Firm trade prevails; Nifty above 6500 mark

Indian equities added gains to continue firm trade hovering near the highest point of the day in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on positive mood from early trades 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, which helped the indices BSE Sensex and NSE Nifty to scale life-time highs. The sentiments also got a push after regulatory data showed that overseas investors bought Indian shares worth 12.73 billion rupees on Thursday, to mark their biggest daily purchase since December 19. Traders were seen piling positions in Realty, Bankex and Capital Goods stocks while selling was witnessed in IT, HealthCare and TECK sector stocks. In scrip specific development, Bharti Airtel was trading firm after global ratings agency Standard and Poor’s upgraded its issuer rating of the company to ‘BBB-‘. Central Bank of India was trading in green after the bank offloaded its entire stake in Credit Information Bureau of India.

On the global front, the Asian markets were trading mostly in red, while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,500 and 21,800 levels respectively. The market breadth on BSE was negative in the ratio of 1324:1353 while 132 scrips remained unchanged.

The BSE Sensex is currently trading at 21890.77, up by 376.90 points or 1.75% after trading in a range of 21901.68 and 21539.44. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices losing fervor were trading in green; the BSE Mid cap and Smallcap indices were trading up by 0.03% and 0.09% respectively.

The gaining sectoral indices on the BSE were Realty up 5.71%, Bankex up by 4.95%, Capital Goods up by 4.08%, Oil & Gas up by 3.85% and PSU up by 2.25%. On the other hand, IT down by 2.33%, HealthCare down by 2.14% and TECK down by 1.45% were the only losing indices on BSE.   

The top gainers on the Sensex were ICICI Bank up by 6.50%, Bharti Airtel up by 5.98%, Reliance Industries up 5.78%, Axis Bank up by 5.54% and L&T up by 5.28%. On the flip side, Dr. Reddy’s Lab down by 4.13%, Wipro down by 3.76%, Infosys down by 2.80%, TCS down by 1.70% and Sun Pharma down by 1.34% were the top losers of the session.

Meanwhile, upholding its decision over increased net worth requirement for mutual funds companies, the Securities and Exchange Board of India (SEBI) has stated that it is imperative to raise net worth requirement for asset management companies as industry players need strong financial base for better penetration as well as to boost growth. SEBI has recently raised the minimum capital requirement for setting up a mutual fund house to Rs 50 crore from the existing Rs 10 crore.

The recent SEBI’s move has become an issue for small mutual fund houses which now have to raise their capital to comply with the new rule. On the other hand, SEBI member S Raman has asserted that there is less scope for the market regulator to have a rethink on this issue. Highlighting sound financial strength a necessary requirement for mutual fund industry, S Raman asserted that around 87 percent of mutual fund AUM is concentrated in top 15 centres and there is a need to go beyond T-15 cities to increase mutual funds penetration. Referring to the issue of declining retail investors investment in mutual fund products, Raman emphasized that SEBI is planning to give more additional tax concession of Rs 50,000 for investors who invest in pension products through mutual fund route and also demanded the government for higher income tax cap to facilitate more savings into MF products.

SEBI has been taking measures over the past few months to revive the growth of Indian mutual funds industry. The regulator has also planned to come out with a long-term policy soon for mutual funds to help the industry create more understanding and better positioning of products amongst investors. It expects its new long-term policy for mutual funds to help their total asset base grow to Rs 20 lakh crore within five years, from about Rs 9 lakh crore currently. Furthermore, SEBI and the government are also making changes in some policies of mutual funds so that industry could get access to a substantial amount of money from the state-administered provident fund and other retirement programmes.

The CNX Nifty is currently trading at 6,514.55 up by 113.40 points or 1.77% after trading in a range of 6,519.50 and 6,413.55. There were 37 stocks advancing against 12 declining ones while 1 stock remained unchanged on the index.

The top gainers of the Nifty were JP Associates up by 9.63%, DLF up by 8.81%, ICICI Bank up by 6.84%, IndusInd Bank up by 6.83% and Ambuja Cement was up by 6.36%. On the flip side, Dr. Reddy’s Lab down by 4.04%, Wipro down by 3.83%, Infosys down by 2.80%, Lupin down by 2.57% and TCS down by 1.65% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng lost 0.19%, Jakarta Composite dropped 0.14%, Shanghai Composite declined by 0.08%, KLSE Composite was down by 0.31% and Kospi Composite Index inched lower by 0.05%.

On the other hand, Nikkei 225 surged by 0.92%, Straits Times added 0.21% and Taiwan Weighted was flat with slender gains.

The European markets were trading in red; France’s CAC 40 was down 0.19%, Germany’s DAX lost 0.42% and UK’s FTSE 100 dropped 0.32%.