MARKETS CONSOLIDATING

The Indian equity markets have started the first day of FY 2011-12 on a positive note tracking good gains from Asian counterparts. All the Asian peers were trading in the positive terrain at this point of time. While the US markets made a mixed closing overnight, though the economy news was good but the crude prices rising to 30 months high weighed on. Back home, sustained buying by foreign funds and ease in inflation has boosted investors' sentiments and kept the market on the positive side. Fast moving consumer goods witnessed the maximum gain in trade followed by oil and gas and realty while, banking, public sector undertaking and technology stocks remained the only losers on the BSE sectoral space. The broader indices were outperforming benchmarks. Meanwhile, Paper stock, AP Paper Mills again locked in circuit in the early trade and gained about 10% as in a surprising deal of International Paper Company, the US based paper and packaging giant, has bought 53.5% stake in Andhra Pradesh Paper Mills from its promoters for around Rs 1,160 crore. The market breadth on the BSE was positive; there were 1,118 shares on the gaining side against 517 shares on the losing side while 51 shares remained unchanged.

The BSE Sensex opened at 19,463.11; about 18 points higher compared to its previous closing of 19,445.22, and has touched a high of 19,562.55 while low remain its opening.

The index is currently trading at 19,494.84, up by 49.62 points or 0.26%. There were 20 stocks advancing against 10 declines on the index.

The overall market breadth has made a strong start with 66.31% stocks advancing against 30.66% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.51% and 0.67% respectively. 

The top gaining sectoral indices on the BSE were, FMCG up by 0.87%, Oil and Gas up by 0.78%, Realty up by 0.78%, CG up by 0.72% and Power was up by 0.69%. While Bankex down by 0.80%, PSU down by 0.09% and TECk down by 0.02% were the only losers on the index.

The top gainers on the Sensex were RCom up by 3.16%, Reliance Infra up by 2.36%, Hero Honda up by 2.05%, Hindalco up by 1.51% and ONGC was up by 1.50%.

On the flip side, SBI down by 1.22%, ICICI Bank down by 0.86%, Bharti Airtel down by 0.84%, Tata Motors down by 0.83% and Tata Power down by 0.76% were the top losers on the index.

Meanwhile, India is considering wrapping up comprehensive trade pacts with Thailand and Indonesia, eyeing the public health, education and accountancy sectors in the two Asean members. The two agreements will usher in a new era of co-operation and broad-basing of economic relationship between India and the two East-Asian economies.

Singapore was the first Asean member to sign a Comprehensive Economic Partnership Agreement (CEPA) with India in 2006. This was followed by the Malaysian CEPA earlier this year, which will be implemented in July. Both Thailand and Indonesia are highly interested in bilateral trade deals.  However, Indonesia is going slow. It is important for India to sign CEPAs, which include goods and services, with individual Asean members to be able to access the vast services market in the region. India completed negotiations with Japan and Malaysia for a CEPA.

At present the demand for professional services in these countries are being met by countries like Australia, New Zealand and to some extent China. The three countries have preferential access to the two markets through comprehensive trade deals. India too can compete once it signs its bilateral pacts.

India's negotiations with the 10-member Asean on a services and investments pact is moving at a slower pace, with the next round scheduled for May. India and the Asean implemented a free-trade agreement in goods earlier this year, which is yet to be ratified by Vietnam and the Philippines. The two above mentioned trade pacts could allow Indian professionals longer duration visas, easier renewals and relaxation of criteria such as the economic needs test. In the economic needs tests a firm hiring a foreigner must prove there is an economic need for it, which can't be fulfilled by domestic workers. Malaysia has offered similar concessions to the country.

The S&P CNX Nifty opened at 5,835.00; about 2 points higher compared to its previous closing of 5,833.75, and has touched a high and a low of 5,860.20 and 5,832.15 respectively.

The index is currently trading at 5,840.35, higher by 6.60 points or 0.11%. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were Reliance Capital up by 3.67%, RCom up by 2.97%, Ranbaxy up by 2.31%, Reliance Power up by 2.30% and Grasim up by 2.08%.

BPCL down by 1.72%, PNB down by 1.67%, HCL Tech down by 1.67%, Ambuja Cement down by 1.15% and SBI was down by 1.14%, were the major losers on the index.

All the Asian peers were trading in the green. Shanghai Composite was up 7.16 points or 0.24% to 2,935.28, Hang Seng was up 38.32 points or 0.16% to 23,565.84, Jakarta Composite was up 28.56 points or 0.78% to 3,707.23, KLSE Composite was up 3.80 points or 0.25% to 1,548.93, Nikkei 225 was up 32.36 points or 0.33% to 9,787.46, Straits Times was up 9.34 points or 0.30% to 3,115.19, Seoul Composite was up 6.78 points or 0.32% to 2,113.48 and Taiwan Weighted was up by 1.81 points or 0.02% to 8,685.11.