Benchmarks soar to day's high; positive start of European markets aid

Benchmark equity indices gaining fervor are now trading near day’s highest point on buying in Realty, FMCG and Banking sectors despite selling in Auto and Metal counters. Nevertheless, the trade remains largely range-bound, given that most of the traders prefer being on the sidelines ahead of conclusion of the two-day U.S. Federal Reserve meeting later in the day, which is expected to result in the start of a rollback of its stimulus. Meanwhile, European markets’ positive start is also adding to the positive sentiment. On the global front, European shares edged higher early on Wednesday, trading near their recent five-year highs, on expectations the U.S. central bank would announce only a moderate reduction in its programme of monetary stimulus. Closer home, Sensex and Nifty are comfortably cruising past the crucial 19850 and 5850 psychological levels, with gains of over quarter of a percent. Meanwhile, broader indices also adding ground are trading in line with larger peers.  The overall market breadth on BSE was in the favour of advances which have thumped declines in the ratio of 1053: 953; while 147 shares remained unchanged.

The BSE Sensex is currently trading at 19872.96, up by 68.93 points or 0.35% after trading in a range of 19900.68 and 19775.29. There were 20 stocks advancing against 10 declines on the index.

The broader indices too added some ground; the BSE Mid cap and Small cap indices were trading higher by 0.27% and 0.32% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.19%, Fast Moving ConSumer Goods (FMCG) up by 0.97%, Bankex up by 0.76%, Health Care (HC) up by 0.64% and Capital Goods (CG) up by 0.58%. While, Auto down by 0.22% and Metal down by 0.11%, were the losing indices on BSE.

The top gainers on the Sensex were, Tata Power up by 2.84%, Dr Reddys Lab up by 1.95%, SBI up by 1.93%,  Hindustan Unilever up by 1.90% and NTPC up by 1.64%. On the flip side, HDFC down by 2.37%, BHEL down by 1.87%, Mahindra and Mahindra down by 1.00%, Hero MotoCorp down by 0.96% and Sesa Goa down by 0.86% were the only losers on the Sensex.

Meanwhile, foreign direct investment (FDI) into India increased by 12.9 percent on y-o-y basis to $1.66 billion in July from $1.47 billion recorded in the same month of previous fiscal, highest in the previous three months. During April to July period of current fiscal, FDI inflows were up by 20 per cent to $7.05 billion over the same period of previous fiscal.

The sectors that received large inflows during the first four months of FY14 include services ($1.02 billion), pharmaceuticals ($1 billion), automobile industry ($637 million) and construction ($359 million). Country wise, maximum FDI during the period came from Singapore ($2.21 billion), followed by Mauritius ($1.85 billion), the Netherlands ($520 million), Germany ($518 million), and the US ($371 million).   

FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. Recently, the government has relaxed FDI norms in around 12 sectors which include telecom, tea, pension and petroleum and natural gas. Meanwhile, India would require around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth. Further, a rise in FDI will help support the rupee, which recently depreciated to record low of over 68.50 against the US dollar.

The CNX Nifty is currently trading at 5,863.75, up by 13.55 points or 0.23% after trading in a range of 5,877.90 and 5,840.20. There were 31 stocks advancing against 18 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were Tata Power up by 2.98%, DLF up by 2.47%, NTPC up by 2.00%, Dr Reddys Lab up by 1.98% and Hindustan Unilever up by 1.88%. On the flip side, NMDC down by 3.15%, HDFC down by 2.36%, Power Grid down by 2.31%, Cairn down by 2.18% and BHEL down by 1.90% were the major losers on the index.

The Asian equity indices were trading mixed; Shanghai Composite up by 0.34%, Nikkei 225 was up by 1.35% and Straits Times up by 0.58%. While, Seoul Composite down by 0.39%, Taiwan Weighted down by 0.49%, Hang Seng down by 0.04%, Jakarta Composite down by 0.83%  and KLSE Composite down by 0.20%.

European markets are mostly trading in positive terrain; with DAX gainning 0.23%, FTSE 100 adding 0.24%, while DAX was trading lower by 0.17%.