Markets strengthen after a positive start

Indian markets have extended their gains on Monday morning with traders still rejoicing the interim budget announcements made yesterday by Finance Minister P Chidambaram. Markets are slowly strengthening with active participation of broader indices despite mixed global cues. While, the US markets remained closed, the Asian markets are exhibiting mixed trend. On the domestic front the maximum gain is seen in the rate sensitives’ like banking and auto after the budget announcements and also as the Finance Minister said that Reserve Bank of India (RBI) should strike a balance between price stability and growth when announcing its monetary policy. However, he also dismissed arguments that there was a contradiction between the stance of the government and the Reserve Bank of India on the growth versus price stability issue but asserted that an elected government has the responsibility of charting out the pace of growth. Sectorally, barring a bit somberness in consumer durables all other sectoral indices on the BSE are trading comfortably in green with  banking taking the lead helped by surge in the PSU major SBI, which has agreed to lend up to Rs 10,000 crore to six telecom companies that won airwaves in the bandwidth auction concluded last week.

The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 990 shares on the gaining side against 471 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex opened at 20457.56; about 6 points lower compared to its previous closing of 20464.06, and touched a high and a low of 20609.00 and 20436.48 respectively. The index is currently trading at 20608.44, up by 144.38 points or 0.71%. There were 25 stocks advancing against 5 declines on the index.

The overall market breadth has made a strong start with 64.58% stocks advancing against 30.72% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.57% and Small cap gained 0.58%. 

The top gaining sectoral indices on the BSE were, Bankex up by 1.22%, Healthcare up by 1.11%, Auto up by 1.02%, Metal up by 0.92% and FMCG up by 0.65%, while there were no losers on the sectoral space.

The top gainers on the Sensex were HDFC up by 1.84%, SBI up by 1.60%, Axis Bank up by 1.59%, ICICI Bank up by 1.34% and HDFC Bank up by 1.15%. On the flip side, Tata Power was down by 1.42%, Gail India was down by 0.91%, ONGC was down by 0.38%, Bharti Airtel was down by 0.36% and NTPC was down by 0.22% were the top losers on the Sensex.

Meanwhile, thwarting hopes of any early easing in restrictions to the gold imports, the Reserve Bank of India (RBI) has barred nominated banks and agencies from importing the precious metal in excess of their entitlements in first or second lot under the 80:20 schemes. As per RBI’s latest notification, import of gold in the third lot onwards should be lesser of the two-five times the export for which proof has been submitted or quantity of gold permitted to a nominated agency in the first or second lot.

Previously, the government under the 80:20 scheme in August 14, 2013, allowed nominated agencies to import gold, provided that 20 per cent of the inward shipment will be exported and the permission to import the next lot was granted only on the fulfillment of these export obligations.

However, in case of advance authorization (AA) and duty free authorization (DFIA) for gold import issued before August 14, 2013, RBI underscored that the 80:20 rule was not applicable for units in Special Economic Zones (SEZs), Export Oriented Units (EoUs), Premier and Star Trading Houses.

Earlier, the government in order to contain rising gold import, had hiked import duty on gold thrice in 2013 to a total of 10%. While, the RBI rolled out certain restrictions, including the 80:20 scheme for imports.

The CNX Nifty opened at 6,071.30; about 2 point lower as compared to its previous closing of 6,073.30, and has touched a high and a low of 6,116.00 and 6,066.80 respectively. The index is currently trading at 6,110.35, up by 37.05 points or 0.61%. There were 43 stocks advancing against 7 declines on the index.

The top gainers of the Nifty were HDFC up by 1.92%, Bank of Baroda up by 1.87%, PNB up by 1.79%, IndusInd Bank up by 1.74% and IDFC up by 1.70%. On the flip side, Gail down by 1.16%, ONGC down by 1.08%, Tata Power down by 0.97%, DLF down by 0.77% and Bharti Airtel down by 0.38% were the top losers on the index.

The Asian equity indices were trading mixed; Hang Seng added 1.33 points or 0.01% to 22,537.27, Jakarta Composite strengthened by 9.80 points or 0.22% to 4,565.17, Nikkei 225 surged by 265.95 points or 1.85% to 14,659.06 and Taiwan Weighted was up by 12.99 points or 0.15% to 8,532.54.

On the flip side, Shanghai Composite declined by 10.41 points or 0.49% to 2,125.01, KLSE Composite contracted 2.61 points or 0.14% to 1,824.87, Straits Times was marginally in red by 0.12 points to 3,069.16 and KOSPI Composite was down by 6.40 points or 0.33% to 1,939.96.