Benchmarks make gap-up start on sanguine global cues

Buoyed by firm global cues, Indian equity markets have made a gap-up start with both the frontline gauges surpassing their crucial 5,900 (Nifty) and 19,600 (Sensex) levels. Sentiments remained up-beat after Federal Reserve Chairman Ben Bernanke declared US stimulus measures would continue. The US markets ended mostly in green overnight, while markets like Shanghai Composite, Hang Seng, Jakarta Composite and Seoul all edged higher by over two percent with Fed’s stance.

Back home, some support also came in after Indian rupee rallied to a more than one-week high and bond yields fell on Thursday on easing worries about selling by foreign investors. Buying in stocks of Jewellery exporters too supported the sentiments. Stocks like, Rajesh Exports and Shree Ganesh Jewellery edged higher on report that government is considering incentives for gold jewellery exporters hit by restrictions imposed on import of the metal to contain current account deficit. Moreover, investors are eyeing the results of Infosys, the bellwether stock of the IT index, this Friday that will kick-start the first quarter earnings season.

On the sectoral front, all the sectoral indices opened higher with the banking, metal, capital goods and public sector undertaking leading the opening gains with over two percent gains. Realty, power, technology, oil and gas, software and Auto indices were the other notable index movers in the opening trades while, there were no losers on the BSE sectoral space. The broader indices were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive there were 891 shares on the gaining side against 232 shares on the losing side while 41 shares remain unchanged.

The BSE Sensex opened at 19468.46; about 174 points higher compared to its previous closing of 19294.12 and has touched a high and a low of 19648.58 and 19468.46 respectively.

The index is currently trading at 19641.29, up by 347.17 points or 1.80%. All the 30 stock were advancing on the index.

The overall market breadth has made a strong start with 76.55 % stocks advancing against 19.93 % declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices down by 1.08% and 0.90% respectively. 

The top gaining sectoral indices on the BSE were, Bankex up by 2.55%, Metal up by 2.38%, Capital Goods up by 2.37%, PSU up by 2.00% and Realty up by 1.96%, while there were no losers on the sectoral index.

The top gainers on the Sensex were Hindalco Industries up by 3.26%, L&T up by 3.10%, Coal India up by 2.81%, Sterlite Industries up by 2.75% and ICICI Bank up by 2.67%. While there were no losers on the Sensex.

Meanwhile, in order to control the fall in rupee, the Reserve Bank of India (RBI) has imposed restriction on banks with regard to trading in currency Futures and Options (F&O) with immediate effect. The RBI move is aimed at checking the declining value of rupee which recently touched its life-time low of 61.21 per dollar on account of heavy demand for the American currency.

As per the RBI new norms, the banks have been barred from trading in currency futures and exchange traded currency options market on their own. However, be allowed to trade on behalf of their clients. It is felt that large-scale speculations on currency future movements might be adding downward pressure on the Indian currency as derivative trading on currency allows investors to take forward views on various currency pairs, including rupee-dollar.  

Market regulator, the Securities and Exchange Board of India (SEBI) also tightened the exposure norms for currency derivatives to check large scale speculations in the market. SEBI increased the margin requirement on the domestic dollar-rupee forward trade to 100% of the traded amount. In a related move, RBI met oil retailers to discuss options to ease pressure on the rupee, including accessing dollars at market rates from a special central bank window and later asked each state-run oil company to buy dollars from a single bank to check the rupee's fall.

The government is concerned over the falling rupee value and wants a harmonious relationship between the finance ministry, the RBI and SEBI so that possible coordinated steps can be taken to stem the rupee's slide.

The CNX Nifty opened at 5,894.50; about 77 points higher as compared to its previous closing of 5,816.70, and has touched a high and a low of 5,927.60 and 5,887.95 respectively.

The index is currently trading at 5,926.15, up by 109.45points or 1.88%. All the 50 stocks were advancing on the index.

The top gainers of the Nifty were Sesa Goa up by 3.46%, Bank of Baroda by 3.45%, Hindalco Industries up by 3.31%, Axis Bank up by 3.07% and Coal India up by 3.05%. While there were no losers on the Nifty.

Most of the Asian equity indices were trading in green; Shanghai Composite surged 44.94 points or 2.24% to 2,053.07, Hang Seng soared 449.18 points or 2.15% to 21,353.74, Jakarta Composite increased 109.55 points or 2.45% to 4,588.19, KLSE Composite rose 9.36 points or 0.53% to 1,778.07, Straits Times added 47.00 points or 1.47% to 3,235.04, Seoul Composite jumped 42.74 points or 2.34% to 1,866.90 and Taiwan Weighted was up by 157.97 points or 1.97% to 8,169.66.

On the flip side, Nikkei 225 was down by 80.25 points or 0.56% to 14,336.35.