Benchmarks showcase scintillating performance on Thursday

Extending their last session’s rally, Indian equity indices snapped Thursday’s trade near their intraday high with frontline gauges recapturing their crucial 6,000 (Nifty) and 20,100 (Sensex) bastions. Sentiments remained up-beat since beginning of the trade with leading industry bodies FICCI and CII welcoming the government’s step to raise foreign direct investment (FDI) limits in insurance, retail, telecom, defence and a host of other sectors. But, indices dipped to their intraday low level in noon deals, just managing to hold in green terrain, as market-participants, shunning the early optimism, resorted to profit-booking on account of Rupee’s weakness. Increased demand of dollar from importers amidst greenback’s strength in overseas market also weighed on the local unit, overriding the central bank’s attempt to stamp down on speculation.

Sharp up-move in last leg of trade helped the market to end near intraday high, garnering gain of about a percentage point as recovery in European markets after a cautious start supported the sentiments. Rally in oil and gas counter too supported the sentiments after the Union Petroleum and Natural Gas Minister Veerappa Moily emphasized the need for greater investment in the oil and gas sector and has said that the government is committed to deal with the energy security issues.

Meanwhile, sentiments across the globe remained up-beat after US Federal Reserve chairman Ben Bernanke suggested stimulus policies may continue for longer than expected. Though, Asian equity markets exhibited mixed trend in Thursday’s session. Japanese Nikkei share average rose to an eight-week high after Bernanke said that the timing of winding down its stimulus by the US central bank was flexible.

Back home, rally in power and fertilizer stocks too aided the sentiments as the government has decided not to divert supply of domestic gas from urea manufacturers to the fuel-starved power sector, while the empowered group of ministers (EGoM) on gas allocation will meet again on Monday to find some solution for the power sector. FMCG stocks like Hindustan Unilever, ITC, Dabur India and Godrej Consumer Products scaled record high, as a bountiful rainfall this year has prepared the ground for bumper harvest. Bounce back in rate sensitive sectors like realty and banking too supported the sentiments. Investors opted to pile up position in banking stocks after Axis Bank and Kotak Mahindra Bank reported better that expected Q1 numbers. Kotak Mahindra Bank reported 42.61% rise in its net profit at Rs 402.82 crore for the quarter as compared to Rs 282.45 crore for the same quarter in the previous year, while Axis Bank registered a surge of 22.14% in its net profit at Rs 1408.93 crore for the quarter as compared to Rs 1153.52 crore for the same quarter in the previous year.

The NSE’s 50-share broadly followed index Nifty surged by over sixty points to end above its psychological 6,000 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex soared by about one hundred and eighty points to end below its psychological 20,100 mark.

The broader markets too traded with traction and ended the session with a gain of about half a percent. The market breadth remained in favor of advances as there were 1,204 shares on the gaining side against 1,113 shares on the losing side while 169 shares remain unchanged.

Finally, the BSE Sensex surged 179.68 points or 0.90% to settle at 20128.41, while the CNX Nifty climbed by 64.75 points or 1.08 % to end at 6,038.05.

The BSE Sensex touched a high and a low of 20176.90 and 19956.20, respectively. The BSE Mid cap index was up by 0.74% and Small cap index was up by 0.24%.

The top gainers on the Sensex were, ONGC up by 4.42%, HDFC Bank up 3.22%, BHEL up 3.14%, Hindalco Industries up 2.35% and Hero MotoCorp up by 2.34%, while Mahindra & Mahindra down by 1.88%, Sterlite Industries down 1.73%,  NTPC down 0.95%, TCS down 0.82% and Bajaj Auto down by 0.67% were the top losers on the index. 

The top gainers on the BSE Sectoral space were, Realty up 2.53%, Bankex up 2.04%, Consumer Durables up 1.72%, PSU up 1.50% and Capital Goods up 1.49%, while there were no losers on the sectoral space.

Meanwhile, a day after India went for a big reform push through Foreign Direct Investments (FDI) in over a dozen sectors, the leading industry bodies FICCI and CII have welcomed the move to hike FDI limits in key areas like insurance, retail, telecom, defence and have said that it would provide the much needed boost to the Indian economy.

