Local bourses in buoyant mood; Sensex nears 18000

Local bourses after getting bright start in the morning on the back of a positive trend in global markets following easing worries about Egypt, are trading strength to strength. Firming Asian trends trend in Asia after a higher close in the US market on the weekend have boosted investor's sentiment. Some impressive results, especially from Tata Motors and Mahindra Satyam, too have contributed to the buoyant mood of the markets in the mid morning session. However, market dynamics can be skewed going further in the day post overall WPI inflation data for January 2011, which is due to be released around the noon. The overall WPI inflation for January 2011 is being speculated to be around 8.5 per cent, on back of high primary inflation. However, at the moment, leading the rally are stocks from Auto, Capital Goods (CG), Metal, Consumer Durables (CD) and Bankex counters, whereas stocks from Oil & Gas sector have failed to be a party to the rally and are edging low in the trade. Broader indices too have crafted good heights and are trading up over 2% each. The overall market breadth on BSE is heartening and in the favour of advances which have thrashed declines in the ratio of 2005:362, while, 47 shares remained unchanged.

The BSE Sensex is currently trading at 17,960.71, up by 232.10 points or 1.31%.  The index touched a high of 17,986.85 and a low of 17,857.12 respectively. There were 26 stocks advancing against just 4 declines on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap and Small cap indices were up by 2.27% and 3.04% respectively.

In BSE sectoral indices, Auto up by 3.09%, Capital Goods (CG) up by 3.00%, Metal up by 2.28%, Consumer Durables (CD) up by 2.21% and Bankex up 2.17% were the main gainers in the BSE sectoral space. While Oil & Gas down by 0.29% was the lone looser on the index.

The top gainers of the BSE Sensex were Tata motors up by 6.23%, L&T up by 3.90%, Jindal Steel up by 3.17%, Tata Power up by 2.97% and Bajaj Auto up by 2.94%.

The losers on the BSE were, RIL down by 1.25%, Reliance Communication down by 0.77%, Wipro down by 0.39% and ONGC down by 0.04%.

Meanwhile, the commerce and industry ministry has been working for sometime on the strategy paper on exports. While it was earlier looking to double the current year's target, that is, $200 billion, to touch $400 by 2014-15, with the strong recovery seen in India's shipments over last few months, it is looking to hike the target.

India's exports for last several months have been expanding at over 30% and most economists feel that it reflects the impact of conscious effort on part of the government and exporters to diversify the basket and direction of trade. As such, the high growth trend may probably continue to sustain for at least 2-4 years. If this indeed turns out to be the case, India can easily achieve $500 billion worth exports by 2014-15.

The commerce ministry had earlier taken a number of steps to boost India's exports when demand from rich countries had slumped following the financial crisis of 2008. It added a lot of new markets under Focus Market Scheme (FMS) and the incentive available under the FMS were raised from 2.5% to 3%. Similarly, the scope of the Focus Product Scheme (FPS) was also widened by including products from categories like engineering, plastic and electronics. Incentive available under FPS has been raised from 1.25% to 2%.

The combined product-market scheme known as Market Linked Focus Product Scheme (MLFPS) was launched by inclusion of products like pharmaceuticals, textile fabrics, rubber products, glass products, auto components, motor cars, bicycle and its parts etc. Incentives for exporters of these products were linked to 13 identified markets including Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand. The over 30% export trajectory seen over last several months now shows that these schemes have worked in diversifying India's shipments.

Now that exports for current fiscal are set to surpass the target by good $20 billion, the government is looking to set a slightly ambitious target of reaching $500 billion exports by 2014-15. For this level to be achieved, the exports will have to grow by around 28% of compound average growth rate (CAGR). While such a growth is not too difficult to be achieved, it would require the global economic atmosphere to remain conducive. In other words, if there is no second dip in global economy, only then India can hope to achieve this target.

The S&P CNX Nifty is currently trading at 5,381.30, up by 71.30 points or 1.34 %. The index touched a high of 5,387.15 and a low of 5,340.25 respectively. There were 41 stocks advancing against 7 declines, while 2 stocks remained unchanged on the index.

The top gainers of the Nifty were Tata Motors up by 6.15 %, L&T up by 7.26%, Jindal Steel up by 3.66%, Suzlon up by 3.61% and IDFC was up by 3.36%.

The top losers of the index were RCom down 1.70%, RIL down by 0.91%, Bharti Airtel down 0.85%, Power Grid Corporation down 0.21% and Siemens down 0.10%.

All the Asian markets were trading with good gains; Shanghai composite surged 2.08%, Hang Seng gained 1.07%, Jakarta Composite picked up 0.97%, KLSE Composite rose 1.02%, Straits Times added 1.08% and Seoul Composite accelerated by 1.69%.

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/?TJzsLEwstCyc7OysHMyctEa0nAxs7MwcbA==