Local bourses continue to trade higher in noon deals

Indian equity benchmarks continued to trade higher in noon deals with frontline gauges trading above their crucial 5,650 (Nifty) and 19,100 (Sensex) bastions buoyed by firm global cues. Recovery in Rupee too aided the sentiments. The Indian rupee was trading at 61.15 per dollar in afternoon session as against Monday’s close of 61.27 per dollar. The up-move also got support from the Reserve Bank of India’s (RBI) chief Duvvuri Subbarao’s statement that perhaps there was a need to reduce the reserves that banks have to set aside via the cash reserve or the statutory liquidity ratios. Some support also came in from report that foreign institutional investors (FIIs) bought shares worth a net Rs 408.35 crore on August 12, 2013.

Firm opening in European counterparts too supported the domestic markets with CAC, DAX and FTSE all edging higher in early deals. Rally in Asian markets boosted investors’ confidence with Japanese Nikkei trading by over two and a half percent as the yen weakened on report that Prime Minister Shinzo Abe is considering a corporate tax cut as a way to offset the impact of a planned two-stage increase in the sales tax.

Back home, Finance Minister P. Chidambaram’s statement that the government would bring down CAD to 3.7 percent of the gross domestic product (GDP) in the current financial year, aided the sentiments. On the sectoral front, realty witnessed the maximum gain in trade followed by auto and power, while metal and consumer durables remained the only losers on the BSE sectoral space. The broader indices were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive; there were 1218 shares on the gaining side against 768 shares on the losing side while 136 shares remain unchanged.

The BSE Sensex is currently trading at 19123.23, up by 176.25 points or 0.93% after trading in a range of 19156.41 and 18864.81. There were 23 stocks advancing against 7 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.85% and 0.70% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 2.68%, Auto up by 1.96%, Power up by 1.78%, Teck up by 1.65% and IT up by 1.60%. While, Metal down by 0.75%, Consumer Durables down by 0.72% were loser indices on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.47%, NTPC up by 2.82%, Wipro up by 2.37%, Bajaj Auto up by 2.30% and  Hero MotoCorp up by 2.22%. On the flip side, Hindalco Industries down by 3.95%, Coal India down by 2.08%, ONGC down by 1.30%, ITC down by 0.76% and Jindal Steel down by 0.62% were the top losers on the Sensex.

Meanwhile, in order to make special economic zones (SEZ) attractive for the investors, the government relaxed SEZ rules by notifying relaxations in the minimum area requirements and easing the exit clause for developers.

As per the new SEZ rules, minimum land requirement has been brought down from 1,000 hectares to 500 hectares for multi-product SEZ. While, for sector- specific SEZs, it has been brought down to 50 hectares. The SEZ norms for setting up of zones in north eastern states, hilly regions, Goa and Union Territories were also relaxed. There will be no minimum area required for IT SEZs but put condition for minimum built up area criteria for developers of 1 lakh square meters for the top-7 cities, 50,000 square meters for the next 15 cities and 25,000 square meters for the rest of the cities. Further, the minimum area required will be 10 hectares for SEZs to be set up exclusively for electronics hardware, agro-based food processing, biotechnology and handicrafts.

Further, the amended SEZs rules eased the exit clause for developers and now an SEZ unit may opt out of the zone by transferring its assets and liabilities to another entity by way of transfer of ownership including sale of SEZ units subjected to conditions like prior clearance from the approval committee. However, the unit will be transferred to the buyer if it is operational for a minimum period of 2 years after the commencement of production.

Meanwhile, considering the rising exports from SEZs, the government wants to increase investments in these zones by amending norms. In the previous fiscal year, exports from these zones grew by about 31 per cent year- on-year to Rs 4.76 lakh crore.

The CNX Nifty is currently trading at 5,665.45, up by 53.05 points or 0.95% after trading in a range of 5,675.55 and 5,578.90. There were 38 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were Axis Bank up by 4.21%, Ranbaxy up by 3.88%, DLF up by 3.68%, M&M up by 3.45% and NTPC up by 2.96%. On the flip side, Hindalco Industries down by 4.25%, Ambuja Cements down by 2.29%, Coal India down by 2.13%, ONGC down by 1.40% and ITC down by 0.64% were the major losers on the index.

The most of Asian equity indices were trading in green; Hang Seng up by 1.21%, Seoul Composite up by 1.50%, Straits Times up by 0.37%, Shanghai Composite up by 0.12%, Taiwan Weighted up by 1.05%, KLSE Composite up by 0.53%, Jakarta Composite up by 0.53% and Nikkei 225 was up by 2.57%.

European markets too got off to a positive start; with CAC 40 increasing 7.37 points, DAX surging 53.65 points and FTSE 100 advancing 21.52 points.