Custom Search

Thursday, March 31, 2011

Equity indices continue to trade firm; Nifty above 5800 mark


The domestic equity bourses have maintained their rally for the eight consecutive day with the BSE Sensex surpassing the 19,400 mark and the NSE Nifty trading well above 5800 milestone in the mid morning session. After making a firm start tracking positive cues from global indices, the Indian equity markets are continuing the rally some mild profit booking too has appeared but recovery was instant and the indices are trading on a firm note. It seems that bulls have taken total grip of the bourses and are in no mood to relent. However market may see some volatility in the latter part of the trade due to expiry of March F&O series.
Meanwhile, the rally in the domestic market continues on buying supported from institutional, domestic and retail front. The FIIs on Wednesday were the net buyers in equities. The Asian markets were trading mostly in green, barring Shanghai Composite that has plunged by more than a percent.
The BSE Sensex is currently trading at 19,422.80, up by 132.62 points or 0.69%. The index has touched a high of 19,443.48 and a low of 19,339.75 respectively. 19 stocks were advancing against 11 declines on the index.
In the broader markets, BSE Mid cap and Small cap indices climbed 0.34% and 0.66% respectively.
The top gaining sectoral indices on the BSE were, CG up by 1.17%, IT up by 1.09%, Realty up by 0.91%, Oil & Gas up by 0.82% and CD was up by 0.80%. While the Auto index remained the sole loser in the space down 0.50%.
The top gainers on the Sensex were Hero Honda up by 3.24%, TCS up by 2.25%, BHEL up by 1.70%, ONGC up by 1.66% and L&T was up by 1.47%.
On the flip side, M&M down by 2.77%, Cipla down by 1.88%, RCom down by 1.73%, Bharti Airtel down by 1.54% and Maruti Suzuki down by 1.47% were the top losers on the index.
Meanwhile, despite the Indian government looking to further ease the regulations governing the foreign direct investment (FDI), the direct capital inflows into the country declined for a second consecutive month in February to $1.2 billion. The figure is about 30% below the FDI worth $1.7 billion received in the same month a year ago.
Various agencies have been raising concerns over declining FDI amidst a widening current account deficit (CAD). Cumulative FDI into India during the first 11-months of the current fiscal year has declined by 25% to $18.3 billion, putting pressure on the government to fine-tune its policies in order to attract greater amount of overseas investment. The country had received FDI worth $24.6 billion during the corresponding period of last financial year.
The Reserve Bank of India (RBI) had said recently that it preferred greater amount of long-term and stable flows through FDI into the country rather than often short-term oriented foreign institutional investment (FII) to bridge the current account deficit (CAD) that the country faces. The Governor of the central bank D Subbarao said that while inflow of foreign capital was welcome for bridging the CAD, the RBI would always prefer the stable inflows in terms of FDI, which comes with a long term commitment, rather than volatile portfolio inflows which can reverse in case of even a small change in either domestic of global economic scenario.
The decline in FDI in India has been rather against the trend seen in other developing countries. A recent report by the United Nations Conference on Trade and Development (UNCTAD) had observed that in the last calendar year, emerging market economies (EMEs) attracted more foreign investment than developed countries for the first time in history as the global economic engine shifts to the EMEs. Despite this, the FDI into India has seen a decline.
Meanwhile, the government is set to release a revised FDI policy circular later in the day hoping to attract greater amount of foreign funds in the next financial year beginning April 1. Among other modifications, the third edition of the Consolidated FDI Policy Circular (CFPC) may contain guidelines on domestic companies issuing shares to foreign entities for considerations other than cash, a move aimed at checking possible misuse of FDI policy to engage in money laundering.
The S&P CNX Nifty is currently trading at 5,823.65, higher by 36 points or 0.62%. The index has touched a high of 5,830.80 and a low of 5,803.05 respectively. There were 29 stocks advancing against 21 declines on the index.
The top gainers of the Nifty were Grasim up by 3.15%, Hero Honda up by 3%, TCS up by 2.30%, ONGC up by 2.02% and L&T up by 1.83%.
M&M down by 2.85%, HCL Tech down by 2.10%, RCom down by 1.87%, Cipla down by 1.85% and Bharti Airtel was down by 1.54%, were the major losers on the index.
Asian markets were trading mostly in the green zone; Hang Seng added 22.68 points or 0.10% to 23,474.11, Jakarta Composite climbed 22.67 points or 0.62% to 3,663.65, KLSE Composite advanced 4.71 points or 0.31% to 1,536.34, Nikkei 225 rose 26.97 points or 0.28% to 9,735.76, Straits Times gained 1.96 points or 0.06% to 3,097.28 and Seoul Composite moved up 6.36 points or 0.30% to 2,097.74.
On the other hand, Shanghai Composite plunged 28.62 points or 0.97% to 2,927.15 and Taiwan Weighted shed 12.12 points or 0.14% to 8,634.19.

No comments: