Benchmarks witnessing sudden spurt trade near day’s high level

After breaking free from red terrain in later morning deals, benchmark equity indices have spurted sharply on account of sudden increase in the buying activities tailing the uptick of European futures that are indicating a positive start of European markets despite mixed regional cues. Meanwhile rally of small to mid-sized private banks on hopes that these companies could become potential acquisition targets for foreign banks too has led to some cheers at Dalal Street. With a view to bolster its regulatory powers in the wake of global financial crisis, the Reserve Bank of India (RBI) finally come out with framework on Wednesday on how foreign banks will operate in the country. As per the guidelines, foreign banks operating in the country will enjoy nearly equal terms with local lenders if they move to a wholly owned subsidiary structure. Besides, attractive valuations of local equities available after two straight session of markets’ correction also are drawing bargain hunter towards the markets.Thus, accelerating to day’s high, both, Sensex and Nifty, puffing up over a percent, are steadily approaching 21,150 and 6,300 levels respectively. Meanwhile, broader indices too gaining traction are trading with gain of over half a percent.

Sectorally, Information Technology, Metal and Realty counters are witnessing maximum buying interest, while Consumer Durables and Power are the only counters which are resisting the positive trend and are trading lower. Depreciation of Indian currency mainly has lifted the entire IT pack. On the currency front, Indian rupee, has extended previous four sessions’ southbound journey, on account of continued dollar demand from state-owned banks, which are speculated to be buying on behalf of oil refiners, fueling fears that central bank was gradually withdrawing the oil window.

The BSE Sensex is currently trading at 21120.67, up by 225.73 points or 1.08% after trading in a range of 21142.85 and 20866.88. There were 25 stocks advancing against only 5 declining stocks on the index.

The broader indices too added ground; both BSE Mid and Small cap indices were trading higher by 0.52% each.

The gaining sectoral indices on the BSE were IT up by 2.03%, Metal up by 1.90%, Teck up by 1.57%, Realty up by 1.03% and Capital Goods up by 0.93%.While, Consumer Durables down by 1.31% and Power down by 0.14% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.24%, SSLT up by 2.74%, Hindalco Inds up by 2.42%, TCS up by 2.23% and Infosys up by 2.09%. On the flip side, BHEL down by 3.52%, Bharti Airtel down by 0.49%, Coal India down by 0.30%, Tata Motors down by 0.17%, and Gail India down by 0.14%, were the only losers on the Sensex.

Meanwhile, amid rising concerns over the increasing free trade pacts of the country, Commerce and Industry Ministry has allayed fears on India’s Free Trade Agreements (FTAs) saying that FTAs with most trading partners have resulted in an increase in exports and not caused any adverse impact on the manufacturing sector. During the Trade and Economic Relations Committee (TERC) headed by the Prime Minister, some concerns were raised on the FTAs affecting the country’s manufacturing sector and also lead to faster rise in imports that may worsen the country’s trade balance.

India has signed FTAs with South Asian Association for Regional Cooperation (SAARC) and North East Asian countries. Commerce and Industry Minister Anand Sharma has informed that India has a trade surplus of about $12 billion with SAARC countries. The country’s exports have more than doubled after signing of the Indo-Asean Trade in Goods Agreement in 2009, though imports have also grown reasonably, he added. Further, India has a trade surplus with Asean after discounting the imports of essential imports such as edible oils.

Further, during the TERC meeting the government has explored the possibility of having more free trade agreements (FTAs) with various countries. At present, India is negotiating several FTAs with various countries, including Canada, Australia, New Zealand besides the European Union. Meanwhile, the government has been taking initiatives to enhance the country’s exports as rising exports improve the country’s GDP and strengthen its external situation. Indian exports increased by 5.14% to $152.10 billion during April-September, 2013 as against $144.67 billion in the corresponding period of last year.

The CNX Nifty is currently trading at 6,280.85, up by 65.70 points or 1.06% after trading in a range of 6,288.95 and 6,207.35. There were 37 stocks advancing against 13 declining on the index.

The top gainers of the Nifty were Tata Steel up by 4.31%, HCL Tech up by 3.05%, SLLT up by 2.69%, Hindalco Inds up by 2.43% and TCS up by 2.30%. On the flip side, BHEL down by 3.38%, Bank of Baroda down by 2.31%, BPCL down by 1.96%, Power Grid Corporation down by 1.25%, and Cairn India down by 1.05%, were the major loser on the index.

The Asian equity indices were trading in mixed; Straits Times up by 0.03%, KLSE Composite up by 0.03%, Jakarta Composite up by 0.65% and Taiwan Weighted up by 0.02%. While, Shanghai Composite down by 0.34%, , Nikkei 225 down by 0.76%, Hang Seng down by 0.55%, and Seoul Composite down by 0.54%.