Indian benchmarks come off day’s high levels; hold on psychological levels

Indian stock markets are continuing their good work and are holding on to the psychological 5,550 and 18,550 levels in the Wednesday afternoon session as optimistic investors are showing hefty buying interests across the board. Sentiments remained optimistic after reports that the Chinese economy expanded at a faster-than-expected rate of 9.5% in the April-June quarter from the year-ago period, giving a much needed psychological lift to the markets and easing worries over a global slowdown at a time when euro zone debt crisis is spreading to much larger nations. The halt in three session downtrend came post the drop in industrial output impelled speculations that the RBI may be forced to pause its monetary tightening measures after the longest stretch of rate increases in a decade. On the global front, majority of Asian markets rebounded after Tuesday's brutal drubbing however, the European counterparts opened with a negative bias after Moody's injected fresh worries into the market by downgrading Ireland's government bonds to junk status. On the sectoral front, investors piled up hefty positions in the high beta Real Estate and Consumer Durables counters a day after booking hefty profits in them. The oil and gas pocket too remained amid the thick of things as heavyweights like RIL and ONGC made their presence felt by surging 1.59% and 1.94% respectively. Though, there were no sectoral losers, however, some individual names like Tata Power and Infosys languished in the red terrain.

However, the broader markets appeared to be in a resurgent mood as they traded with around a percent gains, outperforming their larger peers by a small margin. The bourses gained on good volumes of over Rs 0.60 lakh crore while the market breadth on BSE was in favor of advances in the ratio of 1742:853 while 109 scrips remained unchanged.

The BSE Sensex is currently trading at 18,557.72 up by 146.10 points or 0.79% after trading as high as 18,594.12 and as low as 18,465.40. There were 24 stocks advancing against 6 declines on the index.

The broader indices were trading with smart gains; the BSE Mid cap index surged by 1.07% and Small cap climbed higher by 0.96% respectively. 

On the BSE sectoral space, Realty up 1.49%, Consumer Durables up 1.48%, Oil & Gas up 1.33%, Auto up 1.24% and PSU up 1.08% were the major gainers, while there were no losers on the index.

The top gainers on the Sensex were DLF up by 2.27%, ONGC up by 1.94%, Bharti Airtel up by 1.65%, RIL up 1.59% and M&M up 1.56%.

On the flip side, Tata Power down by 0.46%, HDFC down 0.42%, HUL down 0.41%, Wipro down 0.37% and Infosys down by 0.30% were the major losers on the index.

Owing to increased demand from western markets and from non traditional markets, government has set the target of $14 billion for garment exports in current financial year. Textiles Secretary Rita Menon on 12 July said 'We expect these exports to touch $14 billion as there is a good demand not only from traditional markets but also from new markets.'

During 2010-11, garment exports have registered growth of 4.2% to $11.1 billion from $10.7 billion in 2009-10. "The government pays high-emphasis on initiatives for promotion of apparel exports. Also, a number of new schemes including government support for the common compliance code and knitwear technology mission are proposed for the current year", Menon said.

United States and European Union account for 80% of India's total garment exports.

For the first two months of current financial year, garments exports have increased by 30% to $2.3 billion year-on-year basis, this jump in garment exports is due to the Technology Upgradation Fund Schemes (TUFS). In April 2011, Indian government restored TUFS by increasing 11 plan allocation to Rs 15,432 crore for Rs 8,000 crore. In TUFS, government subsidizes 5% of interest payment on loan sanctioned under the scheme.

Earlier the government had allocated Rs 8,000 crore under this scheme, however, it was exhausted by June 2010, and subsequently government had asked banks to suspend new sanctions under the scheme till allocation of funds. The S&P CNX Nifty is currently trading at 5,571.90, higher by 45.75 points or 0.83% after trading as high as 5,583.95 and as low as 5,541.40. There were 42 stocks advancing against 8 declines on the index.

The top gainers of the Nifty were Dr Reddy up by 3.05%, IDFC up by 2.80%, DLF up by 2.24%, ONGC up by 2.01% and Kotak Bank up by 1.95%.

Tata Power down by 0.71%, Wipro down 0.52%, HUL down 0.51%, HDFC down 0.49% and Infosys down 0.32% were the major losers on the index.

Asian markets are exhibiting positive trends as Shanghai Composite surged by 1.42%, Hang Seng climbed 0.79%, Jakarta Composite advanced 0.47%, Nikkei 225 gained 0.37%, Straits Times rose 0.30% and Seoul Composite soared by 0.94%.

On the flipside, KLSE Composite slid by 0.06% and Taiwan Weighted fell by 2.02%.

The European markets have opened on a mixed note as France's CAC 40 shed 0.58%, Germany's DAX added 0.10% and London's FTSE eased 0.07% 

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