Markets continue to trade firm amid buying in metal, healthcare stocks

Indian equity benchmarks continued  to trade firm in afternoon session amid strong global cues and buying witnessed in frontline blue chip stocks including Tata Steel, SSLT and Sun Pharma among others. Sentiments got some support as FIIs, snapping previous five-day selling streak, bought Rs 10.75 crore worth of Indian shares in the previous session. Further, SEBI's move for specifying a circuit limit of up to 20% for all publicly traded stocks to protect stocks against excessive volatility risks also added to the optimistic sentiments. Metal was the top gaining index on BSE up by around 2.22% followed by healthcare and realty both up by over 1.60%. On stock specific movement, Tata Steel, SSLT and Sun Pharma were trading up by over 3.00% while, Bharti Airtel, ITC and Coal India were trading down by over 0.90% on BSE.

Ambuja Cements was trading higher by over 3% at around Rs 161 after reporting 49% yoy growth in standalone net profit at Rs 317 crore for Q3FY14 mainly on account of tax credit of Rs 100 crore relating to earlier years. Granules India has surged around 8% to Rs 286 on back of heavy volumes on the bourses. Furthermore, Aurobindo Pharma has rallied around 6% to Rs 525 after reporting over four-fold jumped in consolidated net profit at Rs 417 crore for Q3FY14 on the back of strong operational income. Patel Engineering has also rallied 9% to nearly Rs 65.20 after the company said it has bagged new construction projects amounting to Rs 1,110 crore.

On global front, Asian equity indices were trading in green with Nikkei 225 up by 2.06%, Straits Times up by 0.85% after a strong rally on the US markets. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,000 and 20,400 levels respectively. The market breadth on BSE was positive, out of 2,160 stocks traded, 1,276 stocks advanced, while 754 stocks declined on the BSE.

The BSE Sensex is currently trading at 20,407.37 up by 96.63 points or 0.48% after trading in a range of 20,450.51 and 20,363.58. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.83%, while Small cap index up by 0.70%.

The gaining sectoral indices on the BSE were Metal up by 2.22%, Healthcare up by 1.77%, Realty up by 1.68%, Power up by 0.89% and Capital Goods up by 0.74%. While, FMCG down by 0.54% was the only losing index on BSE.   

The top gainers on the Sensex were Tata Steel up by 4.25%, SSLT up by 3.27%, Sun Pharma up by 3.09%, Tata Power up by 1.73% and Dr. Reddy’s Lab up by 1.70%. On the flip side, Bharti Airtel down by 1.98%, ITC down by 0.96%, Coal India down by 0.94%, M&M down by 0.66% and TCS down by 0.57%.

Meanwhile, concerned over the falling trade volume after imposition of Commodity Transaction Tax (CTT), commodity markets regulator Forward Markets Commission (FMC) are considering several reforms to encourage investor participation on bourses adding that there is no plan on reversing tax.  During July’13, CTT at 0.01 per cent was imposed on futures trading of non-agricultural items. After that, combined turnover in Indian 5 national and 12 regional level bourses fell by over 37 percent to Rs 85.28 lakh crore till January 15th of this fiscal.

Highlighting various reasons for low trading volume, FMC Chairman stated that participation could be improved without decreasing taxes as the regulator is taking several steps to enthuse more confidence in the market, bring more participation and better governance at the commodity exchanges. FMC planned to implement recommendations of the Financial Sector Legislative Reforms Commission (FSLRC) by March’14 to strengthen consumer protection. Regulator is also working on rationalising position limits and initial margins for clients members, the corpus size of settlement guarantee fund, besides strengthening the warehousing facilities. In order to encourage retail investors, FMC emphasized that the exchanges are encouraged to launch small contracts and delivery-centre wise contracts among others. Furthermore, FMC is also planning to relax norms and permit brokerage firms, who hold equity up to 2 per cent in the exchange, to trade on the exchange platform. As per the present norms, brokerage firm who hold equity cannot trade on the exchange platform.

In other development, commodity markets regulator FMC stated that it will soon take a call on allowing investors to realise their funds in e-series contracts, under which retail investors bought and sold commodities in de-materialised form. E-series contracts, that were earlier offered on the crisis-hit NSEL, function like the cash segment in equities, but offered commodities in the demat form in smaller denominations.

The CNX Nifty is currently trading at 6,064.65 up by 28.35 points or 0.47% after trading in a range of 6,079.35 and 6,051.05. There were only 36 stocks advancing against 14 declining on the index.

The top gainers of the Nifty were Tata Steel up by 4.15%, JP Associates up by 4.10%, Ambuja Cement up by 3.53%, SSLT up by 3.22% and Sun Pharma up by 3.15%. On the flip side, Bharti Airtel down by 1.97%, Coal India down by 1.12%, Ranbaxy down by 1.03%, ITC down by 0.92% and BPCL down by 0.78% were the major losers on the index.

The Asian equity indices were trading in green; Seoul Composite up by 0.79%, Nikkei 225 up by 2.06%, Straits Times up by 0.85% and KLSE Composite up by 0.35%, Jakarta Composite up by 0.92%, Hang Seng up by 0.74%, Taiwan Weighted up by 0.92% and Shanghai Composite up by 0.17%.