Energized bulls continue to scale fresh highs

Energized bulls have scaled fresh highs for the day, after making a gap-up opening markets never looked back till now. Joining global celebration, benchmark equity indices, Sensex and Nifty, have puffed up gains of close to 2% and are currently trading past 19,700 and 5900 levels respectively. Broader indices too are showing good fervor and are trading up with gains of around a percent. World shares rallied after Federal Reserve Chairman Ben S. Bernanke promised to continue to stimulate the economy. Sparking hopes that tapering of the asset purchase programme may not be necessarily close, he said that highly accommodative monetary policy would be needed for the foreseeable future. Closer home, stronger local unit on easing worries about selling by foreign investors following dovish comments of Bernanke, also provided impetus to equity markets in early deals. Amidst across the board-buying, only stocks from Consumer Durables were in somber mood. The overall market breadth on BSE in the favour of advances which have outnumbered declines in the ratio of 1262: 583; while 109 shares remained unchanged.

The BSE Sensex is currently trading at 19712.09, up by 417.97 points or 2.17% after trading in a range of 19718.74 and 19468.46. All the 30 stock were advancing on the index. The broader indices were trading in green; the BSE Mid cap and Small cap indexes were trading higher by 1.10% and 0.92% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 3.79%, Bankex up by 2.83%, PSU up by 2.48%, Realty up by 2.45% and Capital Goods up by 2.31%, while Consumer Durables down by 0.32% was the sole loser on the BSE sectoral space.

The top gainers on the Sensex were Hindalco Industries up by 5.76%, Sterlite Industries up by 4.06%, Coal India up by 3.77%, HDFC Bank up by 3.55% and ONGC up by 3.07%. While there were no losers on the Sensex.

Meanwhile, the government is considering incentives for gold jewellery exporters, who have been suffering due to the restrictions imposed on gold imports to contain current account deficit (CAD), which widened to a record high The government is considering incentives for gold jewellery exporters, who have been suffering due to the restrictions imposed on gold imports to contain current account deficit (CAD), which widened to a record high to 4.8 percent of GDP in the FY13. The Jewellery exports are expected to decline considerably in the current fiscal due to limited availability of gold inventory in the domestic market with government regularly announcing measures to curb demand.

The government may go for the demand of gold jewellery exporters to increase the duty drawback rate to 8 per cent. It has already increased the duty drawback rate to 6 per cent from 4 per cent earlier. Under the duty drawback scheme, the revenue department refunds the duty incidence such as excise, customs, and service tax on the imported inputs used in the manufacture of exported goods. Further, the government is also expected to remove the restrictions on sale of gold in the domestic market.

India exported around $39 billion worth various precious gems and jewellery in the FY13. But the situation started weakening with different government measures and in May, Indian exports declined by 1.1% to $24.51 billion from $24.78 recorded in May’12 mainly due to the restriction on gold exports from Special Economic Zones (SEZ). Gold exports from SEZs in May declined by $0.8 billion, which forced the government to resume gold trading activities from SEZs, which would help reviving the gold exports.

The CNX Nifty is currently trading at 5,946.10, up by 129.40 points or 2.22% after trading in a range of 5,947.95 and 5,887.95.

Of the 50 stocks index, 49 stocks were on advancing side, the top gainers of the Nifty were Hindalco Industries up by 5.70%, Sesa Goa up by 5.34%, Coal India up by 4.16%, IndusInd Bank up by 3.87% and Bank of Baroda up by 3.83%. On the flip side, Ranbaxy down by 0.71% was the only loser on the index.

The Asian equity indices were trading in green; Shanghai Composite surged 3.92%, Hang Seng soared 2.47%, Jakarta Composite increased 2.75%, KLSE Composite rose 0.64%, Straits Times added 1.64%, Seoul Composite jumped 2.93%, Taiwan Weighted was up by 2.10% and Nikkei 225 was up by 0.39%.