%, Taiwan Weighted was down by 0.33% and KLSE Composite was trading flat with negative bias. On the flip side, Shanghai Composite added 0.81% and Nikkei 225 increased 1.28%.

European markets got off to a positive start ; with CAC 40 adding 0.49%, DAX rising 0.44% and FTSE 100 gaining 0.54%.