GAINING STRENGTH

Indian equities gained strength to continue their firm trade in the late morning session. On the global front, the majority of Asian markets were trading in green on speculation that China and US, the world's two biggest economies will take more measures to spur economic growth. Back home, the Quick Estimates of Index of Industrial Production (IIP) with base 2004- 05 for the month of July 2012 came at 167.3, which is 0.1% higher as compared to the level in the month of July 2011. Manufacturing growth recorded contraction of 0.2% vs 3.1% y-o-y, Mining grew at -0.7% vs positive 0.7% and Basic Goods grew sharply lower, at the rate of 1.5% against 10% y-o-y. The traders were seen piling up position in Auto, Bankex and Realty sector, while selling was witnessed in Power and HC sector. Tata Motors, Mahindra & Mahindra, Bajaj Auto, and Maruti Suzuki India from Auto pack were seen trading in green edging the markets higher. DLF, Unitech, Oberoi Realty and Housing Development & Infrastructure from Realty pack were seen trading firm in green. Power majors NTPC, Power Grid Corp, BHEL, Reliance Infra and Siemens were capping the markets' gains while HC majors Cipla, Glaxosmithkline Pharmaceuticals, Divi's Laboratories and Glenmark Pharmaceuticals too were pressurizing the markets.

Meanwhile, the sentiments in the domestic market also remained jubilant after Reserve Bank of India relaxed guidelines for Indian companies to raise money overseas through external commercial borrowings (ECB). The maximum limit of ECB has been raised to 75% of the average foreign exchange earnings in the past three fiscal years, or 50% of the highest export earnings in any of the three years, or whichever is higher.

In the scrip specific development, Dr Reddy's Lab rose on launching Metoprolol Succinate ER tablets. VA Tech Wabag edged higher on bagging various orders worth Rs 86.60 crore. Tata Motors jumped on incorporating WOS 'PT Tata Motors Indonesia'. Oriental Bank of Commerce gained on inking pact with Piaggio vehicles. Godrej Properties surged on plan to develop residential complex in Gurgaon. Wipro gained as its arm enters into an association with BSRF as IT Partner.

The NSE Nifty and BSE Sensex were managing to hold their psychological 5400 and 17900 levels respectively. The market breadth on BSE was positive, in the ratio of 1467:714.

The BSE Sensex is currently trading at 17930.61 up by 77.66 points or 0.43% after touching a high of 17953.86 and low of 17904.04. There were 19 stocks advancing against 11 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.59% and Small cap index was up by 0.75%.

On the BSE sectoral space, Auto up by 0.98%, Bankex up by 0.69%, Realty up by 0.66%, PSU up by 0.57% and IT up by 0.52% were the gainers. While, Power down by 0.33% and HC down by 0.08% were the losers on the index.

The top gainers on the Sensex were Tata Motors up by 3.13%, Coal India up by 2.65%, Wipro up by 1.11%, TCS up by 1.03% and ICICI Bank up by 1.01%. On the flip side, Jindal Steel down by 3.36%, Cipla down by 0.86%, Hero MotoCorp down by 0.74%, Bharti Airtel down by 0.71% and BHEL down by 0.57% were the losers on the Sensex. 

Meanwhile, the Reserve Bank of India (RBI) in its bid to support the ailing India Inc has relaxed the guidelines for companies to raise money overseas through external commercial borrowings (ECB). The apex bank has allowed companies to raise more funds through ECBs to repay rupee loans or for new capital expenditure in rupees.

Earlier, a company which could have raised a maximum of 50 percent of its average export earnings in the past three fiscal years is now allowed to raise ECB to 75% of the average foreign exchange earnings in the past three fiscal years, or 50% of the highest export earnings in any of the three years, or whichever is higher.

However, in case of Special Purpose Vehicles (SPVs), which have completed at least one year of existence from the date of incorporation and do not have sufficient track record/past performance for three financial years, the maximum permissible ECB that can be availed has been limited to 50 per cent of the annual export earnings realized during the past financial year; and the maximum ECB that can be availed by an individual company or group, as a whole, under this scheme has been restricted to $3 billion.

Special emphasis has been given to infra companies and through a separate notification, the central bank has said that companies in the infrastructure sector can seek trade credit for up to a maximum period of five years for importing capital goods, up from one-to-three years previously. Under the new norms, trade credit, which is a short-term loan should not be for a period of less than 15 months and also not in the nature of short-term rollover finance. Also, the credit facility would be available up to $20 million per transaction for import of capital goods as classified by the Directorate General of Foreign Trade (DGFT). 

The S&P CNX Nifty is currently trading at 5,410.65, up by 20.65 points or 0.38% after trading in a range of 5,417.10 and 5,403.05. There were 29 stocks advancing against 20 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Tata Motors up by 3.14%, Coal India up by 2.20%, DLF up by 1.30%, Ambuja Cement up by 1.26% and ICICI Bank up by 1.14%. On the flip side, Jindal Steel down by 3.33%, Siemens down by 2.53%, Cipla down by 1.18%, Bharti Airtel down by 0.80% and Reliance Infra down by 0.80% were the losers on the index.

Most of the Asian indices were trading in green; Nikkei 225 up by 1.49%, Straits Times down by 0.30%, Kospi Composite Index up by 1.56%, Jakarta Composite up by 0.06%, Hang Seng index up by 0.96%, Taiwan Weighted up by 1.03% while Shanghai Composite down by 0.37% and KLSE Composite down by 0.03% were only the losers.