Benchmark equity indices extended their winning streak for the third straight session on Friday supported by the strong global cues and value picking by the investors throughout the day. The markets kicked off trade in style with gap-up opening across the broader indices but the key indices pared some of their early gains in the post-noon session as profit taking dragged the blue-chip stocks lower and then the benchmarks remained in a tight-range till the end of the day’s trade. The marketmen rushed for public sector undertaking stocks after the government cleared the roadmap for disinvestment of state-owned companies. Realty and metal counters also witnessed good buying during the session. On the other hand, fast moving consumer goods and auto sector stocks were targeted by the bears in trade. From heavyweights, Jaiprakash Associates, Tata Steel and State Bank of India (SBI) were the biggest gainers while Tata Power tumbled over 3.5% after the company announced that it launched $250 million fund raising process through Foreign Currency Convertible Bonds (FCCBs). The Mid-cap and Small-cap indices outperformed their larger counterparts in day’s trade. The positive market breadth on the BSE stood at 1944:780 while 63 remained unchanged. Finally, the BSE’s 30-share Sensex added 94.38 points or 0.59% to settle at 16,158.28, while the 50-share S&P CNX Nifty gained 30.60 points or 0.64% to end at 4796.15.
The BSE Sensex touched a high and a low of 16,283.86 and 16,075.19, respectively during the trade. Jaiprakash Associates up 4.76%, Tata Steel up 3.08%, SBI up 3.06%, Sterlite Industries up 2.21% and L&T up 2.17% were the major gainers on the benchmark.
On the other hand, Tata Power down 3.84%, Hindustan Unilever down 2.12%, Hero Honda down 1.98%, ITC down 1.53% and Tata Motors down 1.06% were the major losers on the Sensex.
The BSE Mid-cap and Small-cap indices soared 2.27% and 2.24%, respectively.
Indian government finally cleared the roadmap for disinvestment on Thursday, putting an end to speculations on the issue. While the UPA government was expected to take up stake-sale efforts in a big way after being elected for the second time and with a stronger mandate, there has been a lot of tussle between various partners of the coalition on the issue.
Nonetheless, Prime Minister Manmohan Singh approved a plan to sell stake in government owned companies on Thursday giving a push to the much debated issue. Government is likely to raise at least Rs 60,000 crore and reduce its market borrowing. It is also likely to spend the money on infrastructure development like roads and highways.
Among sectoral indices on the BSE, Public Sector Undertaking (PSU) up 3.91%, Realty up 2.81%, Metal up 2.03%, Bankex up 1.75% and Capital Goods (CG) up 1.70% were the main gainers.
MMTC (up 20%) from PSU, Phoenix Mill (up 9.73%) from Realty, NMDC (up 10%) from Metal, Yes Bank (up 6.01%) from Bankex and Reliance Industrial Infrastructure (up 13.97%) from CG were the top gainers on the respective indices.
Fast Moving Consumer Goods (FMCG) down 0.95% and Auto down 0.06% were the only losers on the BSE sectoral space.
The Department of Telecom (DoT) has informed that the telecom regulator TRAI has sought to take the view of the industry on the issue of uniform license fee. The regulator is expected to take nearly two months to clear the decks. And hence, DoT will wait till the TRAI comes out with its recommendations on the same.
The DoT has favoured a replacement of the existing variable license fee structure for telecom operators with a uniform one, proposed at 8.5% for all types of services from the current 6-10%. On the other hand, TRAI has invited stakeholders’ response on advantages and disadvantages of a uniform license fee and whether a uniform license fee across regions could be implemented. The DoT’s decision is not so much binding on TRAI’s proposal, but the final recommendations will cover the arguments of the department as well.
The S&P CNX Nifty touched a high and a low of 4836.20 and 4764.85, respectively.
The top gainers on the benchmark were Suzlon up 6.56%, Jaiprakash Associates up 5.37%, Ranbaxy up 4.17%, IDFC up 3.91% and Tata Steel up 3.04%.
Idea down 5.23%, Tata Power down 4.06%, Hero Honda down 2.41%, Ambuja Cement down 2.39% and Hindustan Unilever down 2.30% were the main losers on the Nifty.
The Indian government is likely to unveil a composite fiscal package to help the plantation sector whose problems have increased following the free trade agreement (FTA) that India has signed with the 10 member Association of Southeast Asian Nations (ASEAN).
Under the FTA, India has agreed for gradual reduction in import on a range of commodities including pepper, black tea, coffee and palm oil etc. Even as the duty reduction is to be phased out over a 10-year period, various pressure groups and the growers’ organisations have raised concerns on long run implications of the trade pact.
European markets were trading mostly in the red. France’s CAC 40 dropped 0.18% and Germanys’ DAX shed 0.09% while Britain’s FTSE 100 added 0.09%,
The Asian markets managed an all green close on Friday. All the major indices made a good start and traded in the green throughout the day, though some of the indices could not keep up the early pace but even then managed a close with gains.
Hang Seng closed at 21,829.72, up by 350.64 points or 1.63%, Nikkei 225 closed at 9,789.35, up by 71.91 points or 0.74%, Taiwan Weighted was up by 45.59 points or 0.61% to 7,463.05, Straits Times was up by 28.86 points or 1.10% to 2,658.21 while the Shanghai Composite closed at 3,164.04, up by 8.98 points or 0.28%.
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