Federation of Indian Chambers of Commerce & Industry (FICCI) president Naina Lal Kidwai said that “We welcome this move. This was long-awaited, it showed such a broad view to make the process easier by moving from the FIPB to automatic route and the significant increases in telecom, insurance and defence sectors are indeed welcomed. This should bring FDI into the country, which will help in our current account deficit and encourage fresh investment in the country”. While, Chandrajit Banerjee, Director General of the Confederation of Indian Industry (CII), said that “It is good news for India, a very bold and a significant step” and CII welcomes the decision to liberalise sectoral FDI limits and put more sectors on the automatic route. Banerjee, however, said that it still might take time before the flow of FDI is seen in India as a result of these major policy changes.

Earlier, in a high-level meeting chaired by Prime Minister the government decided to liberalize the FDI route in 13 sectors, clearing 100 percent FDI in telecom, raising FDI in insurance to 49 percent from present 26 percent and 49 percent FDI in petroleum refining and power exchanges. The government also raised FDI in asset reconstruction companies to 100 percent from 74 percent, further up to 49 percent in stock exchanges, in courier services up to 100 percent. In tea plantation up to 49 percent through automatic route and 49-100 percent through FIPB route, while the limit was increased in credit information companies to 74 percent from 49 percent.

The CNX Nifty touched a high and low of 6,051.10 and 5,974.55 respectively. 

The top gainers on the Nifty were Reliance Infrastructure up 5.82%, ONGC up 4.85%, Asian Paint up 4.18%, Axis Bank up 4.03% and Bank Baroda up by 3.69%.

On the flip side, the top losers of the index were, HCL Tech down 1.75%, M&M down 1.52%, TCS down 1.19%, UltraTech Cement down 0.80% and NTPC down by 0.68%.

The European markets were trading in green, France’s CAC 40 up by 0.24%, the United Kingdom’s FTSE 100 up by 0.38% and Germany’s DAX up by 0.06%.

Asian markets concluded Thursday’s trade on a mixed note. China’s Shanghai Composite ended in red led by slumps in financial and property stocks, as concern lingered that Beijing won’t use stimulus to boost slowing economy. The Asian Development Bank (ADB) stated that China’s cooling economy threatens to impact growth in Southeast Asia, including Indonesia. The Manila-based lender trimmed the region’s economic growth forecast to 5.2% this year and 5.6% next year in the update to its Asian Development Outlook publication. The ADB update came one day after Beijing released a report showing China’s economy slowing for the second quarter. The bank joined the International Monetary Fund in trimming its economic growth forecast for Asia. China’s Premier Li Keqiang urged caution about rushing to change economic policy to try to revive the country’s sputtering growth, but he also signaled Beijing was prepared to take action if the economy slips too far.

The number of Chinese cities recording month-on-month home price increases fell further in June as tightening measures to rein in speculation remain in place, the National Bureau of Statistics stated. Data showed that new home prices in 38 cities registered slower month-on-month rise, an increase of 4 cities from May. Beijing's GDP rose 7.7% year on year in the first half of 2013, up 0.5% over the same period last year. The city’s GDP expanded to 911.28 billion yuan ($148 billion) in the first six months, according to data issued by Beijing's statistics bureau and the National Statistics Bureau's Beijing division.

Jakarta Composite ended the trade in green. Indonesia’s rupiah fell for a 10th day, the longest losing streak since January 2004, after the central bank stated it allowed the currency to weaken. The central bank has tried to reassure investors and appealed for calm as the rupiah fell to an almost-four-year low against the US dollar. Bank Indonesia Governor Agus Martowardojo stated that the market should not panic even though the rupiah has been trading beyond 10,000 to the dollar. Citigroup raised its 2014 current-account deficit forecast for Indonesia as the outlook for commodity prices dims and the Chinese economy slows. Japanese Nikkei rose after the yen weakened and on Federal Reserve’s Chairman comment that pace of bond purchases would hinge on US economic health.

South Korean shares fell as foreign investors turned into net sellers in six sessions despite Federal Reserve Chairman Ben Bernanke’s comments over the need for highly accommodative monetary policy. Foreigners sold a net 113.4 billion won worth of shares, shifting into net sellers in six sessions. Local institutions were net buyers, but their purchases stood merely at 400 million won. Retail investors bought shares worth 115.4 billion won, limiting the KOSPI’s further decline.