Benchmarks trade jubilantly tracking firm Asian cues

Indian equity benchmarks have made a gap-up opening and are trading jubilantly near their all time high levels amid firm Asian cues. All the Asian equity indices edged higher at this point of time, with the regional indices paring last week’s losses, as Japanese markets surged after an extended weekend and as investors were unfazed by a drop in Chinese manufacturing. The US markets ended modestly lower in last session on possibility of further developments in the Ukraine crisis over the weekend.

Back home, sentiments remained up-beat on report that retail inflation for farm workers and rural labourers eased to 8.14 percent and 8.27 percent respectively in February from 9.08 percent and 9.21 percent in January, mainly due to decrease in prices of food items. Sentiments remained firm after Planning Commission Deputy Chairman Montek Singh Ahluwalia has exuded confidence that whoever forms the next government would be in a position to implement key reforms, including the Goods and Services Tax (GST).

Back home, on the sectoral front banking, oil and gas and power witnessed the maximum gain in trade, while consumer durables remained the lone loser on the BSE sectoral space. The broader indices too were trading in the green terrain, while the market breadth on the BSE was positive; there were 1,051 shares on the gaining side against 586 shares on the losing side while 91 shares remain unchanged.

The BSE Sensex opened at 21827.50; about 72 points higher compared to its previous closing of 21755.32, and touched a high and a low of 22046.58 and 21827.50 respectively. The index is currently trading at 22015.32, up by 260.00 points or 1.20%. There were 25 stocks advancing against 5 declines on the index.

The overall market breadth has made a strong start with 60.16% stocks advancing against 34.79% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.40% and Small cap gained 0.39%. 

The top gaining sectoral indices on the BSE were, Bankex up by 2.15%, Oil & Gas up by 1.36%, PSU up by 1.29%, Power up by 1.04% and Capital Goods up by 0.77%, while Consumer Durables down by 0.39% was the only loser on the sectoral index.

The top gainers on the Sensex were ICICI Bank up by 2.76%, HDFC Bank up by 2.05%, ONGC up by 1.96%, Coal India up by 1.94% and HDFC up by 1.92%. On the flip side, Hindalco was down by 1.16%, Dr Reddys Lab was down by 0.59%, Tata Steel was down by 0.37%, Sun Pharma was down by 0.20%  and Cipla was down by 0.01% were the top losers on the Sensex.

Meanwhile, amid reports that the Election Commission may impede the Reserve Bank’s plan to issue new bank licences before general elections, the apex bank will go ahead with issuing new bank licences only after the conclusion of general elections in May. The RBI had written to the EC seeking their views on issuing new bank licences. It is reported that RBI’s move would amount to a violation of the model code of conduct as election dates have already been announced. RBI governor Raghuram Rajan has asserted that as soon as the central bank gets the permission from EC, the bank licences would be announced within a short period thereafter.

On the other hand, EC has put its approval on hold and would like to hear from the central bank why was it crucial to grant the licences during the poll period. Further, the EC may give also ask RBI to hold decision for another two months till elections are over.

At present, there are 24 public and private sector applicants for new banking licence including NBFCs and various large corporates such as India Post, IFCI and large business houses such as the Anil Ambani group and the Aditya Birla group. The RBI had issued final guidelines that would govern the new set of proposed banks. As per the guidelines, banks should have a minimum equity capital of around Rs 5 billion and not have foreign ownership of more than 49% for the first five years of operation. The rules also require that one out of every four branches opened by the new banks should be located in rural areas. Earlier, the central bank has received 26 applications for new banking licences, however, Tatas and the Mahindras withdrew their applications saying with the given stringent criteria it would be better for them to continue with their NBFC services.

The CNX Nifty opened at 6,510.50; about 15 point higher as compared to its previous closing of 6,494.90, and has touched a high and a low of 6,580.90 and 6,510.50 respectively. The index is currently trading at 6,572.15, up by 77.25 points or 1.19%. There were 46 stocks advancing against 4 declines on the index.

The top gainers of the Nifty were ICICI Bank up by 2.71%, Kotak Bank up by 2.61%, IndusInd Bank up by 2.55%, HDFC up by 2.03% and Coal India up by 1.95%. On the flip side, Hindalco down by 0.99%, Tata Steel down by 0.50%, Dr. Reddy's Laboratories down by 0.3451% and Sun Pharma down by 0.12% were the top losers on the index.

All the Asian equity indices were trading in green; Shanghai Composite surged by 10.09 points or 0.49% to 2,057.71, Hang Seng rose 236.51 points or 1.10% to 21,673.21, Jakarta Composite climbed 11.85 points or 0.25% to 4,712.07, KLSE Composite soared 10.07 points or 0.55% to 1,830.55, Nikkei 225 increased 271.72 points or 1.91% to 14,495.95, Straits Times added by 29.06 points or 0.95% to 3,102.45, Taiwan Weighted was up by 1.38 points or 0.02% to 8,578.55 and KOSPI Composite was up by 6.78 points or 0.35% to 1,941.72.