MARKET GATHERS MOMENTUM

Local equity market after trading flat in the start with little direction from the world markets has now picked up pace on the back of selective buying by cautious investors.  Though the market breadth is positive at the moment but the investor sentiment seems to be cautious too ahead of the food inflation data which is due to be announced in the noon, while, the global fears of escalation of violence in Egypt, has also kept investors wary. On the global front, barring Japanese market all other major Asian markets are closed on account of a public holiday to mark the Lunar New Year. The US future indices too are showing sign of fatigue after US markets consolidated overnight, despite good jobs report and corporate earnings announcement that were mostly in line with the expectation. Back to the domestic markets, both the barometer indices at the moment are building up with a gain of 194 points (Sensex) and 55 points (Nifty) respectively. In the similar fashion, the broader indices too have gained some traction as they are ruling up by 0.45% (Midcap index) and 0.43% (Small cap index) respectively on the BSE. On the sectoral front, all the 13 sectoral indices were trading in green, however leading the rally were the stocks from Realty, Metal and TECk sector. The overall market breadth on BSE was in favour of advances outnumbering declines in the ratio of 1242:888, while, 83 shares remained unchanged.

The BSE Sensex is currently trading at 18,284.84, up by 194.22 points or 1.07%. There were 26 stocks advancing against 3 declines on the index.

The broader indices too gained some traction; the BSE Mid cap was up by 0.45% while Small cap was up by 0.43%.

The top gaining sectoral indices on the BSE were, Realty up by 1.83%, Metal up by 1.31%, TECk up by 1.03%,  Bankex up by 0.97% and Auto up by 0.97%. While there were no losers on the index.

The top gainers on the Sensex were DLF up by 3.50%, Hero Honda up by 2.89%, Hindalco Inds up by 2.83%, HUL up by 2.33% and Bharti Airtel too was up by 2.32%.

RCom down by 1.32%, Reliance Infra down by 0.14%, Tata Power down by 0.07% and NTPC down by 0.03% were the only losers on the index were.

Meanwhile, Union Commerce and Industry Minister Anand Sharma have said that some more sops for exporters would be announced soon for labour intensive export sectors. India's exports have been showing strong growth in recent months in the range of 20-30%. Sharma however, said that sops will be announced notwithstanding the high growth seen in shipments as these will generate more employment.

Although Sharma refused to give any details at this stage on what industries might get such sops or when these would be announced, analysts feel that a few days prior to the budget, the minister may make some announcement. Also, sectors like textile, leather goods and handicrafts are more likely to get additional sops as there is much more potential of job creation in these sectors.

With regard to iron ore exports, he said that India has adequate iron ore amounting to exportable surplus and rejected the steel ministry's opposition to renewing of NMDC's long-term agreement (LTA) with Japanese steel mills for exporting the crucial raw material. Sharma said that since domestic steel capacity was not enough for absorbing total domestic output, there was no reason to snap ties with Japan as far as iron ore was concerned.

"The issue is, we cannot stop iron ore mining nor can we stockpile it as it could unleash environmental hazards, Besides, the GoM constituted for the purpose has categorically ruled against discontinuing exports to Japanese Steel Mills," the commerce minister said adding that as and when the domestic demand increases, the exporters would obviously prefer to sell in local markets as it would save on transportation costs which get divided between shipper and importer.

Following the global economic crisis that hit the world economy in September 2008, India's exports declined for thirteenth consecutive months before turning into green in November 2009. While there were apprehensions as the low base effect wanes, growth in shipments will slowdown towards end of 2010. This however has not happened and exports hit 33-month high in December 2010, indicating the the sops announced for exporters like the focus product and market schemes were helping the country widen its basket and direction of trade. 

The S&P CNX Nifty is currently trading at 5,486.80, up by 54.80 points or 1.01%. There were 40 stocks advancing against 9 declines while two scrips remain unchanged on the index.

The top gainers of the Nifty were DLF up by 3.59%, Hero Honda up 3.30%, Hindalco Inds up by 2.92%, HUL up by 2.71% and Bharti Airtel up by 2.57%.

The top losers of the index were ACC down by 1.49 %, BPCL down by 1.08 %, RCom down by 1.03%, Sunpharma down by 1.02 % and Dr Reddy was down by 0.66%.

All the Asian markets barring Japanese indices remained closed today on account of Lunar New Year Day holiday; Nikkei 225 declined 29.08 points or 0.28 % to 10,428.36.