Markets witness profit-booking after soaring to record high level

Profit-booking which was in-evitable after markets scaled life-time high level, have dragged the benchmarks lower below their day’s high point. Nevertheless, the jubilation continues as markets continue to trade with massive gains of over 1.25%, above the crucial 21,750 and 6,450 levels respectively. Select traders pressed sales after both Sensex and Nifty went past the crucial 21,800 and 6500 levels respectively. However, profit-booking dragged the broader indices lower in red terrain, with both Midcap and Smallcap indices now trading with visible cuts of over quarter of a percent.

Frenzied buying by funds and retail investors, driven by shrinking country's current account deficit and a firming trend in the Asian markets following overnight gains on the US market ahead of jobs report, helped the Sensex and Nifty to scale life-time highs.

On the global front, Asian markets moved higher on Friday at the end of a positive week for the region, ahead of the U.S. monthly labor report. Nonfarm payrolls, a much-watched indicator on the health of the world’s largest economy, will be the headline number for the day. Street widely expects labor report to show employers added 152,000 jobs to their payrolls in February, compared with 113,000 in January. The unemployment rate is expected to have fallen by 0.1 percentage point to 6.5%.

Amongst BSE sectoral front, majority of the sectoral indices continued to trade in positive terrain, stocks from TECK, Information Technology and defensive-Healthcare and Fast Moving Consumer Goods counters were witnessing unabated selling pressure. Three months high rupee’s level was mainly putting pressure on Information Technology stocks, while risk-on sentiment was working against the defensives. On the flip side, stocks from Banking, Capital Goods and Realty counters were the top gainers of the session.  Additionally, most of the shares of jewellery stocks, viz Gitanjali Gems, Shree Ganesh Jewellery House ,  Thangamayil Jewellery and  Titan Company were trading in green after government, seeking to check gold smuggling in the country, has tightened norms for Indians bringing gold into the country as overseas workers now prefer to bring their savings in gold.  The overall market breadth on BSE was in the favour of advances which continued outpacing declines in the ratio of 950:870; while 29 shares remained unchanged.

The BSE Sensex is currently trading at 21792.14, up by 278.27 points or 1.29% after trading in a range of 21866.51 and 21539.44. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices losing fervor were now trading in red on profit--booking; the BSE Mid cap and Smallcap indices were trading lower by 0.39% and 0.36% respectively.

The gaining sectoral indices on the BSE were Bankex up by 4.82%, Capital Goods up by 4.08%, Realty up by 3.03%, Oil and Gas up by 1.96%, and PSU up by 1.13%. While, IT down by 2.21%, Healthcare down by 2.23%, TECK down by 1.53%, FMCG down by 0.33% were the losing indices on BSE.   

The top gainers on the Sensex were ICICI Bank up by 6.66%, L&T up by 5.74%, Axis Bank up by 5.73%, SBI up by 4.68% and Bharti Airtel up by 3.99%. On the flip side, Dr Reddy’s Lab down by 4.05%, Wipro down by 3.66%, Infosys down by 2.49%, Gail India down by 1.84% and TCS down by 1.72% were the top losers of the session.

Meanwhile, Seeking to check gold smuggling in the country, the government has tightened norms for Indians bringing gold into the country as overseas workers now prefer to bring their savings in gold, which is leading to spurt in smuggling and pressure on inward remittances.

As per the Central Board of Excise & Customs directive, passengers will now have to mention the engraved serial number on gold bars and item-wise list of ornaments in the baggage receipt issued by customs. In order to prevent misuse of the gold import facility, the apex indirect taxes body has also directed its field officials to ascertain the antecedents of such passengers, source of funding for gold as well as duty being paid in foreign currency and  person responsible for booking of tickets etc. Presently, any Indian passenger or a passenger holding a valid passport issued under the Passport Act, 1967 coming to India after a period of more than six months of stay abroad is eligible to import up to1 kg gold in the form of bars and ornaments on payment of 10% Customs duty in foreign currency.

Over the past few months, there has been a spurt in import of gold by eligible passengers through various airports and the custom department is of the view that some unscrupulous elements are smuggling gold by hiring eligible passengers to import gold on their behalf. Gold smuggling to India increased after the government and the Reserve Bank of India (RBI) imposed restriction on gold imports to reduce the widening current account deficit (CAD). The curbs included higher import duty at 10 percent and linking the imports to exports with 20:80 scheme under which 20% of all gold imports by importers has to be re-exported.

The CNX Nifty is currently trading at 6,482.75 up by 81.60 points or 1.27% after trading in a range of 6,506.15 and 6,413.55. There were 31 stocks advancing against 19 declining on the index.

The top gainers of the Nifty were DLF up by 7.10%, ICICI Bank up by 6.60%, JP Associates up by 6.54%, Axis Bank and L&T were up by 5.81%. On the flip side, Dr Reddy’s Lab down by 3.97%, Wipro down by 3.59%, Infosys down by 2.42%, Lupin down by 2.25% and Ranbaxy down by 1.85% were the major losers on the index.

Most of the Asian equity indices were trading in green; Nikkei 225 surged by 0.92%, Hang Seng gained 0.03%, Straits Times added 0.23%, Jakarta Composite advanced 0.19% and Taiwan Weighted was flat with slender gains. On the flip side, Shanghai Composite declined by 0.04% was the only loser on Asian equity indices