Markets continue firm trade in afternoon session

Indian equity benchmarks continued their firm trade in the afternoon session on back of buying witnessed in IT, Teck and banking stocks. Investors' sentiments got support after Finance Minister P Chidambaram said that the government is committed to the path of fiscal consolidation and will take difficult decisions soon to check country’s widening deficits. However, Markets gains remained range bound as investors stayed on the sidelines ahead of Inflation data for September, as measured by the wholesale price index (WPI) and the consumer price index (CPI), scheduled to be announced today. On sector specific movement, IT, Teck and Bankex were trading up by over 1%, While, Metal and Power were trading lower on BSE. From the IT space, Wipro was up by nearly 3.12%, TCS was up by 2.59% and Infosys was trading up by 0.98% on BSE.

On the global front, Asian markets were trading mixed as global investors remained concern over China's export growth, which unexpectedly fizzled in September, underscoring worries about flagging global demand. Meanwhile, markets in Japan and Hong Kong are closed on Monday for public holidays. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,000 and 20,000 levels respectively. The market breadth on BSE was positive, out of 2,009 stocks traded, 1113 stocks advanced, while 753 stocks declined on the BSE.     

The BSE Sensex is currently trading at 20,620.23 up by 91.64 points or 0.45% after trading in a range of 20,645.94 and 20,497.88. There were only 18 stocks advancing against 12 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.95%, while Small cap index up by 0.81%.

The gaining sectoral indices on the BSE were IT up by 1.68%, Teck up by 1.43%, Bankex up by 0.97%, Realty up by 0.73% and PSU up by 0.53%. While, Metal down by 0.30% and power down by 0.01% were remained the only losing indices on BSE.

The top gainers on the Sensex were Wipro up by 3.12%, TCS up by 2.59%, Coal India up by 1.49%, Dr Reddys Lab up by 1.48% and Infosys up by 0.98%. On the flip side, Hindalco Inds down by 2.06%, BHEL down by 1.80%, Tata Steel down by 1.09%, Jindal Steel down by 1.08% and Gail India down by 0.88% were the only losers on the Sensex.

Meanwhile, in order to increase penetration of foreign banks in the country, the Reserve Bank of India (RBI) will soon unveil major reforms in the banking sector that will allow foreign banks to enter India in a big way. The RBI has planned to enhance the penetration level of Indian banking industry as it plays an important role in the economic development of the country and is the most dominant segment of the financial sector. Banks help channel savings to investments and encourage economic growth by allocating savings to investments that have potential to yield higher returns.

The RBI governor Raghuram Rajan has said that the reform to facilitate entry of foreign banks in India is a part of the five pillars of reforms, which the RBI is going to implement in the next few years. By adding further, the governor said that global banks will have to enter in domestic market through one route either by branch network or fully owned subsidiary as it will simplify RBI regulatory function. The RBI would allow a lot of freedom for foreign banks having wholly-owned subsidiaries structure and will come up with details for these banks in the next couple of weeks, he added.

Rajan further added that financial inclusion, monetary policy framework and deepening of Indian markets are another area of policy reforms. Referring to RBI monitory policy framework, he said that ordinary monetary policy would be focused on containing inflation and not directed towards external sectors as the price situation was an issue for the economy. Meanwhile, the governor has expressed need to make monetary policy framework more explicit to bring it up to modern standards of transparency and credibility.

The CNX Nifty is currently trading at 6,118.25 up by 22.05 points or 0.36% after trading in a range of 6,124.10 and 6,082.90. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Wipro up by 3.22%, Bank of Baroda up by 2.92%, Axis Bank up by 2.84%, TCS up by 2.68% and PNB up by 2.28%. On the flip side, Asian Paints down by 2.61%, Hindalco Inds down by 2.10%, BHEL down by 1.94%, Tata Steel down by 1.20% and Jindal Steel down by 1.18% were the major losers on the index.

The Asian equity indices were trading mixed; Jakarta Composite up by 0.74%, KLSE Composite up by 0.01% and Shanghai Composite up by 0.41%. While, Taiwan Weighted down by 0.90%, Straits Times down by 0.50% and Seoul Composite down by 0.23%.