Benchmarks build on gains; escalates to-day’s high on sustained buying activities

Benchmark equity indices soaring day’s high, have almost doubled their gains in the afternoon deals as investors turning bullish on equities, shopped for some more beaten down but fundamentally strong bets ahead of start of European markets, which is likely to be positive. Escalating day’s high point, both, Sensex and Nifty, are trading above the crucial 20,850 and 6,200 levels respectively, with gains of over 3 /4 th of a percent.

Meanwhile, broader indices, too adding further ground, are trading with gains of close to a percent.  However, mixed regional counterparts could limit further acceleration of Indian equity markets. In the global market, Chinese stocks fell Friday, as local money market rates hit a six-month high, while the rest of Asia was mixed as regional investors continued to digest the Fed's decision to cut back its stimulus measures.

Closer home, the secular up-move of barometer gauges was mainly on account of across the board buying activities, nevertheless prominent gainers were stocks from Oil & Gas, Auto and Information Technology counters. Oil & Gas pivotal moved higher, bolstered by gains of Reliance Industries after CCEA allowed the company to sell KG-D6 block gas at a higher price with effect from April 2014. Meanwhile, Information Technology stocks yet again were up on Rupee depreciation for fourth consecutive session. Additionally, fertilizer stocks RCF, Coromandel International, National Fertiliser and Zuari Agro, too gained momentum on CCEA’s decision of revising the prices of natural gas, which is an input to manufacturing fertiliser and electricity generation, every quarter based on the average of the past four quarters, but with a gap of one quarter.  On the flip side, Capital Goods and Fast Moving Consumer Goods counters, baring the positive trend, were the only losers. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1271:747; while 131 shares remained unchanged.

The BSE Sensex is currently trading at 20888.18, up by 179.56 points or 0.87% after trading in a range of 20912.52 and 20745.94. There were 24 stocks advancing against only 6 stocks declining on the index.

The broader indices too gained additional ground; with BSE Mid cap and Small cap indices trading up by 1.35% and 0.99% respectively.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.99%, Auto up by 1.70%, Information Technology up by 1.42%, Realty up by 1.26% and TECk up by 1.11%. While, Capital Goods down by 0.07% and FMCG down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.27%, RIL up by 2.17%, ONGC up by 2.14%, Maruti Suzuki up by 2.00% and Hero Motocorp up by 1.86%. On the flip side, Sun Pharma down by 1.35%, SSLT down by 1.02%, L&T down by 0.67%, Bharti Airtel down by 0.54% and ITC down by 0.27% were the top losers on the index.

Meanwhile, in a move to enhance the capital inflows into the country, the Securities and Exchange Board of India (SEBI) has allowed the overseas entities to use complex multi-fund structures such as multi-class share vehicle (MCV) or protected cell companies (PCCs) in order to invest in India. SEBI has noted that overseas entities can use complex multi-fund structures, if they want such models owing to the regulations in their home country and are ready to provide details of actual beneficiary of funds.

The market regulator has taken the initiative to relax the rules after representations made by the investors that necessary safeguards can be put in place against any abuse of such structures. SEBI in its circular highlighted that an FII seeking registration in India with MCV and PCCs structures would not be considered to have an 'opaque' structure if it is required by its regulator. This would be subject to certain conditions, including entities being regulated by their home jurisdiction, each fund/sub-fund of the entity satisfying broad based criteria and the entity should provide information regarding its beneficial owners as and when sought by SEBI.

Amid rising fears over the possible round-tripping or money laundering activities, SEBI, in 2010, had prohibited foreign entities using complex structures like PCCs and MTV. PCCs designed entities might comprise of various cells, having funds of various investors, in such a manner that there is legal segregation and protection of assets and liabilities for each cell.

The CNX Nifty is currently trading at 6,216.40, up by 49.75 points or 0.81% after trading in a range of 6,222.10 and 6,170.35. There were 41 stocks advancing against 9 declining on the index.

The top gainers of the Nifty were Cairn India up by 2.57%, Wipro up by 2.41%, Bank of Baroda up by 2.40%, Reliance up by 2.25% and ONGC up by 2.12%. On the flip side, Sun Pharma down by 1.47%, SSLT down by 1.15%, Grasim down by 0.85%, L&T down by 0.82% and NMDC down by 0.66% were the major losers on the index.

The Asian equity indices were trading mixed; Nikkei 225 up by 0.07%,Seoul Composite up by 0.39%, Taiwan Weighted up by 0.01%, Straits Times up by 0.54%. While, Hang Seng down by 0.35 %, Jakarta Composite down by 1.11%, KLSE Composite down by 0.33%, and Shanghai Composite down by 1.62%.