Barometer gauges escalate to day’s high point on sustained buying activities

Local equity benchmarks, gaining strength brick by brick, were trading near day’s high on sustained buying activities by both retail and institutional investors amidst positive global counterparts. Sentiments were bolstered in early deals after FIIs, snapping previous five-day selling streak, turned buyers on Thursday, by purchasing Rs 10.75 crore worth of local equities in the previous session. Additionally, buying in blue chip stocks, viz Infosys and Sun Pharma, also aided market’s uptrend. At day’s high, Sensex and Nifty were cruising past the crucial 20,400 and 6,050 levels respectively, with gains of close to half a percent.

On the global front, Asian shares regained a measure of stability on Friday, stepping further away from five-month lows after a strong rally on Wall Street on hopeful signs in the upcoming U.S. payroll report put part of global growth concerns at rest.

Closer home, while most of the sectoral indices were trading in green, stocks from FMCG and TECK counters were the only losers of the index. On the flip side, Metal, Healthcare and Realty pivotals were witnessing maximum traction. However, markets could reverse intra-day gains in the second half of the session as some caution sets in ahead of advance growth figures that would be unveiled later in the evening. Government on Friday is likely to cut its estimate of 5% growth forecast for the fiscal year that ends on March 31, thanks to a slower-than-expected recovery by industries. The overall market breadth on BSE was in the favour of advances which were outnumbering declines in the ratio of 1316:852; while 145 shares remained unchanged.

The BSE Sensex is currently trading at 20401.63, up by 90.89 points or 0.45% after trading in a range of 20,450.51 and 20,363.58. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices continued to outperform larger indices; the BSE Mid cap index was up by 0.82%, while Small cap index up by 0.72%.

The gaining sectoral indices on the BSE were Metal up by 2.33%, Healthcare up by 1.60%, Realty up by 1.51%, Bankex up by 0.84% and Power up by 0.83%. While, FMCG down by 0.68% and TECK down by 0.08% was the only losing index on BSE.   

The top gainers on the Sensex were Tata Steel up by 4.88%, SSLT up by 3.17%, Sun Pharma up by 2.57%, Dr Reddy’s Lab up by 1.71% and Maruti Suzuki up by 1.68%. On the flip side, Bharti Airtel down by 1.54%, ITC down by 1.09%, M&M down by 0.86%, TCS down by 0.79% and BHEL down by 0.70%.

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 6,066.35, up by 30.05 points or 0.50% after trading in a range of 6,079.35 and 6,051.05. There were only 38 stocks advancing against 12 declining on the index.

The top gainers of the Nifty were JP Associates up by 5.28%, Tata Steel up by 4.90%, Ambuja Cement up by 3.82%, SSLT up by 3.11% and Sun Pharma up by 2.75%. On the flip side, Bharti Airtel down by 1.56%, ITC down by 1.09%, BHEL down by 0.99%, Ranbaxy down by 0.94% and M&M down by 0.90% were the major losers on the index.

The Asian equity indices were trading in green; Seoul Composite up by 0.77%, Nikkei 225 up by 2.17%, Straits Times up by 0.93% and KLSE Composite up by 0.56%, Jakarta Composite up by 0.92%, Hang Seng up by 1.24%, Taiwan Weighted up by 0.92% and Shanghai Composite up by 0.35%.