Indian equities hover near day's high; IT, FMCG and Auto helps market to rally

Indian equities continued its encouraging trade managing to lock gains and move up higher hovering near the highest point of the day in the late afternoon session. In the fight between bulls and bears to gain control over the market, bulls have overtaken bears giving them no chance to enter the market with bulls gaining strength and marking its rally to a new high. Traders were seen piling up position in IT, FMCG and Auto sector while selling was witnessed in HealthCare, Consumer Durables and PSU sector.

Wipro, HCL Technologies, Infosys and TCS from IT counter were trading firm in green pulling the markets up. ITC and HUL from FMCG space were trading with gain of around more than a percent helping markets inch up higher. Bajaj Auto, Tata Motors, Maruti, M&M and Hero MotoCorp from Auto sector were up helping markets drive up. Index heavyweight RIL was trading firm with gain of more than one percent giving the much needed support for markets to rally. SAIL, Sterlite, Hindalco, Tata Steel and Jindal Steel from Metal pack were firm in green pulling the markets in green. However, Coal India, Bharti Airtel, NTPC, BPCL and Sun Pharma were seen trading in red exerting pressure on the markets.

In the scrip specific development, Dewan Housing Finance surged after its fund management arm reportedly launched its second real estate fund to tap demand in the middle-income housing segment in non-metro cities. Natco Pharma was up trading firm on reports that on December 05, 2011 the promoter of Sun Pharma - Dilip S. Shanghvi has bought 275,000 shares of Natco Pharma. Pantaloon Retail (India) and Future Capital were firm in green after Pantaloon Retail denied newspaper report that it had agreed to sell its stake in group firm Future Capital Holdings to Deccan Chronicle Holdings.

On the global front, all Asian markets were seen trading in green barring KLSE Composite while the European markets were trading in green on optimistic note. Investors globally remained optimistic as worries over the rating agency S&P’s warning of mass EU downgrade waned and made way for cautious optimism that Euro-zone policymakers will deliver a comprehensive plan to avert the region's onerous debt crisis at a summit later this week. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 5,100 and 17,000 levels, respectively. The market breadth on the BSE was in favour of advances in the ratio of 1474:1183 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 16,988.25 up by 182.92 points or 1.09% after trading as high as 17,003.71 and as low as 16,781.62. There were 24 stocks advancing against 6 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index gained 0.47% while Small cap rose 0.49%.

On the BSE sectoral space, IT up 1.87%, FMCG up 1.46%, Auto up 1.20%, Realty up 1.10% and TECk up 1.00% were the major gainers while HealthCare down 0.66%, Consumer Durables down 0.39% and PSU 0.13% were the only losers in the space.

Wipro up 3.52%, JP Associates up 3.05%, Sterlite Industries up 2.69%, Tata Power up 2.57% and Hindalco up 2.53% were the major gainers on the Sensex, while Coal India down 2.87%, NTPC down 2.33%, Bharti Airtel down 2.06%, Sun Pharma down 1.24% and Cipla down 1.21% were the major losers in the index.

Meanwhile, Prime Minister Manmohan Singh by expressing concern over the imports of telecom equipment said, large imports of telecom equipment is a matter of concern in the light of India's strategic and security interests.

He said, ‘while telecommunication networks could be set up with imported equipment, it becomes a concern when a large telecom network in a country like ours requires continuous large imports. Keeping in view the growth potential for the manufacture of telecom equipment in our country and our strategic and security interests, there is an urgent need to give impetus to domestic research and development and manufacturing in the telecom sector.’

'A thriving telecom manufacturing industry would have a large positive impact on many other elements of the electronics manufacturing value chain, apart from generating other benefits like additional employment,' Singh added.

Prime Minister further said that the government is committed to doing all it can to ensure successes on the future of telecom sector. 'We will work closely with all stakeholders to build upon what we have achieved. I would like to take this opportunity to assure all of you that our government will continue to formulate forward looking policies that will encourage further growth of the telecom sector.’

Singh is hopeful of achieving the objective of connecting all village panchayats by broadband in coming two years. Recently, the government has approved a scheme for setting up of a National Optical Fibre Network (NOFN).

The cost of the initial phase of this scheme is estimated at Rs 20,000 crore. An equal amount is also envisaged to be invested by the private sector to complement the NOFN infrastructure by providing access services to the individual users. The scheme is expected to generate a variety of benefits to the rural people like better access to education, better access to health and provision for agricultural services.

On the industry’s concern about the new telecom policy, Singh said, 'I am aware of some concerns of the telecom industry regarding government policies in the telecom sector. I wish to reassure industry of the government's full commitment to sustaining growth, creativity and enterprise in this vitally important sector of our economy.'

The S&P CNX Nifty is currently trading at 5,094.35, higher by 55.20 points or 1.10% after trading as high as 5,099.25 and as low as 5,032.25. There were 40 stocks advancing against 10 declines on the index.

The top gainers on the Nifty were RCOM up 3.82%, Wipro up 3.68%, JP Associates up 3.18%, HCL Tech up 3.07% and SAIL up 3.05%.

Coal India down 3.14%, Bharti Airtel down 2.50%, NTPC down 2.36%, BPCL down 1.79% and Sun Pharma down 1.53% were the major losers on the index.

Asian markets traded on an encouraging note, Shanghai Composite gained 0.29%, Hang Seng climbed 1.58%, Jakarta Composite rose 0.59%, Nikkei 225 soared 1.71%, Straits Times surged 1.52%, Seoul Composite ascended 0.87% and Taiwan Weighted jumped 1.10%. On the flipside, only KLSE Composite slipped 0.38%.

The European markets were trading in green with, France’s CAC 40 jumped 1.62%, Germany’s DAX surged 1.61% and Britain’s FTSE 100 ascended 1.10%.