Markets continue firm trade in afternoon session

Indian equity benchmarks continued firm trade in afternoon session on the back of strong global cues following a breakthrough nuclear deal between world powers and Iran. Investors hoped that Iran nuclear deal will lead to fall in oil prices which in turn will narrow country’s CAD and help to keep inflation under check. The sentiments also got a boost as the global consulting firm Ernst & Young (EY) survey mentioned that India has emerged as the most attractive investment destination for overseas investors surpassing neighbouring China and the US mainly on the back of relaxation in Foreign Direct Investment (FDI) norms in order to boost investor’s sentiments. On sector specific movement, bankex was the top gainer on BSE up by nearly 2.58% followed by capital goods, realty and PSU stocks also up by over 1.60%. On stock specific movement, ICICI Bank, L&T and Hero Moto Corp were trading up by over 2.50%, while, Bharti Airtel and Infosys were down by over 0.60% on BSE.

Among other stocks, DIC India was locked in upper circuit of 20% at Rs 283 on NSE after the company informed exchanges that its promoter DIC Asia Pacific Pte has indicated a price of Rs 260 for the proposed delisting. Pfizer surged around 6% after announcing a special interim dividend of 36000% or Rs 360 per share. Wyeth rallied around14% after the board of directors of the pharmaceutical company approved the merger of the company with Pfizer.

On Global front, Asian markets were trading in green mixed Hang Seng up by 0.13% and Shanghai Composite up by 0.20%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,050 and 20,000 levels respectively. The market breadth on BSE was positive, out of 2,089 stocks traded, 1,262 stocks advanced, while 703 stocks declined on the BSE.    

The BSE Sensex is currently trading at 20,484.91 up by 267.52 points or 1.32% after trading in a range of 20,543.54 and 20,326.66. There were 28 stocks advancing against only 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.89%, while Small cap index up by 0.88%.

The gaining sectoral indices on the BSE were Bankex up by 2.58%, Realty up by 2.14%, Capital Goods up by 1.96%, PSU up by 1.67% and FMCG up by 1.56%. While, IT down by 0.14% and Teck down by 0.13% were losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.77%, L&T up by 2.74%, Hero Moto Corp up by 2.68%, SBI up by 2.67% and ONGC up by 2.25%. On the flip side, Bharti Airtel down by 0.94% and Infosys down by 0.64%.

Meanwhile, as per the industry body Assocham, government measures such as slashing imports, augmenting exports and reviving investment in key infrastructure sectors by offering them tax breaks will help to boost Indian economic growth to over 7 percent. Assocham added that besides giving a boost to economic expansion, these measures will also help to enhance supply of goods and services, thereby taming high inflation. The government should implement these measures before the end of current fiscal, it added.

Regarding the infrastructure development, the industry has said that the government should revive investment into key infrastructure sectors such as power, road and port by offering them tax breaks. Assocham recommended exemption from levy of MAT (minimum alternate tax) on the profits earned by infra projects to encourage investments. Delighted over the recently set up the Cabinet Committee on Investments (CCI), which has cleared around 100 mega infrastructure projects, the Assocham suggested setting up a body at the state level on the lines of the CCI at the Centre.

Further, the industry body also expressed need to cut current account deficit (CAD) by reducing imports of gold by setting up a Gold Bank adding that the government or the RBI can set up Gold Bank which can procure and retain gold abroad through offshore foreign currency borrowings, linked to Libor rate.

At present, Indian economy is struggling with downturn and its growth has slowed down to four-year low at 4.4 percent in April-June quarter, 2013 mainly due to declining consumption and investment demand. Further, all macro-economic indicators have deteriorated with current account deficit (CAD) widening to a record high of 4.9 per cent of GDP in the April-June quarter, 2013 and rupee value has also depreciated over 15 percent against dollar in 2013, which has become a cause of concern for the country, as India is structurally an import intensive country.

The CNX Nifty is currently trading at 6,079.95 up by 84.50 points or 1.41% after trading in a range of 6,095.60 and 6,035.95. There were 46 stocks advancing against 4 declining on the index.

The top gainers of the Nifty were BPCL up by 4.40%, ICICI Bank up by 3.94%, JP Associates up by 3.45%, Bank of Baroda up by 2.87% and Axis Bank up by 2.84%. On the flip side, Bharti Airtel down by 0.88%, Infosys down by 0.62%, Lupin down by 0.18% and Grasim down by 0.13% were the major losers on the index.

The Asian equity indices were trading in green; Taiwan Weighted up by 0.87%, Seoul Composite up by 0.61%, KLSE Composite up by 0.56%, Nikkei 225 up by 1.38%, Hang Seng up by 0.13%, Shanghai Composite up by 0.20%, Jakarta Composite up by 0.11% and Straits Times up by 0.26%.