Markets trade jubilantly after bouncing back from seven days fall

Indian equity markets are rejoicing a mix of positives from both the global and domestic fronts and after a good gap-up start are keeping their momentum going in early trade. The indices took lead from the overnight surge in the US markets where two of the major bourses touched their all time closing high, later the Asian peers too followed the suit and moved higher rejoicing the testimony of Janet Yellen, defending quantitative easing that signaled stimulus will be maintained until the US economy improves and making a strong case for the Indian markets. On the domestic front, not only the bond and money market soothed with the RBI governor’s assertion that the current account deficit (CAD) in the current fiscal will come down to $56 billion, less than 3 per cent of GDP, and lower than the government estimate of $70 billion and $88 billion reported last year but the equity markets too came out of their lull. Back on street, the jubilation was high with across the board buying, however the rate sensitives like banking, capital goods, auto and realty have taken the lead after RBI Governor Raghuram Rajan said that any change in benchmark interest rate in its next month's monetary policy review will depend upon the price situation and other macro-economic factors.

The broader indices too were trading up, while the market breadth on the BSE was positive; there were 869 shares on the advancing side against 260 shares on the losing side while 42 shares remain unchanged.

The BSE Sensex opened at 20351.39; about 156.99 points higher compared to its previous closing of 20194.40, and has touched a high and a low of 20496.57 and 20348.27respectively. The index is currently trading at 20468.28, up by 273.88 points or 1.36%. There were 26 stocks advancing against 4 declines on the index.

The broader indices too trading jubilantly; with BSE Mid cap index gaining 1.05% and Small cap index trading higher by 1.04%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 2.67%, Bankex up by 2.58%, Auto up by 2.27%, Realty up by 2.09% and Power up by 1.45%, while Health Care down by 0.20%, Information Technology down by 0.20%, Information Technology down by 0.24%, TECk down by 0.63%, Fast Moving Consumer Goods down by 0.66% and Consumer Durables down by 1.06%.

The top gainers on the Sensex were Tata Motors up by 3.87%, ICICI Bank up by 3.64%, L&T up by 3.45%, Bharti Airtel up by 2.77%, Tata Power up by 2.12%. On the flip side, Coal India down by 2.32%, Cipla down by 1.02%, TCS down by 0.65% and Sun Pharma down by 0.24% were the top losers on the Sensex.

Meanwhile, in an attempt to calm nerves over Rupee’s depreciation in the past few days, Reserve Bank of India’s governor, Raghuram Rajan, stated that though majority of dollar demand from the oil marketing companies was back in the market, but on the same time also underscored that it was in no rush to taper its dollars swap window to these companies.

Further providing relief, he cited that India’s Apex Bank would choose the most appropriate solution to settle dollar swaps with oil companies when the time comes. While, the governor cited the option of rolling over some portion of the oil company dollar swaps if market conditions were unstable, he also underscored that these companies could return the dollars borrowed under the swap facility in Rupee terms.  This meant that Oil Marketing Companies, without causing any disturbance to the forex markets could net off their transactions.

Additionally, referring to the recent decline in the value of rupee, Rajan pointed that there was no fundamental reason for volatility in the exchange rate. Also in attempt to shore-up currency, the governor highlighted that RBI estimates current account deficit (CAD) in 2013-14 to be much lower at $56 billion than the quantum projected earlier.  Although, the government projected the CAD in the current fiscal to stand at $70 billion, the same was revised downwards to $60 billion by Finance Minister P Chidambaram on back of declining gold imports and recovery in exports.

Besides, the governor also took a heart from the narrowing trade deficit numbers and slowing of core inflation, but he also expressed worries over high food inflation by terming it as “cause for worry for central bank”. Meanwhile, delighting the bond markets, the governor announced that central bank in order to ease liquidity in the system, would buy Rs 8,000 crore of bonds from the secondary market, under the central bank’s open market operations scheme

The CNX Nifty opened at 6,037.00; about 47.40 points higher as compared to its previous closing of 5,989.60, and has touched a high and a low of 6,081.60 and 6,036.65 respectively.

The index is currently trading at 6,074.95, up by 85.35 points or 1.42%. There were 44 stocks advancing against 6 declines on the index.

The top gainers of the Nifty were Axis Bank up by 4.99%, Tata Motors up by 3.93%, IndusInd Bank up by 3.79%, ICICI Bank up by 3.52% and JP Associates up by 3.47%. On the flip side, Coal India down by 2.17%, HCL Technologies down by 0.96%, Cipla down by 0.80%, TCS down by 0.60% and Cairn India down by 0.50% were the top losers on the index.

The Asian equity indices were up in green; Shanghai Composite up by 9.44 points or 0.45% at 2,097.38 , Nikkei 225 up by 356.82 points or 0.45% at 14,923.98, Seoul Composite up by  11.53 points or 0.59% at 1,975.09, Taiwan Weighted up by 44.36 points or 0.55% at trade at 8,148.62, Hang Seng up by 196.61 points or 0.88% at 22,660.44, KLSE Composite up by 5.17 points or 0.29% at 1,787.66, Jakarta Composite was up by 68.98 points or 1.60% at 4,370.87, and Straits Times was up by 27.30 points or 0.86% at 3,194.04.