Markets maintain momentum supported by regulators measures on rupee

Indian equity markets are managing to maintain their positive momentum supported by across the board buying. Investors’ sentiments improved because of the resolve shown by the regulators and policy makers to arrest the rupee’s fall. In order to rescue rupee, RBI has banned banks from proprietary trading in domestic currency futures and the exchange-traded options market, while Securities and Exchange Board of India increased the margin requirement on the domestic dollar-rupee forward trade to 100% of the traded amount, which means investors will have to shore up the full amount of the transaction at the time of the trade itself and not during settlement. On sectoral front there was all green. Meanwhile, Reliance Power surged over 3%, as its 100-mega watt Rajasthan project received carbon credits approval. Bajaj Auto stocks too rallied around 3%, on report that 600 Chakan unit workers returned to work yesterday.

On the global front, most Asian markets rebounded from the biggest slump in two weeks, and credit risk declined after Alcoa Inc. started the US earnings season with results that beat analysts’ estimates.  Back home, the market breadth was favoring positive trend; there were 1,148 shares on the gaining side against 710 shares on the losing side, while 116 shares remained unchanged.

The BSE Sensex is currently trading at 19439.38, up by 114.61 points or 0.59% after trading in a range of 19486.00 and 19399.37. There were 23 stocks advancing against 7 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.56%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.55%, Health Care up by 1.37%, Capital Goods up by 1.30%, Power up by 1.17% and Bankex up by 1.08%, while there was no loser on the BSE.

The top gainers on the Sensex were Sun Pharma up by 3.08%, Bajaj Auto up by 2.56%, BHEL up by 1.86%, HDFC Bank up by 1.82% and L&T up by 1.38%.

On the flip side, Coal India was down by 1.50%, Maruti Suzuki was down by 1.49%, Hindustan Unilever was down by 0.74%, Tata Motors was down by 0.66% and ONGC was down by 0.49% were the top losers on the Sensex.

Meanwhile, concerned over depreciating rupee and prevailing economic slowdown, Prime Minister Manmohan Singh will meet industry leaders on 29 July to discuss ways to revive the economy. The agenda will be to discuss measures to contain current account deficit (CAD) and to arrest depreciation of the rupee and further note the impact of falling rupee on trade and industry. The Indian rupee has weakened by almost 10 percent this year and hit a record low of 61.21 against the dollar on Monday. Meanwhile, the CAD widened to record 4.8 percent of GDP in FY13 and the government intends to bring it down to 4.2 per cent this financial year.    

To enhance the Indian industry output, Prime Minister will also discuss steps to accelerate skill development and the developments of industrial corridors include Delhi-Mumbai, Chennai-Bangalore and Amritsar-Delhi-Kolkata industrial corridors. Further, the meeting headed by Manmohan Singh will also discuss about the ways to boost steel production and textile exports, besides the launch of pilot project on electric and hybrid vehicles for Delhi. Meanwhile, sluggish investments and industrial growth have become concerns for the Asia's third largest economy. Indian industry production is not showing any signs of pick up even in the current fiscal, which had witnessed a sharp deceleration in growth in the last one year with growth falling to 1% in FY13. Further, the manufacturing slowdown has also affected the services sector.

The government has been taking all possible measures to pick up the economic growth. Last month, the prime minister has set an investment target of Rs 1.15 lakh crore in PPP (public private partnership) projects across infrastructure sectors in rail, port and power for the next six months to encourage the investors’ sentiment. The government has already introduced a National Manufacturing Policy that seeks to take the share of manufacturing to 25% of GDP in the next 10 years from around 14% now. The CNX Nifty is currently trading at 5,853.20 up by 41.65 points or 0.72% after trading in a range of 5,864.95 and 5,834.60. There were 40 stocks advancing against 9 declines on the index and one remained unchanged.

The top gainers of the Nifty were Sun Pharmaceuticals up by 3.10%, Bank of Baroda up by 2.50%, Bajaj Auto up by 2.33%, InduInd Bank up by 2.31% and Lupin up by 2.02%.

On the flip side, Maruti Suzuki down by 1.49%, Coal India down by 1.47%, Hindustan Unilever down by 0.77%, Tata Motors down by 0.54% and ONGC down by 0.31% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 0.28%, Hang Seng increased 0.49%, KLSE Composite jumped 0.26%, Nikkei 225 surged 2.36%, Straits Times gained 0.81%, KOSPI Composite added 0.70%and Taiwan Weighted was up by 1.08%.

On the flip side, Jakarta Composite was down by 0.51%.