Strong Infosys revenue guidance, firm global cues pull markets higher in early deals

Buoyed by firm global cues, Indian equity benchmarks have made a gap-up opening and are trading jubilantly with frontline gauges recapturing their crucial 6,050 (Nifty) and 20,400 (Sensex) bastions. Sentiments also remained up-beat after the information technology (IT) major revised its FY14 revenue guidance to 9-10% from 6-10% in dollar terms. Meanwhile, Infosys, on the consolidated basis, registered a growth of 1.60% in net profit at Rs 2407 crore as compared to Rs 2369 crore in the same quarter previous year. Total income of the company rose 27.56% to Rs 13475 crore for quarter under review as against Rs 10564 crore in corresponding quarter previous year.

Global cues remained supportive with the US markets witnessing rally overnight on optimism, about an end to the budget deadlock in Washington and traders largely shrugged off a report from the Labor Department showing a sharp jump in initial jobless claims. Asian markets too were trading in fine fettle with Japanese Nikkei surging around one and a half percent as yen slide against the dollar. Some support also came in after the index measuring corporate service prices in Japan was up 0.3 percent at 102.7 in September, compared to the previous month.

Back home, traders eyeing the Industrial growth numbers; the Index of Industrial Production (IIP) data for August though will be announced after the market hours but is likely to remain on growth path after surprising in last month with a growth of 2.6 percent and coming out of contraction mood. Back home, on the sectoral front, software witnessed the maximum gain in trade followed by technology and realty, while consumer durables, metal and fast moving consumer goods remained the top losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 778 shares on the gaining side against 417 shares on the losing side while 55 shares remain unchanged.

The BSE Sensex opened at 20535.90; about 263 points higher compared to its previous closing of 20272.91, and has touched a high and a low of 20559.69 and 20368.06 respectively.

The index is currently trading at 20442.73, up by 169.82 points or 0.84%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a strong start with 62.24% stocks advancing against 33.36% declines. The broader indices were trading in green; the BSE Mid cap up by 0.50% and Small cap indices up by 0.47%. 

The top gaining sectoral indices on the BSE were, IT up by 3.69%, TECk up by 3.08%, Realty up by 1.15%, Capital Goods up by 0.86% and Auto up by 0.68%, while Consumer Durables down by 0.49%, Metal down by 0.47%, FMCG down by 0.09% and Power down by 0.06% were the few losers on the sectoral index.

The top gainers on the Sensex were Infosys up by 5.37%, Wipro up by 3.27%, TCS up by 2.28%, M&M up by 1.48% and GAIL up by 1.16%. On the flip side, SSLT was down by 1.28%, Hindalco  was down by 0.85%, Tata Steel  was down by 0.81%, Sun Pharma down by 0.66%  and BHEL was down by 0.34% were the top losers on the Sensex.

Meanwhile, with an aim to attract road developers and to revive country’s highway sector, the government is reconsidering its exit policy for road developers in order to resolve taxation issues in policy. Earlier, in June, the government had approved a policy that allows infrastructure developers to exit highway projects by divesting their entire stake. The government was of the view that new policy will help to expedite implementation of road infrastructure in the country and insulate the highways authority from heavy financial claims and unnecessary disputes. Meanwhile, the government's exit policy has not attracted road developers because of its complicated structure. After the policy was formalized, highway developers had also raised concerns over the taxation structure in special purpose vehicles (SPV) executing the projects.

Meanwhile, the ministry of road transport and highways is taking measures to revive the growth in highway road projects in the country and has recently asked the government to provide flexibility in the model concession agreement (MCA) to allow the National Highways Authority of India (NHAI) board to make changes in proposed road projects, if required. Further the ministry would like provisions in the public-private partnerships (PPPs) contracts that allow re-negotiations as PPPs are long-term partnerships spread over 20-25 years. The government has entered into the 'Public Private Partnership (PPP)' programme in order to bring adequate resources for setting up of a sound and efficient infrastructural base.

The CNX Nifty opened at 6,104.85; about 84 points higher as compared to its previous closing of 6020.95, and has touched a high and a low of 6,031.80 and 5,997.75 respectively.

The index is currently trading at 6,067.40, up by 46.45 points or 0.77%. There were 31 stocks advancing against 18 declines and one stock remains unchanged on the index.

The top gainers of the Nifty were Ranbaxy up by 5.36%, Infosys up by 5.32%, HCL Tech up by 3.78%, Wipro up by 3.51% and TCS up by 2.32%. On the flip side, SSLT down by 1.36%, Tata Steel down by 1.02%, Hindalco down by 0.98%, Grasim down by 0.77% and Ambuja Cement down by 0.74% were the major losers on the index.

Asian markets have made a positive start and are trading jubilantly in early deals on Friday tracking firm cues from Wall Street amid optimism that U.S. politicians are moving towards a deal to prevent the country hitting its debt ceiling. Japanese Nikkei surged around one and a half percent as yen slide against the dollar. Some support also came in after the index measuring corporate service prices in Japan was up 0.3 percent at 102.7 in September, compared to the previous month, that topped forecasts for an increase of 0.2 percent following the downwardly revised 0.2 percent gain in August (originally 0.3 percent). On a yearly basis, prices were up 2.3 percent, matching expectations and unchanged from the previous month after a downward revision from 2.4 percent.

Shanghai Composite rose 19.39 points or 0.88% to 2,210.32, Hang Seng soared 287.76 points or 1.25% to 23,239.06, Jakarta Composite gained 28.83 points or 0.64% to 4,515.50, KLSE Composite strengthened 10.10 points or 0.57% to 1,786.02, Nikkei 225 surged 211.34 points or 1.49% to 14,406.05, Straits Times increased 17.77 points or 0.56% to 3,187.68, Seoul Composite added 23.55 points or 1.18% to 2,024.95 and Taiwan Weighted was up by 35.18 points or 0.42% to 8,379.91.