Benchmarks edge higher on account of buying in IT sector

Benchmarks have recovered from early lows and reached near day’s high led by IT and bank shares. Investors added IT stocks to their portfolio after the sector suffered a selloff in Friday's trade. The market beating results from Wipro, announced after the market hours on Friday, boosted sentiment in IT stocks. Sentiments also got some support on report that FII’s remained on their buying spree and increased their stake in major companies in the December quarter. However,  gains on up - side  remained capped after Indian rupee was trading lower on global dollar strength, with the pair at 61.58 per dollar versus its Friday’s close of 61.54/55 per dollar.

On the global front, most of the Asian equity indices were trading in the negative terrain at this point of time as Chinese gross domestic product (GDP) expanded 7.7% last year, its slowest rate in 14 years at a time of concern about the strength of the world’s number two economy. Growth for the December quarter also came in at 7.7%, slowing from 7.8% in the previous three months. Back home, traders were buying, IT, Teck and Auto while, selling was seen in Oil & Gas on the BSE. Public sector oil marketing companies edging lower in early deals after Oil Minister M Veerappa Moily has announced that the quota of subsidised cooking cylinders will be hiked to 12 from 9 per household. Increasing the limit to 12 would result in an additional fuel subsidy burden of Rs 3,300 crore-5,800 crore for the government.

The market breadth on BSE remains positive with advances to declines in the ratio of 1152:693. BSE Sensex and NSE Nifty were comfortably trading near their psychological 21,200 and 6,250 levels respectively. The BSE Sensex is currently trading at 21185.75 up by 122.13 points or 0.58% after trading in a range of 21201.52 and 21001.13. There were 22 stocks advancing against 8 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.58% and Small cap index gained 0.79%.

The top gaining sectoral indices on the BSE were, IT up by 1.57%, Teck up by 1.35%, Auto up by 1.00%, FMCG up by 0.75% and Bankex up by 0.64%, while Oil & Gas down by 0.59% were the only loser on the sectoral index. 

The top gainers on the Sensex were Wipro up by 4.44%, TCS up by 2.45%, ITC up by 1.46%, Tata Motors up by 1.41%, and Hindalco Inds up by 1.26%. On the flip side, RIL was down by 1.06%, Axis Bank was down by 0.89%, Sun Pharma was down by 0.70%, SSLT was down by 0.67% and Tata Steel was down by 0.57% were the top losers on the Sensex.

Meanwhile, India’s iron ore exports fell by 28.16 per cent to 11.17 million tonnes (mt) during the April-December’ 2013 as against the 15.55 mt in the corresponding period last fiscal as the prevailing regulatory concerns are impacting the performance of country’s mining sector. The gloom in the sector's exports is expected to continue as long as government policy does not change.

Over the last few years, India’s iron ore exports have been hurt badly due to mining ban in Goa and Karnataka leading to drastic fall in domestic production. Furthermore, the rise in export duty to 30 per cent on iron ore including lumps and fines has also impacted the sector. Owing to the mining bans on iron ore in top producing states of Karnataka and Goa, India is currently exporting low grade iron ore (or fine) from Odisha, Jharkhand, Rajasthan and Madhya Pradesh. The bans, put in place as the government tried to clamp down on illegal mining, have cut the iron ore exports by around 85 percent, or 100 million tonnes, over the past two years. It has also reduced foreign exchange earnings by more than $17 billion in the same period. Further, India’s position in global iron ore exports has slipped to tenth from 3 earlier.

India’s total iron ore production in the current fiscal is likely to be around 140 mt, almost the same level as last year. Meanwhile, to improve the domestic iron ore production and exports, the government has planned to invite bids for about 15 million metric tonnes of iron ore inventory, which will be offered through online sales starting next month.

The CNX Nifty is currently trading at 6,299.15 up by 37.50 points or 0.60% after trading in a range of 6,304.05 and 6,243.35. There were 34 stocks advancing against 15 stock declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Wipro up by 4.32%, TCS up by 2.31%, HCL Tech up by 2.29%, ITC up by 1.54% and HDFC Bank up by 1.52%. On the flip side, NMDC down by 1.34%, Reliance down by 1.07%, BPCL down by 1.03%, Grasim down by 0.84%, and Axis Bank down by 0.81% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 8.48 points or 0.42% to 1,996.47, Hang Seng decreased 133.32 points or 0.51% to 23,014.76, KLSE Composite dipped 4.09 points or 0.23% to 1,808.92, Nikkei 225 shed 99.17 points or 0.63% to 15,635.29 and Straits Times was down by 10.80 points or 0.34% to 3,136.53. On the flip side, Jakarta Composite rose 16.28 points or 0.37% to 4,428.51, Seoul Composite increased 5.39 points or 0.28% to 1,949.87 and Taiwan Weighted was up by 27.56 points or 0.32% to 8,623.56.