Markets surge over a percent; IT counter remains in jubilant mood

The local equity markets continue to trade firm after making fresh high's in late morning session on positive cues from other regional peers while US index futures were also trading in green, setting up the positive mood for the bulls. Back home, all the sectoral indices on BSE remain in green, IT index leads the gainers list, surging by more than two percent, the index biggies like Infosys and TCS increased more than two percent and one percent respectively. The broader markets continued to trade strong; the BSE Mid cap and Small cap indices gained 0.88% and 0.92% respectively.  The market breadth on the BSE was also positive; there were 1640 shares on the gaining side against 937 shares on the losing side while 117 shares remained unchanged

IT stocks were in demand on encouraging US tech earnings overnight. India's second largest software services exporter Infosys Technologies trades higher the company is  planting the seeds for a long-term IT services play in the African continent. Last night its ADR surged 3.16%  and is presently the top gainer both on Nifty and Sensex.

The BSE Sensex increased 189.84 points or 1.03% at 18,540.58. The index has touched high and low of  18,560.59 and 18,480.69 respectively.

The BSE Midcap index and Small cap index gained 0.88% and 0.92% respectively. 

The top gaining sectoral indices on the BSE were, IT up by 2.42%, TECk up by 2.07%, Capital Goods (CG) up by 1.45 %,Realty was up by 0.95% and FMCG up 0.84% While there were no losers on the index.

The top gainers on the Sensex were Infosys up by 2.80%, Wipro was up by 2.47%, DLF up by 2.11%,L&T up by 2% and TCS up 1.58% while there were no loser on the index.

Riding on a strong Kharif crop in the last season and Rabi crop in ongoing season, the Indian farm sector is set for a bumper growth year. The agriculture ministry in its latest projections has pegged the overall growth in the farm sector at 5.4% compared with the production levels in the last fiscal.

According to the analysis done by the agriculture ministry, there has been substantial growth in area under cultivation of major crops and most of the grain as well as cash crops from both the Kharif and Rabi seasons will see significant year-on-year growth in the current fiscal. While the growth can be partly attributed to low base, improvement in weather prediction systems also get part of the credit according to the government.

India's farm sector production had been miserable in previous two years. The first half growth in current fiscal has been reported at 3.8% which marks substantial improvement over growth of (-) 0.1% and 0.4% in previous two years. Good monsoon last year however boosted the Kharif crop while some late rains also improved soil moisture and resulted in good conditions for the Rabi crop as well.

The Annual Report of the Department of Agriculture and Cooperation has also expressed satisfaction over the growth of investment and capital formation in agriculture in the recent past. The annual report estimates that gross capital formation, or investment, in agriculture as a percentage of Gross Domestic Product (GDP) in this sector has substantially increased to 22.3% in 2009-10 from 15.8% in 2005-06. In absolute terms, the capital formation in agriculture and allied activities in 2009-10 was over Rs 1,300,000 crore, as per the report. The total private expenditure in the farm sector in the first four years of the Eleventh Plan is estimated to be Rs. 44,413 crore, up from Rs. 14,952 crore in the entire five year period of the Tenth Plan.

Despite the better growth seen in farm sector, its share in overall national income however will continue to fall in current fiscal as well. As per the Central Statistical Organization's (CSO) estimates, the share of agriculture in the country's GDP has fallen from 17.4% in 2006-07 to 14.2% in 2011-11. The falling share of agriculture in GDP though is an expected outcome in a fast growing and structurally changing economy.

The S&P CNX Nifty surged 52.05 points or 0.94% at 5,574.45.The index has touched a high of 5,588.70 and a low of 5,560.95 respectively.

The top gainers of the Nifty were Infosys up by 2.91%, HCL Tech up by 2.69%, Wipro up by 2.55%, DLF up by  2.24% and L&T up by 1.99% .

GAIL down by 1.44%, Ranbaxy down 0.60%, Siemens down 0.25%,Cairn India down 0.20% and  BPCL down by 0.13%, were the only losers on the index.

All other regional peers were trading in the green; Shanghai Composite surged 1.25%, Hang Seng advanced 0.92%, Jakarta Composite climbed 0.45%, KLSE Composite rose 0.16%, Nikkei 225 moved up 1.07%, Straits Times soared 0.82%, Seoul Composite added 0.85% and Taiwan Weighted gained 0.40%. 

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