Benchmarks trade jubilantly ahead of GDP data

Continuing their previous session’s jubilation, Indian equity benchmarks are trading with a gain of over a percentage point, surpassing their crucial 6,150 (Nifty) and 20,750 (Sensex) levels as investors hoping for an improvement in economic growth during the July-September quarter purchased stocks in frontline blue chip counters. Experts are estimating the Indian GDP to have expanded by about 4.5 percent in the July-September period on the back of rising exports and a good monsoon. Some support also came in from report of wide roll-overs to the December series. The market wide roll-over was 82.41% versus 80.45% previous month, highest in the last ten months. The market sentiment was also boosted by data showing that foreign funds remained net buyers of Indian stocks November 28, 2013. Foreign institutional investors (FIIs) bought shares worth net Rs 102.91 crore on Thursday, as per provisional data from the stock exchanges.

On the global front, the US markets remained closed overnight unable to give any cues to the other global markets. Moreover, Asian equity benchmarks were exhibiting lacklustre trades at this point of time with investors trading cautiously amid a lack of fresh triggers. Japanese Nikkei declined around half a percent with investors indulging in some profit taking after the previous session’s strong rally.

Back home, sentiments continued to remain up-beat after Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said that India will become the third-biggest economy in the world by 2030. All the sectoral indices on the BSE were trading in the green with banking, public sector undertaking and realty segments gaining the most. Power, metal, fast moving consumer goods, oil and gas and healthcare too were trading with significant gains. The broader indices were trading with traction, while the market breadth on the BSE was positive; there were 882 shares on the gaining side against 288 shares on the losing side while 54 shares remain unchanged.

The BSE Sensex opened at 20558.93; about 24 points higher compared to its previous closing of 20534.91, and has touched a high and a low of 20780.08 and 20558.93 respectively.

The index is currently trading at 20779.93, up by 245.02 points or 1.19%. All the 30 stock were advancing on the index.

The overall market breadth has made a strong start with 72.06% stocks advancing against 23.53% declines. The broader indices too were trading in green; the BSE Mid cap index up by 0.84% and Small cap index up 0.57%. 

The top gaining sectoral indices on the BSE were, Bankex up by 1.79%, PSU up by 1.40%, Realty up by 1.39%, Power up by 1.25% and Metal up by 1.24%, while there were no losers on the sectoral index.

The top gainers on the Sensex were Cipla up by 2.37%, SSLT up by 2.34%, ICICI Bank up by 2.31%, Gail India up by 1.93% and BHEL up by 1.89%, while there were the no losers on the Sensex.

Meanwhile, The Department of Industrial Policy and Promotion (DIPP) is expected to propose a new policy on foreign direct investment (FDI) in the pharma sector. As per the new DIPP’s proposal, 100 percent FDI would be allowed in brown-field projects, subject to government's approval. However, for brown-field project deals with rare facilities and critical verticals, only 49 percent FDI would be allowed with government's approval. Furthermore, DIPP also noted that 25 per cent of the total investment in the brown-field projects should be used in Research and Development (R&D) activities.

Meanwhile, the DIPP’s proposal has brought disappointment to Finance ministry, which stated that proposed 49 per cent FDI cap on projects dealing with rare facilities would discourage potential investors. Foreign Direct Investment (FDI) in the pharma sector grew by more than double to $1.07 billion during April-August’ 2013 as compared to $487 million during the same period last year. During the period 2000-2013, India's pharmaceutical sector attracted $11.39 billion in foreign investment, which was around 6 percent of its total $200 billion foreign investment inflows.

On the other hand, the DIPP and health ministry are of the view that in the absence of such policy, affordability and accessibility of Indian generic drugs would be highly impacted. Industry's generic segment accounts for the largest chunk of the sector, with a share of around 72 percent in the total industry revenue. The Indian generic drug market grew at a CAGR of around 17 per cent between 2010-11 and 2012-13 mainly on the back of rising exports of generic drug due to their low cost.The CNX Nifty opened at 6,103.90; about 12 point higher as compared to its previous closing of 6,091.85, and has touched a high and a low of 6,169.65 and 6,103.80 respectively.

The index is currently trading at 6,162.85, up by 71.00 points or 1.17%. All the 50 stocks were trading in green on the index.

The top gainers of the Nifty were NMDC up by 3.21%, SSLT up by 2.51%, Cipla up by 2.38%, JP Associate up by 2.33% and ICICI Bank up by 2.30%, while there were the no losers on the index.

The Asian equity indices were trading mixed; KLSE Composite slipped 0.49 points or 0.03% to 1,807.11, Nikkei 225 declined 61.71 points or 0.39% to 15,665.41, Straits Times decreased 16.22 points or 0.51% to 3,170.15 and Seoul Composite was down by 3.24 points or 0.16% to 2,042.53.

On the flip side, Shanghai Composite rose 0.66 points or 0.03% to 2,220.04, Hang Seng surged 74.99 points or 0.32% to 23,864.08, Jakarta Composite added 0.37 points or 0.01% to 4,234.30 and Taiwan Weighted was up by 37.71 points or 0.45% to 8,400.14.