RBI’s measures lift benchmarks higher in early deals

Indian equity benchmarks are trading jubilantly in early deals on Tuesday with frontline gauges surpassing their crucial 20,000 (Sensex) and 5,950 (Nifty) levels after the Reserve Bank of India (RBI), in a surprise move, eased the liquidity tightening measures it had initiated earlier, by reducing the marginal standing facility (MSF) rate by a further 50 basis points (bps). This is the second time in less than a month that the central bank has cut the key overnight interest rate, taking advantage from the rupee’s recent surge. Appreciation in Indian rupee too was providing support to the markets. The rupee was trading at Rs 61.61 per dollar as against a yesterday’s close of Rs 61.80 per dollar.

On the global front, the US markets ended lower with major indices losing about a percent, as lawmakers failed to make any progress on resolving the impasse over a government spending bill. While, most of the Asian equity benchmarks were trading in the green despite sluggish opening as investors opted to buy beaten down but fundamentally strong stocks, the gains, however remained capped amid concerns about the looming U.S. debt ceiling deadline.

Back home, all the counters on the BSE sectoral front remained in the green with banking, capital goods and realty remained the top gainers, while auto, consumer durables, power, public sector undertakings, fast moving consumer goods too were trading with significant gains. The broader indices too were going neck to neck with benchmarks, while the market breadth on the BSE was positive; there were 803 shares on the gaining side against 338 shares on the losing side while 42 shares remain unchanged.

The BSE Sensex opened at 20094.21; about 200 points higher compared to its previous closing of 19895.10, and has touched a high and a low of 20134.72 and 20034.52 respectively.

The index is currently trading at 20085.07, up by 189.97 points or 0.95%. There were 26 stocks advancing against 4 declines on the index.

The overall market breadth has made a strong start with 67.88% stocks advancing against 28.57% declines. The broader indices too were trading in green; the BSE Mid cap index up by 0.65% and Small cap index up 0.52%. 

The top gaining sectoral indices on the BSE were, Bankex up by 2.40%, Capital Goods up by 2.06%, Realty up by 1.93%, Auto up by 1.36% and Consumer Durables up by 1.20%, while there were no losers on the sectoral index.

The top gainers on the Sensex were Bharti Airtel up by 3.24%, L&T up by 2.95%, ICICI Bank up by 2.74%, Tata Power up by 2.57% and Tata Motors up by 2.54%. On the flip side, Coal India was down by 0.93%, Hindalco was down by 0.21%, TCS was down by 0.13% and HUL was down by 0.02% were the few losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) is mulling at easing restrictions on the forex futures market once stability improves in the foreign exchange market. 'Once stability improves in the forex market, India’s Apex Bank will look at the whole gamut of futures market,' RBI Deputy Governor H. R. Khan said on the sidelines of an event.

Illustrating the same, the deputy governor said, although there was requirement of documentation for the underlying in the OTC (over-the-counter) market, but after easing restrictions, the documentation requirement for certain small values underlying could be done away with.

Additionally, he also unveiled that RBI was is in talks with Securities and Exchange Board of India (SEBI) on making the dollar-rupee OTC and futures market trades on a delivery basis. Further, he also opined that it would be best to harmonize both the OTC and futures market, possibly with both being delivery-based.

Meanwhile, Indian rupee is currently trading at 61.93, weaker by 49 paise from its previous close of 61.44 on Friday. The currency, so far in the day has touched a high and low of 62.00 and 61.52 respectively.

The CNX Nifty opened at 5,975.00; about 69 point higher as compared to its previous closing of 5,906.15, and has touched a high and a low of 5,981.70 and 5,948.75 respectively.

The index is currently trading at 5,961.45, up by 55.30 points or 0.94%. There were 43 stocks advancing against 7 declines on the index.

The top gainers of the Nifty were Indusind Bank up by 5.06%, DLF up by 3.0163%, Bharti Airtel up by 3.00%, L&T up by 2.95% and Kotak Bank up by 2.95%. On the flip side, Coal India down by 0.78%, Lupin down by 0.77%, HCL Technologies down by 0.71%, TCS down by 0.53% and Hindalco down by 0.22% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 222.96 points or 0.97% to 23,196.91, Jakarta Composite surged 46.83 points or 1.07% to 4,421.79, Nikkei 225 strengthened 38.69 points or 0.28% to 13,892.01, Straits Times added 12.76 points or 0.41% to 3,149.35 and Taiwan Weighted was up by 30.11 points or 0.36% to 8,363.77.

On the flip side, KLSE Composite dipped 1.60 points or 0.09% to 1,775.22 and Seoul Composite was down by 5.37 points or 0.27% to 1,989.05.