Markets make gap-up start; Banks bounce back

Snapping three days continuous fall, Indian equity benchmarks have made a gap-up start with frontline gauges pulling back almost a percent from the previous closing, recapturing their crucial 18,350 (Sensex) and 5,450 (Nifty) bastions. Sentiments remained jubilant after Reserve Bank of India (RBI) indicated a partial relaxation in its tight money policy by announcing slew of measures to ease liquidity, including Rs 8,000 crore bond buyback, to ensure adequate credit flow to the productive sectors. RBI also relaxed the SLR requirement by allowing banks to retain SLR holdings in Held to Maturity (HTM) bonds category at 24.5 per cent until further instructions.

However, global cues remained sluggish as the US markets ended mixed overnight with the S&P 500 and the Nasdaq managing to snap their recent losing streaks but the traders remained reluctant to take major positions ahead of the release of the minutes of the last FOMC meeting. While, most of the Asian equity indices were trading in the red at this point of time led by Japanese Nikkei, down by over half a percent on reports that Japanese government will raise the severity of the latest leak at Fukushima to a level 3 event, or a serious radiation incident.

Back home, on the sectoral front, banking witnessed the maximum gain in trade followed by consumer durables and realty, while software, technology and healthcare remained the top losers on the BSE sectoral space. The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 898 shares on the gaining side against 255 shares on the losing side while 41 shares remain unchanged.

The BSE Sensex opened at 18545.44; about 299 points higher compared to its previous closing of 19317.19, and has touched a high and a low of 18567.70 and 18378.73 respectively.

The index is currently trading at 18395.84, up by 149.80 points or 0.82%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a strong start with 75.21% stocks advancing against 21.36% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices were up by 1.40% and 1.06% respectively. 

The few gaining sectoral indices on the BSE were, Bankex up by 5.35%, Consumer Durables up by 2.49%, Realty up by 1.95%, Capital Goods up by 1.93% and PSU up by 1.38%, while IT down by 0.99%, Teck down by 0.82%, Health Care down by 0.17% and FMCG down by 0.10% were the top losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 5.86%, SBI  up by 5.12%, HDFC Bank up by 5.12%, ICICI Bank up by 3.36% and HDFC up by 3.11%. On the flip side, Coal India was down by 1.89%, Infosys was down by 1.83%, Sun Pharma was down by 1.39%,  Bharti Airtel was down by 1.38% and Dr Reddys Lab was down by 1.36% were the top losers on the Sensex.

Meanwhile, in order to boost India’s infrastructure sector, the government has cleared 28 big-ticket investment projects worth Rs 1.1 lakh cr, which have been stuck for years for want of numerous government clearances. After intensive project-wise discussions with ministries, special project monitoring group headed by cabinet secretary Ajit Seth has managed to secure these clearances for mega investment projects.

These infrastructure projects include 18 power projects with a generation capacity of 15,636 mw, four highway projects worth Rs 4,400 crore, and Rs 1,200-crore steel plant in Odisha. Further, the coal ministry has also agreed to sign fuel supply agreements for all these projects by August 31. Three railway projects in poorly connected states such as Mizoram, Assam and Chhattisgarh, with an investment outlay of over Rs 7,100 crore, have also got green signal. Moreover, the government also cleared Delhi airport aerocity project worth Rs 12,000 crore and Petroleum distillation units, being set up by Bharat Petroleum, worth Rs 1,419 crore.

The government has identified the development of infrastructure as a most crucial one to boost the economy’s growth. Recently, it has set up the Cabinet Committee on Investments (CCI) to clear the bottlenecks holding back mega infrastructure projects. However, the committee met just once a month and didn't have the bandwidth to resolve ground-level issues holding up private sector investments. Thereby, the government set up special cell, which is  meant to supplement CCI's efforts in cases where the problem can be involved by way of discussions between ministries also acts as the CCI's secretariat and has now been tasked with monitoring the progress of projects cleared earlier by CCI. Meanwhile, for the 12th Five Year Plan (2012-17), the government has set the $1-trillion investment target for the infrastructure sector.

The CNX Nifty opened at 5,494.45; about 93 points higher as compared to its previous closing of 5,401.45, and has touched a high and a low of 5,504.10 and 5,447.25 respectively.

The index is currently trading at 5,456.80, up by 55.35 points or 1.02 %. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were IndusInd Bank up by 12.66%, PNB up by 7.52%, Axis Bank up by 6.85%, Bank of Baroda up by 6.67% and BHEL up by 6.31%. On the flip side, Ranbaxy down by 3.48%, Coal India down by 1.98%, Infyosys down by 1.90%, Dr. Reddy's Laboratories down by 1.27% and Ambuja Cements down by 1.26% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined 245.36 points or 1.12% to 21,724.93, KLSE Composite slipped 0.74 points or 0.04% to 1,744.68, Nikkei 225 dropped 73.57 points or 0.55% to 13,322.81, Straits Times shed 10.05 points or 0.32% to 3,118.70 and Seoul Composite was down by 17.97 points or 0.95% to 1,869.88.

On the flip side, Shanghai Composite rose 1.67 points or 0.08% to 2,074.27 and Jakarta Composite was up by 31.37 points or 0.75% to 4,206.35.