Business

Sensex reclaims 29,000 in opening trades; financials rally

Markets opened higher, amid firm global cues, led by financials with insurance subsidiaries after the Rajya Sabha on Thursday passed the Insurance Bill which permits increase in FDI limit to 49% in insurance.

By 9:27, the Sensex was higher by 134 points at 29,065 and the Nifty slipped 36 points at 8,812.

According to Angel Broking’s report, “The trend deciding level for the day is 28,891/8,765 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 29,010–29,090/ 8,798–8,820 levels. However, if NIFTY trades below 28,891/8,765 levels for the first half-an-hour of trade then it may correct towards 28,812–28,693/8,744–8,711 levels.”

On the macro-economic front, industrial growth slowed to 2.6% in January, against 3.2% in December 2014. The combined consumer price index (CPI) data for rural & urban for February increased to 5.4% in February from revised 5.2% in January. Food items were major contributors to the CPI inflation increase in February 2015.

Meanwhile, foreign institutional investors were net buyers in equities to the tune of Rs 733 crore, as per provisional stock exchange data.  

GLOBAL MARKETS

On Wall Street, US shares rallied on Thursday, but the S&P 500 was still on track to post its third consecutive weekly decline, hit by the prospect of higher US interest rates and the effect of the strong dollar on corporate earnings.

Asian shares shook off early losses on Friday, underpinned by overnight gains on Wall Street, while the dollar steadied after its recent rally ran out of steam on disappointing retail sales data.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up about 0.1% on the day. It was well off 7-week lows plumbed earlier in the week but still on track for a weekly loss of around 2%.

Japan’s Nikkei stock average was up 0.9% ahead of Friday’s settlement for Nikkei futures and options contracts expiring in March. Investors with long positions in Nikkei futures would like to see them settle at a higher price.

SECTORS & STOCKS

BSE Bankex, Consumer Durables, Capital Goods, Metal, Realty and Power indices were trading higher by nearly 1% each. Infact, all the sectoral indices are trading in positive zone.

Financial firms with insurance subsidiaries such HDFC, ICICI Bank, SBI and Axis Bank have surged between 1-2%.

The Bill, already passed by the Lok Sabha, seeks to increase the cap on foreign direct investment (FDI) in the insurance sector from 26 to 49%.

Capital Goods majors like L&T and BHEL have gained nearly 1%. Index of industrial production (IIP) increased 2.6% in January 2015, compared with the revised growth of 3.2% recorded in December 2014. The IIP growth for December 2014 has been scaled up sharply to 3.2% at the first revision compared with 1.7% reported provisionally.

NTPC has gained around 0.5%. The company has issued bonus debentures of Rs 10,307 crore, the largest ever by any Indian company.

Other notable gainers are Bharti Airtel, Sesa Sterlite, and Coal India.

On the losing side, Bajaj Auto, HUL, Wipro, Tata Motors and Sun Pharma have slipped between 0.2-1%.

Among broader markets, BSE Midcap and Smallcap indices are up 0.4-0.6%.

Market breadth in BSE is positive with 903 advances against 373 declines.