Firm trade prevails; Sensex holds 22500 mark

Benchmarks continued their firm trade in green in the late afternoon session on account of buying in frontline blue chip counters taking cues from European counterparts. The sentiments were on optimistic note after the new President of the Confederation of Indian Industry (CII) stated that India can achieve GDP growth rate of well over 6% provided that systemic reforms are carried out quickly by the new government. Traders were seen piling positions in HealthCare, Oil & Gas and TECK stocks while selling was witnessed in FMCG, Metal and Bankex sector stocks. In scrip specific development, Bharti Airtel was trading firm after foreign brokerage firms initiated a conviction buy on the stock adding that the telecom company’s stock is at an inflection point. Axis Bank was trading in red after Reserve Bank of India restricted FIIs buying more shares of the bank as the limit is already breached.

On the global front, most of the Asian markets were trading in green, while the European markets were too trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,700 and 22,500 levels respectively. The market breadth on BSE was positive in the ratio of 1683:916 while 138 scrips remained unchanged.

The BSE Sensex is currently trading at 22526.58, up by 80.14 points or 0.36% after trading in a range of 22592.10 and 22473.46. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trade in green; the BSE Mid cap index was up by 1.14%, while Small cap index up by 1.10%.

The gaining sectoral indices on the BSE were HealthCare up by 1.85%, Oil & Gas up 1.44%, TECK up by 1.22%, Auto up by 1.10% and Consumer Durables up by 1.06% while, FMCG down by 1.55%, Metal down by 0.61% and Bankex down by 0.04% were the top losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 3.04%, Tata Motors up by 2.36%, Cipla up by 2.19%, Wipro up by 1.86% and ONGC up by 1.75%. On the flip side, ITC down by 2.38%, HDFC Bank down by 2.08%, Hindalco Industries down by 1.45%, SSLT down by 1.33% and Hindustan Unilever down by 1.16%,were the top losers on BSE.

Meanwhile, stepping up efforts to make the Indian markets more attractive to global investors, the Reserve Bank of India (RBI) has proposed to allow overseas investors to hedge their currency risk in local exchanges, a move which will lower entry costs for foreigners and help to improve risk mitigating environment in the country. At present, the RBI is in final discussion with market regulator Securities and Exchange Board of India (SEBI) to finalise the proposal.

The central bank proposed to permit foreign investors to hedge the coupon receipts on domestic bond holdings for up to the next 12 months. Further, to flush out yield-chasing, the RBI has planned to bar short-term investors from investing in treasury bills, where most of the foreign money has rushed in recently. The RBI’s notification further stated that in order to encourage longer-term flows and reduce volatility foreign portfolio investments in government securities will henceforth be permitted only in dated securities of maturity more than one year.

The RBI further added that any investment limit for overseas investors vacated at the shorter end will be available at longer maturities, so overall foreign portfolio investor (FPI) limits will not be diminished. So far this year, foreign investors have invested up to $5.76 billion in Indian securities particularly short-term treasury bills. Foreign investors can invest up to $30 billion in government papers, out of which investment limit for treasury bills is $5.5 billion. Overseas investors have exhausted 87.16% of their treasury bills limit.

The CNX Nifty is currently trading at 6,738.20, up by 17.15 points or 0.26% after trading in a range of 6,763.50 and 6,723.60. There were 32 stocks advancing against 18 declining ones on the index.

The top gainers of the Nifty were IDFC up by 3.74%, Bharti Airtel up by 3.03%, Tata Motors up by 2.52%, Lupin up by 2.30% and Cipla up 2.02%. On the flip side, Jindal Steel down by 2.65%, ACC down by 2.35%, ITC down by 2.27%, Asian Paints down by 2.17% and HDFC Bank down by 2.06% were the major losers on the index.

Asian equity indices were trading in green barring Straits Times which was down by 0.08% and Jakarta Composite down by 0.26%, while Hang Seng up by 0.34%, Taiwan Weighted was up by 0.36%, Shanghai Composite up by 0.56% and Nikkei 225 up by 1.04%.

The European markets were trading in green; France’s CAC 40 was up 0.08%, Germany’s DAX added 0.38% and UK’s FTSE 100 gained 0.12%.