GAINING STRENGTH

Stock markets in India continued to move from strength to strength in Monday afternoon trades with the benchmark equity indices touching fresh intraday highs. The key indices surged by around a percent and have set their eyes on important psychological 16,400 (Sensex) and 4,700 (Nifty) levels. After a day's consolidation, optimistic market participants chose to hunt for fundamentally strong but undervalued bargains. Sentiments from across the globe remained sanguine as most Asian markets recovered after a cautious opening and traded with notable gains. The European markets too have got off to a strong start with most indices surging around a percent as investors drew some solace from opinion polls showing parties favoring Greece's bailout programs could be able to form a coalition government. On the domestic front, the rupee has extended its appreciation streak for third straight session as it strengthened to 55.02 against a dollar. However, the beleaguered currency failed to hold on to those levels and slipped to 55.17 to a dollar. Meanwhile, reports that the government has no immediate plans to raise the retail prices of diesel, kerosene and cooking gas, does not seem to have gone well with investors and they were seen squaring off positions from the PSU oil marketing companies like HPCL and BPCL which plunged between 1-2%. Post announcement from oil minister, not only the PSU OMCs but overall market sentiment has got dampened. On the BSE sectoral front, investors were seen piling positions in the Banking counter which jumped around one and half a percent, being the top gainer in the space. The high beta Capital Goods and Power pockets too traded with similar amount of gains, helping the frontline indices. However, some correction in Oil & Gas names like ONGC and GAIL, auto heavyweight Maruti Suzuki and FMCG major HUL capped the upside chances for the markets.

The broader markets too. continued to trade on a positive note with strong gains of around a percent in tandem with their larger peers. The bourses rose on good volumes of over Rs 0.7 lakh crore while the market breadth on BSE was in favor of advances in the ratio of 1521:888 while 89 scrips remained unchanged.

The BSE Sensex is currently trading at 16,372.02 up by 154.20 points or 0.95% after trading as high as 16,373.99 and as low as 16,273.49. There were 22 stocks advancing against 8 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index surged 0.92% and Small cap index climbed 0.92%.

On the BSE sectoral space, Bankex up 1.65%, Capital Goods up 1.50%, Power up 1.46%, Auto up 1.32% and Consumer Durables up 1.08% were the major gainers, while there were no laggards in the space.

BHEL up 3.38%, SBI up 3.09%, Tata Power up 2.52%, M&M up 2.35% and ICICI Bank up 2.03% were the major gainers on the Sensex, while Gail India down 2.47%, HUL down 1.19%, ONGC down 0.91%, Maruti down 0.85% and DLF down 0.40% were the major losers in the index.

Meanwhile, the government is expected to take a decision regarding 32 foreign direct investment (FDI) proposals on June 1, 2012. 19 are new proposals out of the 32, which include Sesa Goa, Pfizer and Mahindra and Mahindra. Three, are those which had been deferred in the earlier meeting and five are amended proposals. FDI request of G4S Secure Solutions, decision on which had been deferred in the previous meetings of the FIPB, will also be considered.

FDI in India is allowed through the automatic route in almost all sectors except those which are considered sensitive for the nation like defence and telecom. In these sectors permission has to be taken from Foreign Investment Promotion Board (FIPB).

The government has been taking steps to increase the foreign investment in the country by streamlining its procedure. It has recently allowed FIIs to invest up to 23% in commodity exchanges through automatic route.

India received the highest ever monthly FDI in the month of March 2012. This was to the tune of $8.1 billion. Cumulatively, FDI inflows for the fiscal 2011-12 amounted to $36.50 billion. Apart from the fact that foreign investment in the country has been increasing, Indian companies too have been making their presence felt in the international markets. According to the latest RBI data, Indian companies invested $2.67 billion in different countries in April.

The S&P CNX Nifty is currently trading at 4,966.60, up by 46.20 points or 0.94% after trading as high as 4,971.10 and as low as 4,931.30. There were 39 stocks advancing against 11 declines on the index.

The top gainers on the Nifty were BHEL up 3.39%, SBI up 2.95%, R Infra up 2.66%, Tata Power up 2.41% and Axis Bank up 2.24%.

GAIL down 2.73%, BPCL down 1.28%, Maruti down 1.08%, ONGC down 1.01% and HUL down 0.95% were the major losers on the index.

In the Asian space, Shanghai Composite surged 0.92%, Hang Seng rose 0.45%, KLSE Composite inched up 0.03%, Nikkei 225 added 0.15%, Straits Times Index climbed 0.82% and Taiwan Weighted soared 0.91%.

On the other hand, Jakarta Composite got pounded by 3.91%.

Stock markets in South Korea remained closed on Monday for a public holiday on account of Gautama Buddha's birthday.

The European markets got off to a positive start as France's CAC 40 surged 1.27%, Germany's DAX gained 1% and United Kingdom's FTSE rose 1.11%.