Benchmarks add gains to trade at highest point of the day

Indian equity markets added gains to continue firm trade hovering near the highest point of the day in the late afternoon session with both the barometer index, S&P BSE Sensex and 50-unit CNX Nifty, touching over one-week high. The recovery in Rupee aided the sentiments, whereby the domestic currency 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. Traders were seen piling position in Realty, Bankex and Auto stocks. In scrip specific development, DLF was trading firm after the company reported consolidated net profit of Rs 181 crore in Q1 June 2013, as against net loss of Rs 4 crore in Q4 March 2013. Tata Motors was trading in green on back of strong sales growth at its British luxury Jaguar Land Rover unit. The sales at JLR surged 21% year-on-year in July to 31,611 units, powered by strong Jaguar sales.

On the global front, most of the Asian markets were trading in green while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,650 and 19,100 levels respectively. The market breadth on BSE was positive in the ratio of 1300:820, while 141 scrips remain unchanged. 

The BSE Sensex is currently trading at 19182.57, up by 235.59 points or 1.24% after trading in a range of 19184.32 and 18864.81. There were 26 stocks advancing against 4 declines on the index.

The broader indices were trading in green; the BSE Mid cap and Small cap indices were trading higher by 0.97% and 0.87% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 3.09%, Bankex up by 2.31%, Auto up by 1.97%, Power up by 1.91% and IT up by 1.55%. While, there were no losing indices on the BSE.

The top gainers on the Sensex were Bajaj Auto up by 3.25%, NTPC up by 3.18%, Gail India up by 3.00%, ICICI Bank up 2.51% and HDFC Bank up by 2.43%. On the flip side, Coal India down by 2.61%, ONGC down by 1.22%, Hindalco Industries down by 0.59% and ITC down by 0.52% were the top losers on the Sensex.

Meanwhile, paving the way for clearance of held-up pharma proposals, Finance Minister P Chidambaram has said that the government will soon finalise the foreign direct investment (FDI) policy on brownfield pharmaceutical projects. Chidambaram said that the discussion between the Ministry of Commerce, Prime Minister and others regarding the FDI in brownfield pharmaceuticals is likely to take place soon and once the policy is approved, the pharmaceuticals proposals stalled by the Foreign Investment Promotion Board (FIPB) would move forward.

However, the government has expressed concern over the continuing acquisitions of Indian pharma firms by foreign companies, which would pose serious problems in availability of life-saving drugs to consumers in near future. Production of many critical drugs and medicines has been declining in India and the country is already import-dependent for intermediates and vital drugs like penicillin. Following fears that Indians will be denied cheap medicines if multinational continue to buy big companies, the government had made a distinction between greenfield and brownfield projects last year.

At present, India permits 100 per cent FDI in pharmaceutical sector through automatic approval route in the new projects but the foreign investment in the existing pharmaceutical companies are allowed only through FIPB's approval. As per the RBI data, during April 2012 and April 2013, $989 million FDI was received in brownfield investment, and a mere $87.3 million in greenfield projects. Presently, there are too many pharma proposals pending with the FIPB as several global pharma companies are looking to buy stake in existing Indian firms. Meanwhile, the Department of Industrial Policy and Promotion (DIPP) is in the process of finalising its FDI policy on brownfield pharma projects involving transfer of control.

The CNX Nifty is currently trading at 5,683.10, up by 70.70 points or 1.26% after trading in a range of 5,685.60 and 5,578.90. There were 43 stocks advancing against 6 declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Ranbaxy Laboratories up by 5.61%, Axis Bank up by 5.42%, DLF up by 4.58%, JP Associates up by 3.50% and Bajaj Auto up by 3.27%. On the flip side, Coal India down by 2.68%, Ambuja Cements down by 1.93%, ONGC down by 1.46%, Hindalco Industries down by 1.28% and ITC down by 0.48% were the major losers on the index.

Most of Asian equity indices were trading in green; Hang Seng up by 1.21%, Shanghai Composite up by 0.57%, Jakarta Composite up by 0.66%, Nikkei 225 was up by 0.89%, Seoul Composite up by 0.22%. While, Straits Times down by 1.77%, Taiwan Weighted down 0.34% and KLSE Composite down by 0.61%.

The European markets were trading in green; France’s CAC 40 was up 0.38%, Germany’s DAX added 0.86% and the United Kingdom’s FTSE 100 edged higher 0.65%.