Markets extends last session’s rally with a gap-up start

The energized markets after a long weekend have made a strong start on Monday morning, extending their last session’s rally with extra vigor after Chinese Communist Party signaled a bigger focus on fiscal concerns. Though, tailing the gains in the regional markets a good start was expected but domestic markets got a strong gap-up beginning with rate sensitives taking the lead after the RBI governor said that several factors, besides inflation, will determine the stance of its policy review. Traders were also getting support with the strength in rupee against dollar, which moved higher on RBI’s announcement of purchasing bonds worth Rs 8,000 crore this week under the open market operations (OMO) to inject liquidity in the system. Back on street, while all the indices are in green, banking, realty and capital goods have taken the lead. The IT and technology sector that was initially in somber mood on rupee strength, too have moved higher. Broader markets were also moving neck-to-neck with the benchmarks.

The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 933 shares on the gaining side against 332 shares on the losing side while 37 shares remain unchanged.

The BSE Sensex opened at 20570.59; about 171 points higher compared to its previous closing of 20399.42, and has touched a high and a low of 20701.03 and 20570.59 respectively. The index is currently trading at 20700.42, up by 301.00 points or 1.48%. There were 29 stocks advancing against 1 decline on the index.

The overall market breadth has made a strong start with 71.66% stocks advancing against 25.50% declines. The broader indices too were trading in green; the BSE Mid cap index up by 1.03% and Small cap index up 0.90%. 

The top gaining sectoral indices on the BSE were, Bankex up by 2.45%, Realty up by 1.88%, Capital Goods up by 1.87%, IT up by 1.67% and Teck up by 1.59%, while there were no losers on the sectoral index.

The top gainers on the Sensex were ICICI Bank up by 2.83%, HDFC Bank up by 2.70%, L&T up by 2.37%, Wipro up by 2.13% and Tata Steel up by 2.05%. On the flip side, Coal India down by 0.62% was the lone loser on the Sensex.

Meanwhile, in a move to enhance country’s service exports, the government would soon come out with an action plan for five major service sectors such as entertainment, logistics, IT, tourism and healthcare. The move is aimed to boost exports from these sectors as the commerce ministry is of the view that exports basket of India's service sector is not well diversified, neither in terms of services categories nor in terms of the markets they serve. The ministry wants to enhance service exports through diversification and tapping of new markets.

Commerce Secretary S R Rao has said that besides IT and telecommunication sectors, there is a need to focus on sectors such as healthcare, tourism and financial services as well. In order to suggest steps to boost services exports, the ministry’s action plan will have some provisions, which require approval from cabinet and parliament. The commerce ministry has also organised a two day conclave during which experts have given their opinions on different sectors. The move is helping the ministry in preparing the action plan. Recently, the government has asked the service exporters to explore new markets such as Africa as the share of India's services sector in global trade is still very low. Furthermore, the government has also taken a initiative in order to properly capture the data on the services sector, a move which will help frame policies on the sector.

Indian Services sector contributes around 60 percent to the GDP, 35 percent to employment and 40 percent to exports. During 2012-13, Indian service sector exports stood at $146 billion. Further, the sector accounted for over 50 percent of Foreign Direct Investment (FDI) into the country. Meanwhile, FDI into Indian 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 amid rising concerns over the declined outsourcing business in India.

The CNX Nifty opened at 6,111.05; about 54 point higher as compared to its previous closing of 6,056.15, and has touched a high and a low of 6,143.60 and 6,110.40 respectively. The index is currently trading at 6,140.70, up by 84.55 points or 1.40%. There were 46 stocks advancing against 3 declines on the index and one stock remains unchanged.

The top gainers of the Nifty were JP Associate up by 2.75%, ICICI Bank up by 2.60%, HDFC Bank up by 2.59%, Axis Bank up by 2.38% and Tata Steel up by 2.34%. On the flip side, Coal India down by 0.78% Tata Motors down by 0.32% and Dr. Reddy's Laboratories down by 0.11% were the top losers on the index.

The Asian equity indices were trading in green; Shanghai Composite surged by 29.78 points or 1.39% to 2,165.61, Hang Seng zoomed by 500.32 points or 2.17% to 23,532.47, Jakarta Composite was up by 56.82 points or 1.31% to 4,392.65, KLSE Composite added 4.50 points or 0.25% to 1,794.37, Nikkei 225 gained 34.93 points or 0.23% to 15,200.75, Straits Times was up by 9.99 points or 0.31% to 3,211.07, Seoul Composite gained 6.64 points or 0.36% to 2,012.27 and Taiwan Weighted gained 24.29 points or 0.30% to 8,201.41.