Monday, April 4, 2011

MARKETS COME OFF THEIR HIGHS

The domestic stock market that opened higher from the previous week's levels on the back of higher inflows from foreign institutional investors (FIIs) and strong global markets, have come off from their highs as crude oil prices again stoked concerns relating to inflation and spikes in interest rates. Further fall in stocks related to a 2G probe also soured investor's sentiment as CBI on Saturday charged a former minister, Reliance ADA group and the Indian joint venture partners of Telenor and Etisalat, in a multi-crore telecoms licensing corruption scandal. However, the undertone still remains positive due to positive global cues as Asian stocks are trading higher, tracking the cues from Wall Street where stocks closed higher on Friday on the back of upbeat US employment data. US non-farm payroll employment increased by 216,000 in March following an upwardly revised increase of 194,000 jobs in February. Meanwhile, US future indices were trading mixed in the screen trade.
Back on Dalal Street, on the BSE sectoral front, Stocks from IT, TECk and PSU counters are showcasing strong performance while stocks from Realty, Oil & Gas and Power space are languishing at the bottom. Gains India's third largest software services exporter-- Wipro-- had a rub off effect on IT stocks as the IT stocks gained after the reports that the company will acquire the oil and gas information technology practice of US-based Science Applications International Corporation (SAIC) for $150 million. Both the benchmark indices are trading above their physiological level of 19400 (Sensex) and 5800(Nifty) respectively. While the broader indices continuing their winning streak for second consecutive session are faring well, as they continue to outperform their larger peers. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1846:475, while, 86 shares remained unchanged.
The BSE Sensex is currently trading at 19,472.09, up by 51.70 points or 0.27%. The index has touched a high of 19,566.29 and a low of 19,449.36 respectively. There were 16 stocks advancing against 14 declines on the index.
The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 1.07% and 1.62% respectively. 
The top gaining sectoral indices on the BSE were, IT up by 1.41%, TECk up by 1.08%, PSU up by 0.65%, Auto up by 0.57% and Metal was up by 0.56% while, Realty down by 0.37%, Oil & Gas down 0.35% and Power down 0.06%  were the lone loser on the index.
The top gainers on the Sensex were Hero Honda up by 1.81%, Infosys up by 1.67%, Mahindra & Mahindra up by 1.45%, Wipro up by 1.44% and Jindal Steel was up by 1.16%.
On the flip side, Reliance Communication down by 2.82%, Hindustan Unilever down by 2.06%, Reliance Infra down by 1.33%, CIpla down 1.18% and HDFC down by 1.17% were the top losers on the index.
Meanwhile, the high powered panel that has been tasked with rewriting the rules governing the Indian financial sector will begin its work from Tuesday when it meets for the first time. The exercise was announced by the government nearly a year ago to bring Indian financial sector laws in line with modern ways of conducting businesses and the constitution of the panel was announced last month.
The Financial Sector Legislative Reforms Commission (FSLRC), which is headed by former Justice B N Srikrishna, include 10 bankers, regulators, economists and sector experts as its members. The committee that will hold its first meeting on April 5 has been empowered to recommend the whole gamut of such changes that are required to be implemented in laws and regulations governing the Indian financial sector to make the system more robust.
"The FSLRC will remove ambiguity, regulatory gaps and overlaps among the various legislations making them more coherent and dynamic and help cater to the requirements of a large and fast growing economy in tune with the changing financial landscape in an inter-connected financial world," read an official release by the government in this respect adding that the committee would help usher the next generation of reforms.
The UPA government had faced a lot of criticism for its failure to push economic reforms in its last term due to its dependence on left parties. This time around when the UPA won elections with a better mandate and formed the government without support of left wing parties, it was hoped that it will finally boost the reform agenda. So far however, it has failed to live up to those expectations. The finance ministry is now hoping that the panel will help it bring the much needed legislative changes to help implement the next phase of reforms. 
Members of the commission include former PFRDA chairman Dhirendra Swarup, former chairman of Axis Bank P J Nayak, Prime Minister's Economic Advisory Council (PMEAC) member M Govinda Rao and IIM professor Jayant Verma, among others. The panel will study the financial sector regulators as a whole and is also likely to recommend on issues relating the current regulatory set up and interaction between different financial sector regulators.
The S&P CNX Nifty is currently trading at 5,840.90, higher by 14.85 points or 0.25%. The index has touched a high of 5,867.50 and a low of 5,833.20 respectively. There were 28 stocks advancing against 22 declines on the index.
The top gainers of the Nifty were IDFC up 2.22%, Hero Honda up by 1.77%, HCL Tech up by 1.65%, Infosys up by 1.65% and Sun Pharmaceuticals up by 1.57%.
RCom down by 2.95%, HUL down by 1.99%, Sesa Goa down 1.48%, Reliance Infra down by 1.40% and HDFC down 1.33% were the major losers on the index.
Asian markets were trading mostly in the green;Hang Seng surged 1.09%, Jakarta Composite added 0.14%, KLSE Composite inched up 0.09%, Nikkei 225 gained 0.34% and Straits Times rose 0.34%.
On the flip side, Seoul Composite declined 0.59% was the lone looser in the Asian pack.

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