Local bourses after turning jittery in the early deals have now gained slender profits on the back of the reports stating the clearance of the Retail FDI proposal coupled with the passing off the RIL-BP deal, which has given some respite to the Indian equity markets in the light of the daunting global setup. On the global front, the US markets made a mixed closing on Friday, as concerns of lawmakers agreeing to increase country's debt limit amid some weak earnings announcements, kept looming large. Meanwhile, Asian shares markets fell on Monday weighed by concerns over stalled negotiations on raising the U.S. debt ceiling, which spurred the safe-haven yen higher and pressured shares of Japan's exporters. The US future indices were showing a downtick in the screen trade. Back home, Retail stocks like Pantaloons India, Shopper's Stop and Koutons Retail India were in demand on FDI clearance report. A government panel on Friday recommended opening up India's multi-brand retail sector to foreign direct investment. Meanwhile, up move of the market bellwether -Reliance Industries- also added some vigor to the Indian equity markets, which were seen cautious ahead of the RBI's policy meet on Tuesday. The government on Friday gave unconditional approval to Reliance Industries' (RIL's) proposal to sell 30 per cent interest in 21 oil and gas blocks to BP. However, it withheld permission for two blocks. Besides, these shares of Reliance Industries surged by over 2 per cent in early trade in anticipation of good first quarter numbers as the market bellwether prepares itself to report Q1 numbers coupled with Bank of India, Bank of Maharashtra, NTPC and Sterlite Industries today.
Additionally, stocks from telecom sector were on investor's radar with the shares in Idea Cellular and Bharti Airtel hitting their 52-week high on Monday after the latter on Friday increased its tariffs by 20 per cent for prepaid subscribers in six circles, including Delhi, Kerala and Gujarat. Reversal of the losses in Realty also gave some comfort to the market, however lending positive guidance to the markets at this point of time were the shares of oil & gas, Auto and Capital Goods counters. However, the only weak spells on the board were stocks from FMCG and IT counters. The 30 scrip sensitive index was up over 18700 mark, while the 50 share index gained 15 points. The broader indices doing well for themselves were outperforming their peers. The overall market breadth on BSE was in the favour of advances which outpaced declines in the ratio of 1458:805, while 93 shares remained unchanged.
The BSE Sensex is currently trading at 18,752.09, up by 29.79 points or 0.16%. The index has touched a high and low o 18,777.15 and 18,670.84 respectively. There were 19 stocks advancing against 11 declines on the index.
The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices were trading up by 0.49% and 0.56% respectively.
The top gaining sectoral indices on the BSE were Oil and Gas up by 0.91%, Auto up by 0.66 %, CG up by 0.65%, CD up by 0.62% and Realty was up by 0.44%. While, FMCG down by 1.03%, IT down by 0.56% were the only losers on the index.
The top gainers on the Sensex were Reliance Communication up by 5.61%, Bharti Airtel up by 2.69%, Sterlite Industries up by 1.66 %, RIL up by 1.53% and M&M up by 1.37%.
On the flip side, ITC was down by 1.57%, Infosys was down by 0.74%, Cipla and Bajaj Auto were down by 0.68%, and HDFC down by 0.57% were the top losers on the Sensex.
Meanwhile, ahead of the central bank's monetary policy review on July 26, RBI Governor D Subbarao met Finance Minister Pranab Mukhejee to discuss the macro economic situation of the country. Despite the fear of economic slowdown, RBI is expected to hike its key policy rate to control the sticky inflation.
After meeting finance minister, Governor said, "I have come to review the macro-economic situation with Finance Minister before the policy review, slated for July 26.' The meeting of RBI governor and finance minister was also attended by other senior official of finance ministry.
On 26 July, the central bank is scheduled to announce the first quarterly credit policy for current financial year. In the quarterly policy review, RBI is expected to hike its short term leading (repo) and borrowing rate (reverse repo) rates by another 25 basis points. Since March 2010, central bank has increased its short term leading and borrowing rates by 2.5% or 250 basis points, as a result of RBI's non-stop increase in interest rates, capital cost has increased significantly, and it also had adversely affected industry and consumers.
Despite the anti-inflationary stance adopted by the RBI, headline inflation measured by Wholesale Price Index (WPI) had remained well above the RBI's comfort level. For the month June, headline inflation increase to 9.44% from 9.06% in May.
RBI is facing challenging task of managing balance between inflation and growth. However, elevated inflation along with RBI's anti-inflationary stance had affected the health of economic growth. Recently, government also revised its projection of country's Gross Domestic Product (GDP) downward from 9% to 8.6 % on account of slower industrial production and stubbornly high inflation. The Index of Industrial Production for May stood at 5.6% which is nine month low level due to poor performance of manufacturing, mining and lower offtake of capital goods. The S&P CNX Nifty is currently trading at 5,648.95, higher by 15.00 points or 0.27%. The index has touched a high and low of 5,651.85 and 5,616.70 respectively. There were 32 stocks advancing against 18 declines on the index.
The top gainers of the Nifty were RCom up by 5.61%, Bharti Airtel up by 2.81%, Axis Bank up by 1.96%, RIL up by 1.56%, Sun Pharmaceuticals Industries up by 1.49% and Sterlite Industries up by 1.48%.
On the flip side, ITC down by 1.45%, Sesa Goa down by 0.97%, Infosys down by 0.89%, Power Grid Corporation of Indian down by 0.87% and HDFC down by 0.84% were the major losers on the index.
All the Asian equity indices were trading in the red; Shanghai Composite plunged 2.10%, Hang Seng declined 0.79 %, Jakarta Composite slid 0.65%, KLSE Composite dropped 0.25%, Nikkei 225 lost 0.82%, Straits Times tanked 0.93%, Seoul Composite was trading lower with a cut of 1.07% and Taiwan Weighted descended 0.82%
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