Firm trade prevails at highest point of the day; Nifty surpasses 6,150 mark

Indian equities added gains to continue firm trade hovering near the highest point of the day in the late afternoon session on account of buying in front line counters and taking cues from global counterparts. The sentiments were on positive note after Moody’s Analytics stated that Indian economy has bottomed out and recovery is on the way on the back of improved investments, as the government has been actively trying to restart stalled investment projects, both in the public and private sectors. The sentiments also got a boost after data showed that foreign funds made substantial purchases of Indian stocks on Thursday. They bought shares worth net Rs 1,109.93 crore yesterday, as per provisional data from the stock exchanges. Hopes that RBI would lift the limit that banks could borrow from repo window in its upcoming quarterly policy review on October 29, are aiding the sentiment. Traders were seen piling positions in Metal, Bankex and Capital Goods stocks. In scrip specific development, Sesa Sterlite was trading firm after a foreign brokerage firm initiated coverage of the stock with a buy rating. SpiceJet was trading in green after media report indicated that Qatar Airways is in talks with the low cost carrier for a possible acquisition of 24% stake in the airline. Raymond was trading in green on report that the textile major is planning to offload a minority stake in its engineering subsidiary JK Files. The company has however denied the report.

On the global front, most of the Asian markets were trading in green barring Nikkei 225 and KLSE Composite while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,150 and 20,800 levels respectively. The market breadth on BSE was positive in the ratio of 1318:953 while 160 scrips remained unchanged.  

The BSE Sensex is currently trading at 20842.91, up by 427.40 points or 2.09% after trading in a range of 20843.86 and 20486.78. There were only 28 stocks advancing against 2 declines on the index.

The broader indices were trading in green; the BSE Mid and Small cap indices were trading higher by 0.98% and 0.62% respectively.

The gaining sectoral indices on the BSE were Metal up by 3.80%, Bankex up by 3.26%, Capital Goods up by 2.57%, Realty up by 2.15% and Oil & Gas up by 2.07% while, there were no losing indices on BSE.

The top gainers on the Sensex were SSLT up by 7.68%, Tata Steel up by 5.82%, L&T up by 3.71%, ICICI Bank up by 3.47% and Hindalco Industries up by 3.33%. On the flip side, Bajaj Auto down by 0.37% and Cipla down by 0.07%were the only losers on the Sensex.

Meanwhile, the government has reduced the import tariff value of gold and silver to $418 per 10 gram and $699 per kg, respectively, in line with global rates of the precious metals, which could lead to some softening in the price of the precious metal. Tariff value or the base price is set to determine the customs duty on the precious metal and to prevent under invoicing. Earlier, tariff value was fixed at $436 per 10 gram for gold and $702 per kg for silver during the last fortnight. Further, the government’s move will provide some respite to consumers in ongoing festival season in the country.

However, rising gold import has become a cause of concern for the government as it remains second major factor after crude oil for widening the current account deficit (CAD) of the country. Indian CAD widened to a record high of 4.9 percent of GDP in the April-June quarter, 2013. The government has set target to contain country’s CAD at 3.7 percent of GDP for the current fiscal.

Meanwhile, the government’s measures to contain the gold imports have started yielding as imports of gold and silver plunged more than 80% to $0.8 billion in September from $4.6 billion a year earlier. Recently, apex bank has introduced 80/20 rule under which 20% of all gold imports by jewellers has to be re-exported. India’s gold import is likely to come down to between 800-850 tonnes from 950 tonnes in FY13 on the back of sharp hike in import duty by the government and restrictions by the RBI.

The CNX Nifty is currently trading at 6,170.00, up by 124.15 points or 2.05% after trading in a range of 6,176.85 and 6,070.90. There were 49 stocks advancing against 1 decline on the index.

The top gainers of the Nifty were SSLT up by 7.52%, Tata Steel up by 5.89%, IndusInd Bank up by 5.22%, Axis Bank up by 4.19% and BPCL up by 3.61%. On the flip side, BHEL down by 0.20% was the sole loser on the index.

Most of the Asian equity indices were trading in green; Taiwan Weighted up by 0.79%, Seoul Composite up by 0.58%, Straits Times up by 0.28%, Shanghai Composite up by 0.24% and Jakarta Composite up 0.29% and Hang Seng up by 1.06%. On the other hand, Nikkei 225 down by 0.17% and KLSE Composite dropped 0.02%.

The European markets were trading in green; France’s CAC 40 was up 0.22%, Germany’s DAX added 0.01% and UK’s FTSE 100 gained 0.19%.