Benchmarks make gap-up opening as investors cheer BJP victory

Indian equity benchmarks have made a gap-up opening and hit record high in early deals with frontline gauges surpassing their crucial 6,350 (Nifty) and 21,300 (Sensex) levels on the back of strong performance of Bharatiya Janata Party (BJP) in assembly elections in Rajasthan, Delhi, Madhya Pradesh and Chattisgarh. The poll results lived up to the street’s expectations of a win for the pro-growth BJP, which could also prompt foreign fund managers to bet on the return of the NDA-led coalition at the Centre after the Lok Sabha elections next year. Sentiments also remained boosted on data showing that foreign funds remained buyers of Indian stocks on December 6, 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 863.77 crore on Friday, 6 December 2013, as per provisional data from the stock exchanges.

Global cues too remained supportive with, the US markets ending higher on Friday on the back of better than expected monthly jobs report. The report showed that non-farm payroll employment rose by 203,000 jobs in November following a revised increase of 200,000 jobs in October. Moreover, most of the Asian equity markets are trading in the green, led by Japanese Nikkei, up by around two percent as an upbeat U.S. jobs report hurting the yen and triggering some hectic buying at several counters.

Back home, sentiments also remained up-beat after Indian rupee rallied on Monday after the country’s main opposition party, BJP, which is widely seen by investors as being more business friendly, performed well in state elections. The partially convertible rupee was trading at 61.04/05 per dollar, after hitting as high as 60.84 to the dollar at the open, its strongest level since August 12. Meanwhile, all the sectoral indices on the BSE were trading in the green with Banking and Capital Goods segments gaining the most. Realty, power, oil and gas, metal and consumer durables too were trading with significant gains. The broader indices too were trading with traction, while the market breadth on the BSE was positive; there were 934 shares on the gaining side against 355 shares on the losing side while 42 shares remain unchanged.

The BSE Sensex opened at 21416.67; about 420 points higher compared to its previous closing of 20996.53, and has touched a high and a low of 21483.74 and 21303.65 respectively. The index is currently trading at 21364.24, up by 367.71 points or 1.75%. There were 29 stocks advancing against just 1 decline on the index.

The overall market breadth has made a strong start with 70.09% stocks advancing against 26.46% declines. The broader indices too were trading in green; the BSE Mid cap index up by 0.84% and Small cap index up 0.62%. 

The top gaining sectoral indices on the BSE were, Bankex up by 3.60%, Capital Goods up by 2.76%, Realty up by 1.41%, Power up by 1.58% and Oil & Gas up by 1.89%, while there were no losers on the sectoral index.

The top gainers on the Sensex were ICICI Bank up by 5.11%, L&Tup by 3.81%, ONGC up by 3.33%, HDFC Bank up by 3.27% and SSLT up by 3.07%. On the flip side, Hindustan Unilever was down by 0.21% was the sole loser on the Sensex.

Meanwhile, concerned over the growing raw material imports for electronics and telecommunications sectors, Prime Minister Manmohan Singh has expressed the need to develop a strong domestic manufacturing base in electronics and telecommunications in order to mitigate burden of growing imports for these sectors. India is expected to import electronics products worth around $300 billion, which will be more than the value of the country's imports of petroleum products.

Highlighting the need to avoid the situation where the country can face difficulties in financing these huge imports, Prime Minister said that India should have manufacturing facilities that help in balancing trade in electronics products and are a part of global supply chains. Talking about policies in these sectors, Manmohan Singh added that National Telecom Policy 2012 has brought clarity on number of issues in the sector and the Department of Telecommunications has already started issuing Unified Licenses and will soon issue the Merger and Acquisition guidelines. Manmohan Singh has suggested the Telecom Ministry's plan to provide 3G connectivity with computers in order to modernise systems and revolutionize the delivery of education.

The government has noted that it has left no stone unturned in trying to create attractive and level playing field for telecom and electronics segment. It has also brought in clarity in the entire Information Communication Technology and Electronics (ICTE) sector by introducing new policies.

The CNX Nifty opened at 6,415.00; about 155 point higher as compared to its previous closing of 6,259.90, and has touched a high and a low of 6,415.25 and 6,353.35 respectively.

The index is currently trading at 6,372.20, up by 112.30 points or 1.79%. There were 47 stocks advancing against 3 declines on the index.

The top gainers of the Nifty were ICICI Bank up by 5.07%, PNB up by 4.37%, Bank of Baroda up by 4.28%, L&T up by 3.84% and ONGC up by 3.52%. On the flip side, NMDC down by 0.49%, Lupin down by 0.22% and Hindustan Unilever down by 0.04% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 67.62 points or 0.28% to 23,810.72, Jakarta Composite surged 26.03 points or 0.62% to 4,206.81, KLSE Composite increased 11.28 points or 0.62% to 1,838.23, Nikkei 225 soared 281.97 points or 1.84% to 15,581.83, Straits Times added 1.80 points or 0.06% to 3,115.97, Seoul Composite gained 20.56 points or 1.04% to 2,000.97 and Taiwan Weighted was up by 80.31 points or 0.96% to 8,448.03.

On the flip side, Shanghai Composite was down by 1.91 points or 0.09% to 2,235.20.