Benchmarks edge higher ahead of IIP data

Benchmarks, after hitting intraday low, once again reversed direction in late morning trade with IT stocks leading the gains after Infosys Q3 results beat expectations. Infosys posted a 21 per cent rise in quarterly net profit, beating estimates, as stronger economic growth in Europe and the United States revived demand for outsourcing services. Infosys said profit for the three months ended December 31 was Rs. 2875 crore, compared with Rs. 2369 crore a year earlier. Infosys shares were up nearly 3.5 per cent. Sentiments got boosted as the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.9450, compared with its close of 62.07/08 on Thursday, January 9, 2014.  However, Investors remained on sidelines ahead of the November index of industrial production data to be released later today.

On the global front, Asian equity benchmarks were exhibiting mixed trend at this point of time as release of Chinese trade data that indicates slowing growth momentum in the world’s second-largest economy weighed on investors’ sentiments. Back home, traders were buying, IT, Teck and Capital Goods while, selling was seen in Auto, Metal and Bankex on the BSE. 

The market breadth on BSE remains positive with advances to declines in the ratio of 986:708. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,700 and 6,150 levels respectively. The BSE Sensex is currently trading at 20713.37 up by 114.03 points or 0.55% after trading in a range of 20843.38 and 20625.17. There were 16 stocks advancing against 14 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.32% and Small cap index gained 0.46%.

The top gaining sectoral indices on the BSE were, IT up by 2.38%, Teck up by 2.01%, Capital Goods up by 0.93%, Oil & Gas up by 0.81% and Realty up by 0.61%, while Auto down by 0.74%, Metal down by 0.45%, Bankex down by 0.23% and Power down by 0.10% were the top losers on the sectoral index.

The top gainers on the Sensex were Infosys up by 3.29%, Wipro up by 2.39%, TCS up by 1.69%, Sun Pharma up by 1.32%, RIL up by 1.11%. On the flip side, Mahindra & Mahindra was down by 2.07%, Coal India was down by 1.54%, Bajaj Auto was down by 1.43%, SSLT was down by 1.37%, ICICI Bank was down by 1.20% were the top losers on the Sensex.

Meanwhile, With an aim to enhance foreign investment into the country, the Reserve Bank of India (RBI) has given foreign investors an option to exit their investments by selling their holdings of equity or debt.

As per the modified Foreign Direct Investment (FDI) norms, FDI contracts now have optionally clauses, which allow investors to exit, subject to the conditions of minimum lock-in period and without any assured returns. Earlier, equity shares, compulsorily and mandatorily convertible preference shares or debentures issued to persons resident outside India were not allowed to have any optional clause. FDI is considered crucial for the economic development of the country and India would require around $1 trillion in the 12th five year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

Despite the government's various efforts to increase FDI, foreign investments in the current fiscal have declined, which reflects the need to take more measures to improve the business environment in the country. During April-October period of current fiscal, FDI in India declined by about 15 percent to $12.6 billion crore as against the $14.78 billion recorded in the same period of previous fiscal. The sectors that received large inflows during the first five months of current fiscal include food processing industries ($2.14 billion), services ($1.36 billion), pharmaceuticals ($1.08 billion), automobile ($784 million) and construction development ($699 million). 

The CNX Nifty is currently trading at 6,195.40 up by 27.05 points or 0.44% after trading in a range of 6,202.15 and 6,139.60. There were 28 stocks advancing against 21 stock declines, while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Infosys up by 3.46%, JP Associate up by 2.05%, Wipro up by1.85%, IndusInd Bank up by 1.74% and TCS up by 1.59%. On the flip side, M&M down by 2.17%, Power Grid down by 1.52%, Coal India down by 1.42%, Bajaj-Auto down by 1.41% and UltraTech Cement down by 1.38% were the top losers on the index.

The Asian equity indices were trading mixed; Hang Seng rose 72.04 points or 0.32% to 22,859.37, Jakarta Composite surged 20.63 points or 0.49% to 4,221.85, Nikkei 225 increased 24.12 points or 0.14% to 15,889.25, Straits Times added 3.59 points or 0.11% to 3,149.00 and Taiwan Weighted was up by 21.53 points or 0.25% to 8,536.21. On the flip side, Shanghai Composite declined 5.91 points or 0.29% to 2,021.71, KLSE Composite decreased 0.70 points or 0.04% to 1,827.51 and Seoul Composite was down by 6.23 points or 0.32% to 1,939.66.