Markets make a positive start bucking sluggish global cues

Markets have made a positive start on Wednesday bucking the sluggish global cues. Though, the gains are modest but the indices are holding it firm in the first hour of trade after a momentary drop into red. Traders are getting support with Finance Minister P Chidambaram’s confidence that India’s current account deficit (CAD) will be contained below $60 billion this financial year as against an earlier estimate of $70 billion. The IT pack was in most jubilant mood after the global IT major Cognizant Technology Solutions Corp reported a better-than-expected 22 percent rise in revenue, helped by contracts from insurers setting up online exchanges as part of President Barack Obama's healthcare reforms and raised its full-year forecast for both profit and revenue. Though, the banking stocks were still the laggard despite two of the major banks SBI and HDFC bank increasing their base lending rate, a move other banks are also likely to follow. Sectorally apart from IT and realty, consumer durables, technology too have taken the lead, while other than banks; FMCG and auto were in somber mood. However, the broader markets are showing good trade, outperforming the benchmarks.

The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 886 shares on the gaining side against 355 shares on the losing side while 41 shares remain unchanged.

The BSE Sensex opened at 21004.54; about 29 points higher compared to its previous closing of 20974.79, and has touched a high and a low of 21045.38 and 20944.50 respectively. The index is currently trading at 21027.70, up by 52.91 points or 0.25%. There were 17 stocks advancing against 12 declines and one stock remains unchanged on the index.

The overall market breadth has made a strong start with 69.11% stocks advancing against 27.69% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.83%, while Small cap index gained 1.05%. 

The top gaining sectoral indices on the BSE were, IT up by 1.17%, Consumer Durables up by 1.09%, Power up by 0.99%, Teck up by 0.94% and Health Care up by 0.93%, while Bankex down by 0.40% and Realty down by 0.05% were the top losers on the sectoral index.

The top gainers on the Sensex were TCS up by 1.84%, Wipro up by 1.57%, Cipla up by 1.52%, Sun Pharma up by 1.26% and Coal India up by 1.23%. On the flip side, Bajaj Auto was down by 1.82%,  HDFC was down by 0.93%, BHEL was down by 0.91%, SSLT was down by 0.89% and Hindalco Industries was down by 0.59% were the top losers on the Sensex.

Meanwhile, Foreign Direct Investment (FDI) into the country’s services sector has declined by 47.5 percent to $1.19 billion during the April-August period of 2013 as compared to $ 2.28 billion in the same period last year mainly due to the declined outsourcing business of India on the back of the various restrictions put by developed economies.  Indian services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, represent around 60% share in the country’s GDP. During the 2012-13, foreign investment in the segment fell by 7 percent to $ 4.83 billion from $5.21 billion in 2011-12.

In spite of the government various efforts to increase FDI, during April-August, 2013 has declined, reflecting the need to take more steps to improve the business environment in the country. Overall, FDI during the April-August period of 2013-14 has grown by a marginal 4 percent to $8.46 billion, from $8.16 billion in the first five months of 2012-13.

FDI is considered crucial for economic development of a country and to attract maximum FDI into the country, the government has been relaxing the foreign investment norms in various sectors. Recently, the government has also started exercise in allowing FDI in railways sector besides liberalising FDI norms for construction and housing sector. It is also considering raising the FDI cap in the insurance sector to 49 percent from 26 percent. Meanwhile, India needs around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

The CNX Nifty opened at 6,260.55; about 7 points higher as compared to its previous closing of 6,253.15, and has touched a high and a low of 6,269.70 and 6,239.65 respectively. The index is currently trading at 6,258.20, up by 5.05 points or 0.08%. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were BPCL up by 1.85%, TCS up by 1.80%, Cipla up by 1.51%, Sun Pharmaceuticals up by 2.31% and Wipro up by 1.35%. On the flip side, IndusInd Bank down by 1.84%, Bajaj-Auto down by 1.77%, ACC down by 1.36%, DLF down by 1.31% and Ambuja Cements down by 1.23% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng was up by 63.92 points or 0.28% to 23,102.87, Jakarta Composite was up by 10.14 points or 0.23% to 4,430.97, Taiwan Weighted has gained 4.10 points or 0.06% to 8,266.81, Nikkei 225 up by 139.38 points or 0.98% to 14,363.19 and Seoul Composite was up by 2.75 points or 0.14% to 2,016.64.

On the flip side, Shanghai Composite was marginally in red, down by 0.07 points to 2,157.17, KLSE Composite lost 3.20 points or 0.18% to 1,804.27 and Straits Times dropped 3.80 points or 0.13% to 3,202.60.