Benchmark indices continue to trade higher; banking counters lead

The benchmark equity indices continued to trade higher in late afternoon session. Meanwhile majority of the Asian markets settled in green and European markets too were trading in green while US index futures showed uptick in the screen trade, collectively aiding to the positive sentiments on the local markets on the same time from the domestic front, India's food inflation eased significantly over the week-ended Feb 5, and stood at 11.05% compared with 13.07% recorded in the previous week, maintaining its sharp downward trajectory for second consecutive week which boosted the sentiments of investors  on anticipation that  the government may announce fresh measures to boost productivity for key staples in the upcoming budget. Back on street from the sectoral indices except Oil &Gas counters all were trading in the green. Banking, metal, capital goods and IT stocks led the gainers list. In banking and financial space sectors, HDFC Bank up 4.15%, IDFC up 3.67% and HDFC up 3.45% were the major contributors for the today's gain. Broader markets were also mirroring the benchmarks, the BSE Mid-cap and Small-cap indices rose 0.88% and 1.08%, respectively. The market breadth on the BSE was positive; the gainers outpaced the losers in a ratio of 1739:1013 while 117 shares remained unchanged.

The BSE Sensex increased 190.69 points or 1.04% at 18,491.59.The index touched a high and a low of 18,506.27 and 18,233.79, respectively.

The BSE Mid-cap and Small-cap indices rose 0.88% and 1.08%, respectively.

All the BSE sectoral indices barring OIL & Gas down by 0.47%, were in green. Bankex up 0.96%, Capital Goods (CG) up 1.89%, Bankex up 1.70%, Consumer Durables (CD) up 0.96%, Metal up 0.92% and TECk up 0.67% were the major gainers;

The top gainers on the Sensex were HDFC Bank up 4.18%, HDFC up 3.03%,L&T up 2.58%, Bharti Airtel up 1.92% and Tata Steel up 1.73%.

Cipla down 0.65%, Wipro down 0.65%, ONGC down 0.50%, HUL down 0.40% and NTPC down 0.11% were the only losers on the index.

The Indian government on Wednesday signed its most ambitious free trade agreement (FTA) yet with Japan, a pact being dubbed as one with potential to change economic landscape of Asia in coming years. The FTA is expected to come into force from April this year after being ratified by the Japanese Parliament.

Indian Commerce and Industry Minister Anand Sharma and Japan's Foreign Minister Seiji Maehara signed the pact, which will abolish tariffs on 90% of Japanese exports to India such as auto parts and machinery items and 97% of Indian exports to Japan including farm and fisheries products in terms of trade value over 10 years.

The commerce ministry has dubbed the pact as historical and has estimated that trade between two of the three largest economies in Asia will more than double in just three years to touch $25 billion from currently little over $11 billion a year. While the pact will help Japan get deeper into India's fast growing market and help revive its slowing economy, for India, it opens doors to Japan's vast pharmaceutical market and trade in technology intensive items.

The two countries have been negotiating the FTA since 2007. Following the signing ceremony, the Japanese government will now submit the pact to parliament for ratification. Further, under the pact, the two countries will continue talks over the issue of whether to allow Indian nationals to work in Japan as health workers and care givers, with the aim of reaching a conclusion within two years after the deal takes effect.

With negotiations on the multilateral trade deal under the Doha round of world trade organization (WTO) looking to get extended into 2012 or even beyond, India has been focusing more on bilateral trade agreements and has already entered into trade agreement with the 10 member group ASEAN while negotiations are at advance stages with the European Union. Feasibility studies for FTA with Australia and Canada are on their way. 

The S&P CNX Nifty climbed 55 points or 1% to 5,536.70. The index touched a high and a low of 5,544.95 and 5463.40, respectively. 

The top gainers of the Nifty were HDFC Bank up 4.15%, IDFC up 3.67%, HDFC up 3.45%, Ambuja Cement up 3.16%, and L&T up 2.38%.

The top losers of the index were GAIL down 1.28%, Reliance capital down 1.26%, Reliance Power down1.03%, HCL Tech down 1% and Cairn India down 0.55%.

Majority of the Asian markets were in the green; Shanghai Composite surged 0.10%, Hang Seng advanced 0.63%, Jakarta Composite added 0.51%, Nikkei 225 gained 0.26% and KLSE Composite rose 0.15% while Straits Times slipped 0.21%, Seoul Composite drifted lower by 0.60% and Taiwan Weighted dropped 0.33%. 

 European markets were trading in the green. FTSE surged 0.13%, CAC-40 advanced 0.04% and DAX climbed 0.12%.

Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).

To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?TJzsLEwstCyc7OysHMyctEa0nIwMjAyMzA==