Benchmarks exhibit enthusiastic performance; Nifty surpasses 6,000 mark

Extending the euphoria, boisterous benchmarks witnessed an enthusiastic performance on Friday by rallying over a percent and breaking many psychological levels in their northbound journey. The relentless across the board value picking ensured that the frontline indices settle comfortably above the psychological 6,000 (Nifty) and 19,950 (Sensex) levels. Sentiments remained up-beat since beginning after IT bellwether Infosys retained its US revenue guidance of 6-10% growth in dollar terms for FY14. Sentiments also remained buoyant on report that foreign institutional investors (FIIs) bought shares worth net Rs 638.26 crore on July 11, 2013. Markets, despite some sluggishness during noon deals, extended their rally in final hour of trade on the back of lower than expected trade deficit data aiding the sentiments. Trade deficit narrowed in June to $12.24 billion from a 7-month high, helped by a slowdown in gold imports, which should ease pressure on the current account balance and the beleaguered rupee.

Moreover, supportive cues from US markets provided the much needed support to local markets initially. Investors’ morale got buttressed after Federal Reserve Chairman Ben Bernanke stated that Fed policy would remain accommodative. Positive opening in European markets too supported the sentiments. CAC, DAX and FTSE all edged higher taking cues from minutes of the Federal Reserve’s latest policy meeting, showing that many members preferred the extension of the stimulus program. Though, Asian markets exhibited mixed trend with some of the indices in the region running out of steam with fresh evidence of weakness in the world's second biggest economy China.

Back home, major support came in from buying in software counter which surged by over 6% after Infosys on the consolidated basis, registered a gain of 3.71% in its net profit at Rs 2374 crore for the quarter as compared to Rs 2289 crore for the same quarter in the previous year. Total income of the company has surged by 17.36% at Rs 11844 crore for quarter under review as compared to Rs 10092 crore for the quarter ended June 30, 2012.

However some selling was witnessed in auto sector on report that domestic passenger car sales declined by 9% to 1,39,632 units in June from 1,53,450 units sold in the same month last year, on account of decline in demand for the eighth straight month due to rising ownership costs and sluggish economic growth.

The NSE’s 50-share broadly followed index Nifty jumped by over seventy points to end above the psychological 6,000 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex-- increased by over two hundred and eighty points to finish above the psychological 19,950 mark.

However, broader markets struggled to gain traction throughout the trade and ended the session on a flat note. The market breadth remained in favour of declines as there were 1076 shares on the gaining side against 1223 shares on the losing side while 148 shares remain unchanged.

Finally, the BSE Sensex surged 282.41 points or 1.44% to settle at 19,958.47, while the CNX Nifty climbed by 73.90 points or 1.25% to end at 6,009.00.

The BSE Sensex touched a high and a low of 19,991.94 and 19,785.59, respectively. The BSE Mid cap index was down by 0.13 points and Small cap index was down by 0.19%.

The top gainers on the Sensex were, Infosys up by 10.92%, Wipro up 3.34%, TCS up 2.94%, L&T up 2.72% and Dr Reddys Lab up by 2.57%, while Maruti Suzuki down by 3.58%, ONGC down 2.72%, Mahindra & Mahindra down 1.38%, Hindalco down 1.12% and ITC down by 0.95% were the top losers on the index. 

The top gainers on the BSE sectoral space were, IT up 6.46%, TECk up 5.13%, Capital Goods up 1.95%, Health Care up 1.08% and Power up 0.71%, while Consumer Durables down 0.96%, Realty down 0.58%, PSU down 0.40%, FMCG down 0.21% and Auto down 0.12% were the top losers on the sectoral space.

Meanwhile, with an aim to boost the growth of India’s infrastructure sector, the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh has approved the Modified Industrial Infrastructure Upgradation Scheme (MIIUS) with an outlay of Rs 1,030 crore during the 12th Five Year Plan period (2012-2017).

Under the MIIUS scheme, Project Management Agency (PMA) would be appointed to assist the Department of Industrial Policy and Promotion (DIPP) in appraising proposals and monitoring projects. The project proposals would be scrutinised with the help of the PMA and they would be placed before an apex committee for in-principle approval. After in-principle approval, the project will be monitored and will continue to be monitored until the project achieves completion.

Moreover, out of the total outlay under the scheme, Rs 450 crore will be used for committed liability and the remainder for taking up 14 to 16 new infrastructure upgradation projects in existing or greenfield industrial clusters.  The scheme will cover all states and at least 10 percent of the outlay will be set aside for a minimum of two projects in the North East region of the country.

The move will help to develop better common infrastructure and facilities, including skill development centres, at the selected industrial clusters. It will also positively impact better employment generation in these clusters. The government had launched an Industrial Infrastructure Upgradation Scheme (IIUS) in 2003 to enhance the industry's competitiveness by providing infrastructure through the public-private partnership model in selected functional clusters.    The CNX Nifty touched a high and low of 6,019.00 and 5,951.15 respectively. 

The top gainers on the Nifty were Infosys up 10.92%, IDFC up 3.68%, L&T up 3.39%, TCS up 2.90% and Reliance up by 2.87%.

On the flip side, the top losers of the index were, JP Associates down 3.23%, Maruti down 3.22%, ONGC down 2.66%, Ultra Tech Cement down 1.83% and Grasim down by 1.45%.

The European markets were trading in green, France’s CAC 40 up by 0.28%, the United Kingdom’s FTSE 100 up by 0.56% and Germany’s DAX up by 0.92%.

Asian markets concluded the Friday’s trade on mixed note with Japan’s Nikkei managing to close in green after the country’s central bank struck an optimistic note about the economy, using the word recover for the first time in more than two years and pointing to a pick-up in investment as well as consumer and business confidence. The Bank of Japan left its vast monetary easing program -- a huge bond-buying scheme unveiled in April -- unchanged, saying the situation for the world’s number three economy was looking up. BoJ board members slightly adjusted their growth forecasts, with their fresh median forecast at 2.8% in a range of 2.5 to 3.0% growth. Malaysia’s KLSE Composite too edged higher after the central bank kept its benchmark interest rate unchanged for a 13th straight meeting even as economic growth slows, in order to guard against risks stemming from rising household debt.

China’s Shanghai Composite closed the trade on negative note as there was some profit-taking going on since investors doubted yesterday’s rally would hold because the economic fundamentals remained weak. Chinese Finance Minister Lou Jiwei stated that his nation’s economy will fall short of its targets, saying that growth rate will likely average 7% this year. Such a result would come in below the government’s 7.5% target and would mark a slowdown from 7.7% growth reported for the first quarter of this year. The nation is due to report second-quarter GDP on Monday.

Singapore's Strait Times ended the trade on negative note despite its economy expanding faster than expected in the second quarter, this was due to a recovery in manufacturing output and an acceleration in services output. Gross domestic product rose 15.2% in the April-to-June period on a seasonally adjusted and annualized basis, compared with a 1.8% expansion in the first quarter, according to advance estimates by the Ministry of Trade and Industry. GDP expanded 0.2% from a year earlier in the first quarter. Singapore’s advance GDP estimates are computed largely from data in the first two months of the quarter. Detailed GDP estimates will be published next month.