INDIA MARKETS UPDATE

The Indian equity markets have rallied in the early trade tracking positive cues from Asian counterparts. Decline in crude prices also aided the sentiments. Most of the Asian counterparts were trading in the positive terrain led by Japanese stocks which rose about four percent at this point of time, indicating strong investors' sentiments. Back home, sustained buying in key heavyweights along with broader indices supported NSE's -- Nifty -- and BSE's -- Sensex -- to regain its crucial 5,500 and 18,300 mark, respectively. Consumer durables witnessed the maximum gain in trade followed by realty and metal with no losers on the BSE sectoral space. PSU oil marketing companies like BPCL, HPCL and IOC all were trading with a gain in the range of 1.5%-3% as the international crude prices has witnessed steepest fall in last few months. Moreover, the broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,317 shares on the gaining side against 369 shares on the losing side while 53 shares remained unchanged.

The BSE Sensex opened at 18,263.68; about 96 points higher compared to its previous closing of 18,167.64, and has touched a high of 18,378.86 while low remain its opening.

The index is currently trading at 18,345.18, up by 177.54 points or 0.98%. There were 28 stocks advancing against just 2 declines on the index.

The overall market breadth has made a strong start with 75.73% stocks advancing against 21.22% declines. The broader indices were out performing benchmarks; the BSE Mid cap and Small cap indices surged 1.22% and 1.29% respectively. 

The top gaining sectoral indices on the BSE were, CD up by 1.57%, Realty up by 1.49%, Metal up by 1.29%, Bankex up by 1.22% and PSU was up by 1.18%. While there were no losers on the index.

The top gainers on the Sensex were Reliance Infra up by 2.51%, Sterlite Industries up by 1.90%, Reliance Communication up by 1.83%, ICICI Bank up by 1.69% and HDFC was up by 1.65%.

HUL down by 1.77% and Hero Honda down by 0.25%, were the only losers on the index.

Meanwhile, in the wake of rising inflation, volatility of markets, increase in crude oil prices and foreign investors pulling their money out of India, the government is mulling over scrapping the contentious Press Note 1 of 2005, a move that would let all foreign investors go solo or set up a new joint venture (JV) in the same line of business where they already have a JV in India.

Press Note 1 of 2005 seeks to protect the interest of domestic companies in JVs by ensuring that foreign companies obtain the permission of their local partner, if they decide to go it alone or partner with another Indian company in the same line of business as the existing venture. Press Note 1 requires the foreign investor to get a no-objection certificate (NOC). The NOC has to be obtained under the supervision of the Foreign Investment Promotion Board (FIPB).

The Committee of Secretaries (CoS) under the chairmanship of Cabinet Secretary KM Chandrasekhar will take the decision regarding the same soon as it is restricting several foreign firms to invest in India and a positive step in this direction will help the country to attract more foreign direct investment (FDI), at a time when India's FDI has shown a fall. Getting FIPB approval and NOC from Indian partners is a time-consuming exercise, which is a hurdle to multinational companies (MNC) keen to invest in India and which is leading to MNCs bypassing India to invest in China.

Meanwhile, the relaxed guidelines will enable foreign companies to invest in India without these hurdles leading to free flow of foreign investments. India's FDI during April-January 2010-11 declined by 25% to $17 billion from $22.9 billion in the same period last year. The government in the Union Budget 2011-12 had announced various other policy initiatives to attract foreign investments.

The S&P CNX Nifty opened at 5,475.95; about 26 points higher compared to its previous closing of 5,449.65, and has touched a high of 5,511.25 while low remain its opening.

The index is currently trading at 5,502.05, higher by 52.40 points or 0.96%. There were 47 stocks advancing against just 3 declines on the index.

The top gainers of the Nifty were Reliance Capital up by 2.93%, Reliance Infra up by 2.64%, BPCL up by 2.41%, Sterlite Industries up by 1.97% and Suzlon up by 1.95%.

HUL down by 1.98%, Hero Honda down by 0.46% and GAIL was down by 0.31%, were the major losers on the index.