Benchmarks make gap-up opening buoyed by supportive global cues

Extending previous session’s euphoria, Indian equity benchmarks have made a gap-up opening and are trading with a gain of around one percent, recapturing their crucial 5,500 (Nifty) and 18,700 (Sensex) levels, buoyed by supportive global cues. All the Asian markets, barring Jakarta Composite, were trading in the green, with Chinese Shanghai Composite garnering a gain of around one and a half percent after state statistics bureau said that the country’s economy is showing clearer signs of stabilization and positive change, helped by some external improvement, and is on track for the 2013-growth target of 7.5%. The US markets extended their gains on Friday supported by a positive reaction to weak new home sales data.

Back home, sentiments got some boost after the Planning Commission deputy chairman Montek Singh Ahluwalia said that the government should use the foreign exchange reserves of a little under $280 billion to deal with a possible shortage and said that the rupee is over depreciated. The rate sensitive realty and auto sector also were trading with some traction with Finance Minister P Chidambaram saying that there is no need for excessive and unwarranted pessimism. Finance minister has also said that the recent liquidity control measures taken by the Reserve Bank to reduce volatility in forex market and quell speculation would be revisited with return of stability.

All the sectoral indices on the BSE were trading in the green with Power and Capital Goods segments gaining the most. Software, technology, healthcare, realty and metal too were trading with significant gains. The broader indices were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive; there were 857 shares on the gaining side against 290 shares on the losing side while 58 shares remain unchanged.

The BSE Sensex opened at 18602.56; about 83 points higher compared to its previous closing of 18519.44, and has touched a high and a low of 18728.19 and 18602.56 respectively.

The index is currently trading at 18702.08, up by 182.64 points or 0.99%. There were 24 stocks advancing against 6 declines on the index.

The overall market breadth has made a strong start with 73.76% stocks advancing against 21.88% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices were up by 0.94% and 0.87% respectively. 

The few gaining sectoral indices on the BSE were, Power up by 1.95%, Capital Goods up by 1.94%, IT up by 1.49%, Teck up by 1.48% and Health Care up by 1.37%, while there were the no losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 3.53%, Sterlite Industries up by 3.53%, Tata Power up by 3.33%, Wipro up by 3.16% and Coal India up by 2.74%. On the flip side, Tata Motors was down by 1.26%, Tata Steel was down by 0.99%, ONGC was down by 0.74%, ICICI Bank was down by 0.74% and Gail India was down by 0.34% were the top losers on the Sensex.

Meanwhile, expressing need to boost investment into the country, the Federation of Indian Chambers of Commerce and Industry (FICCI) said that the government should focus on bringing more reforms to kick start investments and set the economic growth rolling on the fast track. Indian economy’s growth is likely to remain flat in the first quarter of the current fiscal on account of sluggish economic conditions. 

Pointing out that, Finance Minister P Chidambaram's statement on growth being the key focus area as encouraging, FICCI president Naina Lal Kidwai said that presently there is need to return the investment cycle into the country and to continue the momentum on the reform front. By adding further, she added that India should focus on introducing goods and services tax (GST) and speed up the implementation of infrastructure projects cleared by Cabinet Committee on Investment (CCI) and restart investments.

At present, Indian economy is struggling with slowdown and all macro-economic indicators are deteriorating. Recently, domestic currency depreciated to a record low of over 65 per dollar on account of high current account deficit (CAD), which widened due to high gold imports and crude oil prices. In the last fiscal year, India’s economic growth slowed down to decade low of 5 percent owing to the poor performance of farm, manufacturing and mining sectors.

The CNX Nifty opened at 5,499.40; about 27 points higher as compared to its previous closing of 5,471.75, and has touched a high and a low of 5,528.70 and 5,496.20 respectively.

The index is currently trading at 5,520.25, up by 48.50 points or 0.89 %. There were 41 stocks advancing against 9 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 5.91%, BHEL up by 3.62%, Tata Power up by 3.46%, Coal India up by 2.87% and Asian Paints up by 2.83%. On the flip side, Tata Motors down by 1.46%, Tata Steel down by 1.17%, ICICI Bank down by 0.86%, ONGC down by 0.74% and Gail down by 0.20% were the major losers on the index.

Most of the Asian equity indices were trading in Green; Shanghai Composite surged 29.03 points or 1.41% to 2,086.49, Hang Seng strengthened 205.78 points or 0.94% to 22,069.29, KLSE Composite gained 10.02 points or 0.58% to 1,731.09, Nikkei 225 rose 4.88 points or 0.04% to 13,665.43, Straits Times increased 16.68 points or 0.54% to 3,105.53, Seoul Composite added 17.12 points or 0.92% to 1,887.28 and Taiwan Weighted was up by 32.40 points or 0.41% to 7,905.71.

On the flip side, Jakarta Composite was down by 5.88 points or 0.14% to 4,163.95.