MARKETS FIRM

After making cautious start, key domestic bourses have turned firm as investors got some support from Confederation of Indian Industry's survey which showed that India's business confidence has bettered from the previous quarter, though it also pointed that concerns over stagnancy in reforms and rising cost of finance and raw materials still remain. The CII Business Confidence Index for the first quarter of the current fiscal (April-June) was pegged at 55, as against 52.9 in the last quarter of 2011-12.On global front, on Friday, stocks closed higher on the Wall Street on hopes that the Fed would continue with its bond buying programme to boost the economy while, Asian counters are exhibiting mixed trend at this point of time. Back home, Sensex and Nifty headed towards their crucial 17,300 and 5,250 level respectively supported by most of the key heavyweights along with broader indices. Moreover, except Auto, all other BSE sectoral indices were trading in the green, with Realty, software, PSU and technology each up by about a percentage point. Realty stocks edged higher on bargain hunting after recent losses. DLF, HDIL and Unitech rose between 1.50 to 2.00 percent. The broader indices too were going neck- in-neck with benchmarks. The market breadth on the BSE was positive; there were 1,009 shares on the gaining side against 495 shares on the losing side while 67 shares remained unchanged.

The BSE Sensex opened at 17,195.51; about 8 points higher compared to its previous closing of 17,187.34, and has touched a high of 17,324.13 while low remained its opening.

The index is currently trading at 17,297.45, up by 110.11 points or 0.64%. There were 24 stocks advancing against 6 declines on the index.

The overall market breadth has made a strong start with 64.23% stocks advancing against 31.51% declines. The broader indices were trading inline with benchmarks; the BSE Mid cap and Small cap indices rose 0.45% and 0.62% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.32%, IT up by 1.08%, PSU up by 0.98%, TECk up by 0.98% and Bankex was up by 0.89%. While, Auto down by 0.16% remained the lone loser on the index.

The top gainers on the Sensex were DLF up by 2.09%, TCS up by 1.83%, Tata Power up by 1.45%, Sterlite Industries up by 1.28% and Infosys was up by 1.15%.

On the flip side, Maruti Suzuki down by 2.19%, BHEL down by 2.03%, M&M down by 0.62%, Jindal Steel down by 0.43% and Bajaj Auto down by 0.20% remained the top losers on the Sensex.

Meanwhile, the International Monetary Fund (IMF) has stated that apart from cyclical factors such as global uncertainty and policy tightening, domestic factors like sluggish governance and slow pace of project approvals have weakened business sentiment in India. IMF happens to be the second international institution after S&P that has raised a red flag against the sluggish governance in the country.

In its Asia-Pacific Regional Economic Outlook, IMF has called for renewed efforts to revive the deteriorating structural reform agenda in the country. It has also stated that to improve business sentiment and therefore the investment climate, the government should remove infrastructure bottlenecks and expand education opportunities.

The report has devoted a special section on the possible demographics dividend for India due to a young population, but has urged the nation to step up efforts on education, facilitating trade and easing labour laws to maximize possible gains. It further goes on to say that it is important for India to make progress in reducing barriers to trade, in order to maximise the potential of its continuing demographic dividend.

As per IMF, fiscal consolidation is the key to contain inflationary pressures and create space for priority development needs. The corrective measures suggested are a reduction in fuel subsidy, fiscal consolidation, boosting infrastructure and spurring investment.

It observed that headline inflation has declined to 6.89% in March, from 6.95% in February. However IMF has warned that it is still above the historical average. More importantly IMF has lowered India's economic growth forecast to 6.9% in 2012, marginally lower than the earlier estimate of 7%. It however expects the growth to pick up to 7.3% in 2013.

The S&P CNX Nifty opened at 5,201.45; about 8 points lower compared to its previous closing of 5,209.00, and has touched a high of 5,251.25 and low remained its opening.

The index is currently trading at 5,243.40, higher by 34.40 points or 0.66%. There were 41 stocks advancing against 9 declines on the index.

The top gainers of the Nifty were RInfra up by 2.69%, TCS up by 2.18%, DLF up by 2.17%, Ambuja Cement up by 1.81% and PNB up by 1.55%.

On the flip side, Maruti Suzuki down by 2.03%, BHEL down by 1.87%, M&M down by 0.70%, Asian Paints down by 0.52% and Jindal Steel down by 0.51% remained the top losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite was down 27.71 points or 1.13% to 2,417.29, Hang Seng was down 320.77 points or 1.51% to 20,944.54, Jakarta Composite was down 25.20 points or 0.63% to 3,959.70, KLSE Composite was down 8.34 points or 0.52% to 1,580.88, Nikkei 225 was down 81.89 points or 0.84% to 9,616.70, Straits Times was down 34.00 points or 1.14% to 2,957.80, Seoul Composite was down 25.73 points or 1.28% to 1,990.33 and Taiwan Weighted was down by 134.05 points or 1.67% to 7,870.69. 

Asian markets were exhibiting mixed trade; Hang Seng was up 233.01 points or 1.12% to 20,974.46, KLSE Composite was up 4.01 points or 0.26% to 1,571.81 and Seoul Composite was up 2.59 points or 0.13% to 1,977.94.

On the flip side, Taiwan Weighted was down 0.20 points to 7,480.30, Straits Times was down 7.13 points or 0.24% to 2,974.45 and Jakarta Composite was down 13.69 points or 0.33% to 4,150.29.

Meanwhile, stock markets in Japan remained closed on Monday on account of Bridge Public Holiday while the Chinese bourses were shut owing to May Day holidays and will re-open directly on Wednesday.