The frontline Indian stock indices jumped in early morning trades, with the BSE Sensex nearly hitting 18,500 and the NSE Nifty surpassing the 5,500 milestone. Both the main indices are up almost 2%. It clearly is a day for the Large-Cap stocks, with the broader indices under-performing. The overall market breadth is quite healthy with very few losers. All the sectoral indices on the two main exchanges are up and about while the INDIA VIX has taken a beating today.
At 9:22am (IST), the BSE Sensex was trading at 18,346., up 325 points over the previous close. It had earlier touched a day's high of 18,456 and a day's low of 18,284. It opened at 18,024.
The NSE Nifty was quoting at 5,534, up 98 points over the previous close. It earlier touched a day’s high of 5,564 and a day’s low of 5,526. It opened at 5,528.
RIL, Infosys, TCS, Wipro, ONGC, ICICI Bank, Tata Power, HDFC Bank, Coal India, Bajaj Auto, L&T,. Tata Motors, SBI, M&M, Dr Reddys Lab, NTPC are among gainers in BSE Sensex and Nifty.
The BSE Small-Cap index and BSE Mid- Cap index was trading at 1%.
PSU, Auto, Power , Realty, FMCG,Oil and Gas, Metal, HC, Teck and IT, Capital Goods,Bankex indices are the gainers.
The Metals index is the biggest gainer so far, up ~3% while the Banking and Realty indices are up 2.7% and 2.5%, respectively. Oil & Gas, Auto, PSU, Capital Goods, Power and IT indices are up 1.5-2%. Consumer Durables, FMCG and Pharma indices have advanced less than 1%.
Shares of state-run downstream and upstream oil companies such as IOC, BPCL, HPCL, Gail, ONGC and Oil India are among the top leaders after the Government announced a steep hike in diesel prices and slashed LPG subsidy while leaving prices of petrol and kerosene unchanged. Cairn India is another noteworthy gainer amid high crude oil prices. Metal shares have rallied amid speculation that stimulus measures by the US, Europe and China will revive demand for the industrial commodities. Banking, Realty and Auto shares are also up on hope that the RBI will on Monday announce marginal reduction in policy rates.
IT shares have also gained on optimism that the launch of a QE3 by the US Federal Reserve and the stimulus announced by Europe and China recently will boost global economic growth and prompt companies around the globe to step up their spending on Information Technology.
PSU shares have advanced ahead of an important Cabinet meeting later in the day where the Government is likely to consider a few proposals for disinvestment.
Essar Oil has rallied after a favourable ruling from the Supreme Court ruling has cut the company's tax bill by US$327 million towards the outstanding sales tax payable to the Gujarat government.
Shares of aviation companies - Jet Airways, Kingfisher Airlines and SpiceJet - have extended gains from the previous session amid news that the Cabinet will today take up the proposal to allow FDI into the civil aviation sector.
Fueling the frenzy is the fact that the Government has finally bit the bullet on regulated fuel prices. The pleasant surprise from UPA II comes just when the markets were starting to lose hope of any meaningful reforms.
Not surprisingly, the Opposition and couple of allies are up in arms against the fuel price revisions. One only hopes that the Government will not yield to any political pressure and roll back. More good news is in store as the Cabinet will consider FDI in Aviation and few disinvestment proposals today.
Its raining good news globally too, as the ongoing global “risk-on” sentiment received a shot in the arm in the form of a QE3 from the US Federal Reserve. The dollar is down, which has sparked a rally in commodities. The euro has hit US$1.30. Asian markets have already given a thumbs-up to the Fed move.
Although the current rally certainly has received a leg-up, the markets have already had a good run lately, with the main indices at seven-month highs. So, there is scope for some cooling from higher levels. Watch out for WPI inflation for August. All eyes will be on the RBI, which meets on Monday to review its monetary policy.
Indian stock indices ended on a flat note on Thursday, with the NSE Nifty turning into a ‘doji star’ on candlestick near breakout levels of 5450. The announcement of a QE3 by Federal Reserve on Thursday will break the indecisive trend on the upside. The Nifty could take a shot at its 52 week high of 5630 in the near term, provided global cues are supportive and FII inflows remain positive. We expect the broader markets also to continue participation in the ongoing rally.
Trend in FII flows: The FIIs were net buyers of Rs 3.61bn in the cash segment on Thursday while the domestic institutional investors (DIIs) were net sellers of Rs 1.56bn, as per the provisional figures released by the NSE.
The FIIs were net sellers of Rs 4.04bn in the F&O segment on Thursday, according to the provisional NSE data.
The foreign funds were net buyers of Rs 5.8bn in the cash segment on Wednesday, according to the SEBI figures.
Global Data Watch Today: EU EcoFin Meeting, Japan Industrial Production (Jul), Japan Capacity Utilization (Jul), EU Consumer Price Index – Core (Aug), EU Consumer Price Index (Aug), EU Employment Change (Q2), EU European Council Meeting, US Consumer Price Index (Aug), US Consumer Price Index - Core (Aug), US Retail Sales (Aug), US Retail Sales (ex-Autos) (Aug), US Industrial Production (Aug), US Capacity Utilization (Aug), US Reuters/Michigan Consumer Sentiment Index (Sep) and US Business Inventories (Jul).