Markets extend jubilation with a positive start of the new week

Indian markets have made a jubilant start of the new week and month, benchmark indices continued their upmove despite some weak economic data announced after the closing of the markets in last session. Domestic markets were getting support from the surge in some regional peers after Chinese manufacturing was reported to be on the path of recovery. While on the domestic front traders  seemed to have overlooked the weak first quarter GDP data, which stood at 4.4% compared with 4.8% for the fourth quarter of the previous fiscal and were taking cues with the comments of commerce secretary SR Rao that merchandise export in August may be in double-digits once again and this upward trend is expected to continue in the months to come. There was good support from the oil companies after a hike in petrol and diesel prices was announced during the weekend, coupled with decline in international crude prices after the concerns of the US strike on Syria faded. Back on street, there was good bounce back in the battered mid cap stocks and the broader indices were going neck-to-neck with their larger peers, sectorally on the BSE, FMCG, Metal, Consumer Durables and Banking were in maximum demand, while Auto sector was still in somber mood ahead of the monthly sales data, which are likely to be bad once again. 

The broader indices were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 779 shares on the gaining side against 308 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex opened at 18691.83; about 72 points higher compared to its previous closing of 18619.72, and has touched a high and a low of 18825.77 and 18678.93 respectively. The index is currently trading at 18800.19, up by 180.47 points or 0.97%. There were 24 stocks advancing against 6 declines on the index.

The overall market breadth has made a strong start with 67.74% stocks advancing against 26.78% declines. The broader indices, the BSE Mid cap and Small cap indices were up by 0.92% and 0.80% respectively. 

The few gaining sectoral indices on the BSE were, FMCG up by 2.26%, Metal up by 1.77%, Consumer Durables up by 1.59%, Bankex up by 1.47% and Health Care up by 1.11%, while Auto down by 0.23% was the only loser on the sectoral index.

The top gainers on the Sensex were Sesa Goa up by 3.02%, Hindustan Unilever up by 2.46%, ITC up by 2.27%, Tata Steel up by 2.08% and ICICI Bank up by 1.83%. On the flip side, Tata Motors was down by 1.59%, Mahindra & Mahindra was down by 1.47%, NTPC was down by 1.15%, Tata Power was down by 1.06% and Dr Reddys Lab was down by 0.79% were the top losers on the Sensex.

Meanwhile, in a bid to boost the country’s exports, the Commerce Ministry has asked the Finance Ministry to include export credit in priority sector lending of all banks, to boost overseas sales as the flow of credit to the export sector is declining. During FY08 to FY13, the share of export credit in total credit witnessed a sharp decline of 8 percent and has come down to 11.36 percent from 19.82 percent.

The broad categories of priority sector include Agriculture, Small Scale Industries, Small Business / Service Enterprises, Micro Credit, Education loans and Housing loans. Presently, only foreign banks are required to disburse 12 percent of their credit to export companies under the priority sector, while, for other banks export finance is outside the required 40 percent priority sector lending.

In July, country's merchandise exports grew 11.6 percent, however, overseas shipments from major sectors such as engineering and textiles were still in the negative zone. In the previous fiscal, Indian exports declined by 1.76% to $300.6 billion which were the first ever decline since 2009-10. Slowing growth in exports and increasing imports are putting pressure on the current account deficit (CAD), which widened to a record high of 4.8 percent of GDP in the previous fiscal. However, the government is making all efforts to boost country’s export and has recently announced a slew of measures including sops for Special Economic Zones (SEZs) and extension of the popular EPCG scheme to all sectors to boost shipments.

The CNX Nifty opened at 5,480.25; about 8 point higher as compared to its previous closing of 5,471.80, and has touched a high and a low of 5,526.75 and 5,478.85 respectively.

The index is currently trading at 5,516.20, up by 44.40 points or 0.81%. There were 41 stocks advancing against 9 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 4.18%, IndusInd Bank up by 3.63%, Axis Bank up by 3.18%, Lupin up by 2.49% and Sesa Goa up by 2.23%. On the flip side, M&M down by 1.95%, Tata Motors down by 1.84%, NTPC down by 1.30%, Tata Power down by 1.19% and ACC down by 0.85% were the major losers on the index.

The Asian equity indices were trading mixed; Shanghai Composite was down by 2.64 points or 0.13% to 2,095.74, Jakarta Composite was down by 30.45 points or 0.73% to 4,164.64, KLSE Composite has lost 9.27 points or 0.54% to 1,718.31 and the Seoul Composite was down 3.10 points or 0.16% to 1,923.26.

On the other hand, Hang Seng surged by 410.35 points or 1.89% to 22,141.72, Nikkei 225 gained 207.94 points or 1.55% to 13,596.80, Straits Times was up by 19.09 points or 0.63% to 3,048.03 and Taiwan Weighted gained 19.05 points or 0.24% to 8,040.94.