Benchmarks witness strong pull back on hopes of IMF loan to Italy

Reacting to a solution to Italy’s debt problems last week, the Indian equity markets have witnessed a strong pull back and made a gap up start with Sensex and Nifty reclaiming their crucial 15,900 and 4,750 mark respectively. There were reports that International Monetary Fund (IMF) is preparing Euro 600 billion loan for Italy in case the debt burden worsens. Even Italian Prime Minister Monti is expected to unveil measures on December 5, 2011. On the domestic front, the benchmarks witnessed terrific trade in morning session on fresh buying by funds and retail investors amid a firm trend in the Asian markets. Moreover, traders will be keenly eyeing the second quarter GDP numbers to be announced later this week on Wednesday, for domestic cues. Meanwhile, metal stocks like Hindalco, Jindal Steel, Sterlite Industries, NMDC, and Nalco in jubilant mood during the trade after copper prices in the international market climbed more than 2%, regaining ground after four weeks of losses. Among the sectoral indices, metal, realty, capital goods, power and banking space provided strength to the markets, while there was no loser on the index. Of the total 1,455 stocks traded, 1,116 advanced, 309 declined and 30 remained unchanged.

The BSE Sensex opened at 15,890.80; about 195 points higher compared to its previous closing of 15,695.43, and has touched a high and a low of 15,998.96 and 15,888.28 respectively.

The index is currently trading at 15,963.89, up by 268.46 points or 1.71%. All the 30 stocks were on advance side on the index.

The overall market breadth has made a strong start with 76.70% stocks advancing against 21.24% declines. The broader indices too were trading with a decent gain; the BSE Mid cap and Small cap indices surged 1.30% and 1.26% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 3.01%, Realty up by 2.43%, CG up by 1.94%, Power up by 1.89% and Bankex was up by 1.70%. While, there were no losers on the index.

The top gainers on the Sensex were Hindalco up by 3.87%, Jindal Steel up by 3.71%, Sterlite Industries up by 3.20%, DLF up by 2.75% and BHEL was up by 2.63%. While there were no losers on the Sensex.

Meanwhile, the Ministry of Finance (MoF) anticipating Foreign Direct Investment of Rs 2,126 crore has approved 18 FDI proposals including Dish TV and MCX. MoF, however, deferred its decision on 16 applications including that of Religare Capital Markets and Cordia International Corp, USA, and it also rejected 11 FDI applications. Post recommendations of Foreign Investment Promotion Board (FIPB) the aforesaid decision were cleared.

The request of 'Unitech Wireless (TN), amounting to Rs 8,250 crore, has been recommended for consideration of Cabinet Committee on Economic Affairs (CCEA),' the finance minister said. The 'Unitech Wireless (TN) is seeking FDI to promote its telecom business including unified access services. FDI proposals envisaging investment of over Rs 1,200 crore and more are referred to CCEA for clearance.

MoF also said that decision on Vodafone-Essar's request of transfer of shares from resident to non-resident to carry out the activities relating to telecommunication could not be taken as more deliberations were needed. 'Vodafone Essar's Rs 2,835 crore application has been recommended for the consideration...after the receipt of inputs from concerned departments,' it added.

Dish TV India’s Rs 980 crore proposal to raise foreign equity to produce telecom equipment and marketing of mobile satellite communications; the request of Multi Commodity Exchange of India (MCX’s) of sale of equity shares via an Initial Public Offering (IPO) to Indians and SEBI registered FIIs; the proposal of Mauritius-based Ventureast Life Fund III LLC, which seeks induction of foreign equity worth Rs 950 crore in a trust were amongst the approved proposals by MoF.

The S&P CNX Nifty opened at 4,769.30; about 59 points higher compared to its previous closing of 4,710.05, and has touched a high and a low of 4,800.65 and 4,766.40 respectively.

The index is currently trading at 4,785.10, higher by 75.05 points or 1.59%. There were 49 stocks advancing against 1 decline on the index.

The top gainers of the Nifty were Hindalco up by 3.92%, Jindal Steel up by 3.02%, Sterlite Industries up by 3.00%, Coal India up by 2.71% and DLF up by 2.70%.

On the flip side, BPCL down by 0.45% remained the lone loser on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was up 3.18 points or 0.13% to 2,383.40, Hang Seng was up 330.60 points or 1.87% to 18,020.08, Nikkei 225 was up 142.95 points or 1.75% to 8,302.96, Straits Times was up 34.53 points or 1.31% to 2,678.46, Seoul Composite was up 33.38 points or 1.88% to 1,809.78 and Taiwan Weighted was up 92.85 points or 1.37% to 6,877.37.

On the flip side, Jakarta Composite was down 11.44 points or 0.31% to 3,625.75.

However, stock markets in Malaysia remained shut in observance of Awal Muharram.