Benchmark equity indices, halting eight consecutive sessions long losing streak in early deals, puffed up substantial gains as investor’s scurried out to buy select blue chip stocks available at attractive valuations after the recent battering. Reliance Industries, Infosys and ICICI Bank which occupy 10.86%, 9.64% and 7.37% weight on 30 share barometer index-Sensex- on BSE, are among few blue chip stocks that gaining in the range of 1-2% have chiefly led to the upmove. Indian rupee which has gyrating around its all time lows has come in as a blessing in disguise for IT stocks that derive lion share of revenue from exports. However, the bounce back also came on the back of market participants covering short positions before the expiry of monthly derivatives on Thursday.
Indian equity markets have showcased strong teeth of resilience in the light of daunting global set up as Asian markets sliding for the sixth straight session prolonged its longest losing streak since August after a congressional committee charged with reducing the U.S. deficit failed to agree on cuts. Fears about the ability of politicians on either side of Atlantic to tackle huge debt burdens have chiefly sapped investors' confidence in the outlook for Western economies. Overnight on the Wall Street, U.S. stocks fell around 2 percent on Monday, following sharp falls in Europe, and commodities also slumped on concerns that the chances of a global recession are rising.
However, back home, jangled nerves were somewhat soothed after Standard and Poor's and Moody's, two of the big three ratings agencies, said the deficit committee's failure would not trigger an immediate downgrade of the U.S. credit rating. On the BSE sectoral front, stocks from Capital Goods and IT were showcasing favorable moves, while that of Consumer Durables, Fast Moving Consumer Goods and Auto stocks lost in the vast sea of red. The 30-share BSE index, which has lost nearly 1,625 points in the past eight sessions, recovered over 100 points and is currently trading above its crucial psychological level of 16k. In a similar fashion, the wide-based National Stock Exchange Nifty index shot up by 25 points to trade above the 4800 mark. However, the broader indices after getting a negative start are now trading mixed. Overall market breadth on BSE is marginally in the favour of declines which have thumped advances in the ratio of 1042:1007, while 80 shares have remained unchanged.
The BSE Sensex is currently trading at 16,085.30, up by 139.20 points or 0.87%. The index has touched a high and low of 16,105.52 and 15,970.11 respectively. There were 25 stocks advancing against 5 declines on the index.
The broader indices were trading mixed; the BSE Mid cap index gained 0.04% and Small cap index declined 0.05%.
The top gaining sectoral indices on BSE were CG up by 1.30%, IT up by 1.26%, Metal up by 1.00%, Power up by 0.88% and Bankex up by 0.87%. While, CD down by 1.45%, FMCG down by 0.14% were the top losers on the index.
The top gainers on the Sensex were Tata Motors up by 3.53%, Hindalco up by 3.02%, BHEL up by 2.69%, Jaiprakash Associate up by 2.14% and Maruti Suzuki up by 2.12%.
On the flip side, Bajaj Auto was down by 2.29%, Bharti Airtel was down by 2.18%, Hero MotoCorp down by 0.76% and HUL down by 0.14% were the top losers on the Sensex.
Meanwhile, in order to protect domestic aviation industry from the financial crunch, the government is likely to allow up to 26% equity participation by foreign airlines in Indian carriers, a move which would further relax the aviation sector in the country. A draft union cabinet note on foreign direct investment (FDI) has put the investment limit for foreign airlines in Indian carriers at 26% against the 24% proposed initially by the civil aviation ministry to the Department of Industrial Policy and Promotion (DIPP). In earlier proposal to the DIPP, the civil aviation ministry had pitched for a 24% limit on FDI by foreign airlines as it would exclude them from using voting rights to control management. Under the current rules, the government allows 49% FDI in the aviation sector, but at the same time, it restricts any direct or indirect investment by foreign airlines or their arms in the domestic aviation sector. A relaxation in the restriction would fly in the much-needed strategic funds for the airlines industry. The cabinet note also recommends removal of the existing restrictions as any strategic investor would be interested in a minimum 26% investment. The union cabinet note has been sent to all concerned ministries and departments including the ministry of external affairs, civil aviation and department of economic affairs on November 17, seeking comments from them within 15 days. The change in policy stance comes in the backdrop of the Kingfisher Airlines facing a severe cash crunch and mounting debt. The Kingfisher Airlines, which has been on the lookout for a strategic investor to bring in equity to save airline has called for opening up the aviation sector to help it end the operational and financial crisis it faces. The government is also planning to restructure the state-owned Air India and bring in a strategic partner when it turns profitable. As a whole, aviation sector has been going through tough times because of the increasing operational costs, including fuel costs. In the first half of the fiscal, India's airlines have made a combined loss of about Rs 3,500 crore.
The S&P CNX Nifty is currently trading at 4,817.15, up by 38.80 points or 0.81%. The index has touched a high and low of 4,823.80 and 4,782.55 respectively. There were 38 stocks advancing against 12 declines on the index.
The top gainers of the Nifty were Tata Motors up by 3.10%, BHEL up by 2.93%, Hindalco up by 2.73%, SAIL up by 2.21% and ICICI Bank up by 2.15%.
On the flip side, Bajaj Auto down by 2.57%, Bharti Airtel down by 2.43%, Ambuja Cement down by 1.57%, Hero MotoCorp down by 0.86% and BPCL down by 0.82% were the major losers on the index.
Asian markets kept trading on a subdued note, Shanghai Composite declined 0.96%, Hang Seng shed 0.98%, KLSE Composite fell 0.18%, Nikkei 225 lost 0.36%, Straits Times inched lower by 0.04%, Taiwan Weighted descended 0.05% and Jakarta Composite too surrendered 0.06%.
On the flip side, Seoul Composite gained 0.28% was the lone gainer in region.
