Benchmarks soar to day’s high; Sensex reclaims 19400 level

Barometer gauges, extending their northbound journey have climbed to day’s highest point as investors’ continue to lap up undervalued but fundamentally strong bets amid revival in global risk appetite. Additionally, rupee's appreciation on increased selling of the US currency by exporters has bolstered sentiment at D-street. Speculation that Unilever Plc will bring in capital to complete a $5.4 billion open offer to boost ownership of its Indian unit, has helped the local currency in snapping its three consecutive session's depreciating streak. Depicting exuberance, benchmark 30 share index, gaining over a percent has reclaimed its 19,400 bastion and Nifty too gaining with similar magnitude is comfortably cruising past psychological 5800 level. Broader indices, however showing degree of underperformance as compared to larger peers, are trading with gains of around half a percent.

On the global front, taking cues from mostly positive Asian counterparts, European market have got off to a positive start, bolstered by hopes for reduced political tensions in Egypt and a calming of eurozone debt angst. Meanwhile, Asian stocks rose after better-than-estimated US jobs data added to signs of recovery in the world’s largest economy, boosting the earnings outlook for exporters. The US accounted for 11 percent of India’s exports in the year ended March 2012, government data show.

Closer home, renewed interest in buying has led to across the board gains at D-Street, with prominent gainers being Fast Moving Consumer Goods, Information Technology and Consumer Durable counters. IT stocks have bounced back sharply after three days of selloff. Infosys, which reports Q1 earnings next week, gained 1 per cent. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1136:799; while 129 shares remained unchanged.

The BSE Sensex is currently trading at 19400.92, up by 223.16 points or 1.16% after trading in a range of 19405.21 and 19245.01. 

The broader indices too have added some ground; the BSE Mid cap and Small cap indexes were trading higher by 0.71% and 0.38% respectively.

The top gaining sectoral indices on the BSE were, FMCG up by 2.07%, IT up by 2.02%, TECK up by 1.84%, Consumer Durables up by 1.80% and Realty up by 1.21%, while there were no losers on the sectoral space.

Out of the 30 stocks on the Sensex, 22 stocks were trading higher, while 8 were in red. The top gainers on the Sensex were Tata Power up by 3.21%, ITC up by 2.93%, TCS up by 2.91%, L&T up by 2.29% and Bharti Airtel up by 2.12%. On the flip side, Bajaj Auto down by 1.29%, Sterlite Industries down by 1.13%, BHEL down by 1.12%, ONGC down by 0.69% and Hero MotoCorp down by 0.44% were the top losers on the Sensex.

Meanwhile, in a big sigh of relief to the non-banking financial companies (NBFCs), the Reserve Bank of India (RBI) has put on hold implementing a key directive issued last week with a proposal to have a minimum gap of six months between two successive issuances of privately-placed non-convertible debentures (NCDs) and said that it may not be operationalised immediately.

The RBI said that it is keeping the proposal on hold and will take decision on this in due course. At present, there is no restriction for NBFCs to raise funds through NCDs, which has resulted into inadequate resource planning, and higher transaction cost. Further, the central bank asked all NBFCs to prepare a policy for resource planning which should cover the planning horizon and the periodicity of private placement and get it approved from their boards by September 30.   It is expected that the move will benefit large NBFCs given their dependence on the bond market.

Last week, the apex bank issued a circular, which stated that private placement of debt should not have more than 49 investors; minimum subscription from single investor should be Rs 25 lakh and also stipulated the time frame between two NCD issuances. One of the main objectives of the restriction between two NCD issues was to promote discipline in resource planning and raising. However, the move was likely to increase borrowing costs for NBFCs and potentially create assets liability tenure mismatches.    

The CNX Nifty is currently trading at 5,838.90, up by 68.00 points or 1.18% after trading in a range of 5,842.20 and 5,787.70.

Of the 50 stocks on the Nifty, 36 stocks were advancing, 13 were declining, while 1 stock remained unchanged. The top gainers of the Nifty were HCL Tech up by 3.58%, Tata Power up by 3.39%, ITC up by 3.05%, ACC up by 3.03% and IndusInd Bank up by 3.02%.

On the flip side, BHEL down by 1.65%, Sesa Goa down by 1.01%, Bajaj-Auto down by 0.93%, ONGC down by 0.71% and Power Grid down by 0.69% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.41%, Hang Seng surged 1.32%, Jakarta Composite increased 0.33%, KLSE Composite rose 0.07%, Straits Times soared 0.85% and KOSPI Composite added 0.77%.

On the flip side, Nikkei 225 was down by 0.26% and Taiwan Weighted was down by 0.22%.