Resistance at higher levels pulls benchmarks from day’s high

Resistance near high points have pulled Indian equity markets a tad lower, with  Sensex coming off the 19,700 mark and Nifty moving further away from the 5,950 psychological level. Nevertheless, the trend continues to remain largely bullish in sync with global peers. Drawing cues from Asian counterparts, European shares have also got off to a fairly strong start after Federal Reserve Chairman, Ben S. Bernanke, said on Wednesday that the central bank was likely to extend the centerpiece of its campaign to bolster the economy, keeping short-term interest rates close to zero, even as it prepares to wind down another key stimulus program that faces mounting internal opposition. Closer home, global development and Rupee’s appreciation have led to across the board-rally, however profit-booking in Consumer Durable counter has started weighing on the bourses. Major gainers on BSE are stocks belonging to Metal, Banking and Realty counters. Banks have rallied on expectations of mark-to-market gains following a decline in bond yields. A rise in bond prices, which move inversely to yields, will boost the value of bond holdings of banks. Profits from trading in government bonds form a substantial part of revenue of commercial banks. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1293: 719; while 123 shares remained unchanged.

The BSE Sensex is currently trading at 19695.36, up by 401.24 points or 2.08% after trading in a range of 19723.51 and 19468.46. The broader indices too have pared some gains; the BSE Mid cap and Small cap indexes were trading higher by 1.05% and 0.73% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 3.44%, Bankex up by 2.65%, Realty up by 2.41%, Capital Goods up by 2.38% and PSU up by 2.10%, and while Consumer Durables down by 0.03% was the sole loser on the BSE sectoral space.

On the Sensex 28 stocks were advancing, while 2 were on the declining side. The top gainers on the Sensex were Hindalco Industries up by 5.35%, Sterlite Industries up by 3.70%, HDFC Bank up by 3.22%, L&T up by 2.99% and Coal India up by 2.90%. On the flip side, Wipro down by 0.33% and Cipla down by 0.20% were the only losers.

Meanwhile, in a move to boost the foreign investment into the country, Finance Minister P Chidambaram has defended Indian policies as growth oriented and urged the leaders of the US corporate sector to make substantial investments in India. Chidambaram, who is on a four-day US visit to attend the annual leadership summit of US-India Business Council, expressed the need for US companies to set up local manufacturing bases in India, saying that it is in the mutual interest of both countries for India to become a large manufacturing economy.

Finance Minister stressed that India is committed to ensure a transparent, fair and non-discriminatory investment environment for foreign investors seeking to do business in India. By adding further, Chidambaram said that steps are being taken to implement the recommendations regarding the transfer pricing and the Comprehensive Immigration Bill, which were recently passed by the US Senate. Finance Minister also emphasized Indian concerns about the provisions in the Comprehensive Immigration Reform Bill relating to skilled non-immigrant visas.

Chidambaram visit to the US came at a time when there is an increasing disappointment with Indian policies. The US lawmakers have written to Secretary of State, John Kerry and US President, Barack Obama, expressing their concerns over the Indian policies. They alleged Indian policies discriminatory, which do not provide a level playing field to the US companies.

Meanwhile, the foreign direct investment (FDI) inflows for the fiscal 2012-13 recorded a decline of 38% to $22.42 billion compared to the $35.12 billion inflow in the previous year. Foreign investment is crucial for economic development of a country and to attract foreign investment into the country, the government has been liberalizing the foreign investment policy. Finance Minister had earlier visited several major financial markets like Germany, Canada, Singapore, Hong Kong, and the UK to sell India’s growth story.

The CNX Nifty is currently trading at 5,933.45, up by 116.75 points or 2.01% after trading in a range of 5,948.85 and 5,887.95.

Of the 50 stocks index, 47 stocks were on advancing side, while 3 were declining. The top gainers of the Nifty were Hindalco Industries up by 5.35%, Sesa Goa up by 5.23%, HDFC Bank up by 3.38%, Bank of Baroda up by 3.28% and IndusInd Bank up by 3.21%. On the flip side, Ranbaxy down by 0.56%, Cipla down by 0.20% and HCL Technologies down by 0.14% were the top losers on the index.

The Asian equity indices were trading in green; Shanghai Composite surged 3.21%, Hang Seng soared 2.35%, Jakarta Composite increased 2.57%, KLSE Composite rose 0.59%, 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%.

European markets too got off to a positive start, with CAC 40 gaining 1.14%,  DAX rising 1.17 % and FTSE 100 adding 1.10%.