Markets inches higher on strong Infosys guidance

Extending their last session’s euphoria, Indian equity indices have made a gap-up opening with both the frontline indices surpassing their crucial 5,950 (Nifty) and 19,800 (Sensex) levels in Friday’s morning deals, as the sentiment turned bullish after IT bellwether Infosys left FY14 sales growth guidance in dollar terms unchanged at 6-10 per cent. Reacting to the Infosys results, the BSE IT index rose over 6 per cent to hit its fresh 52-week high. Scrips like TCS, Wipro and HCL Technology edged higher. The company, 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.

Meanwhile, bullish cues from US markets too supported the local markets as major indices there surged by over a percent overnight, extending the upward trend seen in recent weeks, shrugging off the report of unexpected rise in jobless claims during the passing week. However, Asian markets exhibiting mixed trend in morning trade 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, on the sectoral front, software witnessed the maximum gain in trade followed by technology and oil and gas, while fast moving consumer goods, consumer durables and realty remained the top losers on the BSE sectoral space. The broader indices were trading slightly in the green, while the market breadth on the BSE was positive; there were 937 shares on the gaining side against 800 shares on the losing side while 95 shares remain unchanged.

The BSE Sensex opened at 19898.69; about 222 points higher compared to its previous closing of 19676.06, and has touched a high and a low of 19962.78 and 19790.70 respectively.

The index is currently trading at 19825.90, up by 149.84 points or 0.76%. There were 10 stocks advancing against 19 declines and one stock remained unchanged on the index.

The overall market breadth has made a strong start with 49.70% stocks advancing against 45.24% declines. The broader indices were trading in green; the BSE Mid cap down by 0.01% and Small cap indices up by 0.07%. 

The top gaining sectoral indices on the BSE were, IT up by 6.30%, Teck up by 4.86%, Oil & Gas up by 0.48% and Capital Goods up by 0.01%, while FMCG down by 0.76%, Consumer Durables down by 0.74%, Realty down by 0.63%, Metal down by 0.50% and Auto down by 0.42% were the top losers on the sectoral index.

The top gainers on the Sensex were Infosys up by 11.69%, Wipro up by 2.99%, TCS up by 2.22%, RIL up by 0.93% and Bharti Airtel up by 0.92%.  On the flip side, Maruti Suzuki was down by 2.27%,  Cipla was down by 1.51%, ITC was down by 1.18%, Hero MotoCorp was down by 0.95% and Coal India was down by 0.94% were the top losers on the Sensex.

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 opened at 6,000.50; about 65 points higher as compared to its previous closing of 5,935.10, and has touched a high and a low of 6,018.40 and 5,954.45 respectively.

The index is currently trading at 5,963.65, up by 28.55 points or 0.48%. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were Infosys up by 11.64%, TCS up by 1.91%, HCL Tech up by 1.74%, IDFC up by 1.23% and Bharti Airtel up by 1.00%.

On the flip side, UltraTech Cement down by 2.53%, Maruti Suzuki down by 2.27%, Ranbaxy Laboratories down by 1.93%, Cipla down by 1.63% and IndusInd Bank down by 1.57% were the major losers on the index.

The Asian equity indices were trading mixed; Shanghai Composite declined 10.64 points or 0.51% to 2,062.35, Hang Seng contracted 83.82 points or 0.39% to 21,353.67, Straits Times dropped 17.12 points or 0.53% to 3,231.80 and Seoul Composite was down by 9.86 points or 0.53% to 1,867.74.

On the flip side, Jakarta Composite rose 0.45 points or 0.01% to 4,604.67, KLSE Composite increased 3.30 points or 0.19% to 1,784.45, Nikkei 225 gained 24.33 points or 0.17% to 14,496.91 and Taiwan Weighted was up by 2.45 points or 0.03% to 8,181.99.