IT stocks edge higher as rupee drops

Key benchmark indices hovered in positive terrain in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 108.53 points or 0.42%, up about 60 points from the day's low and off close to 45 points from the day's high. The market breadth indicating the overall health of the market was positive. With the Sensex and the Nifty, both, hitting record high, Indian stocks are witnessing a pre-Budget rally amid expectations that Finance Minister Arun Jaitley will announce measures in the Budget aimed at bolstering economic growth.

IT stocks rose as rupee edged lower against the dollar, with TCS hitting record high. IDFC gained after a foreign investment bank upgraded the stock to overweight from underweight.

At 11:20 IST, the S&P BSE Sensex was up 108.53 points or 0.42% to 26,070.59. The index jumped 154.67 points at the day's high of 26,116.73 in early trade, a lifetime high of the index. The index rose 49.51 points at the day's low of 26,011.57 in morning trade.

The CNX Nifty was up 24.20 points or 0.31% to 7,775.80. The index hit a high of 7,791.40 in intraday trade, a lifetime high of the index. The index hit a low of 7,759.90 in intraday trade.

The market breadth indicating the overall health of the market was positive. On BSE, 1,516 shares gained and 1,024 shares fell. A total of 83 shares were unchanged.

The BSE Mid-Cap index was up 28.25 points or 0.3% at 9,574, underperforming the Sensex. The BSE Small-Cap index was up 74.51 points or 0.71% at 10,582.54, outperforming the Sensex.

IT stocks rose as rupee edged lower against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. Tech Mahindra (up 1.15% to Rs 2,140), HCL Technologies (up 1.24% to Rs 1,498.85), Wipro (up 1.08% to Rs 553.40) and Infosys (up 2.44% to Rs 3,310.15) gained.

TCS rose 1.96% to Rs 2,457 after hitting record high of Rs 2,465.50 in intraday trade.

IDFC gained 4.33% to Rs 139.75 after a foreign investment bank upgraded the stock to overweight from underweight. The investment bank has reportedly cited potential benefits for IDFC after Reserve Bank of India (RBI) Governor Raghuram Rajan hinted at the possibility of exempting banks from liquidity ratio norms when raising debt for infrastructure. The investment bank also said IDFC's under-performance recently may be unjustified given its good management, strong balance sheet, and diversified financial presence. IDFC in April this year received in-principle approval for banking license from the Reserve Bank of India.

Key benchmark indices edged higher in early trade after provisional data showed that foreign investors remained net buyers of Indian stocks on Friday, 4 July 2014. The barometer index, the S&P BSE Sensex, hit record high, crossing the 26,000 mark for the first time. The 50-unit CNX Nifty also scaled record high. Key benchmark indices pared initial gains in morning trade. Key benchmark indices hovered in positive terrain in mid-morning trade.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 943.19 crore on Friday, 4 July 2014, as per provisional data from the stock exchanges

The market has entered a crucial week. Railway Minister Sadananda Gowda will present the final Railway Budget for 2014-15 in Lok Sabha tomorrow, 8 July 2014. On Wednesday, 9 July 2014, the Finance Ministry will table Economic Survey for 2013-14. Jaitley will present the final Union Budget for 2014-15 in Lok Sabha at 11:00 IST on Thursday, 10 July 2014. After a clear mandate in Lok Sabha elections this year and with BJP perceived as a business friendly party, expectations from the Budget are running high.

There are expectations that the finance minster will announce measures in the Budget aimed at bolstering economic growth. Increase in outlay on infrastructure sector with focus on stricter and time-bound implementation of projects, initiatives towards investments in agriculture and irrigation aimed at easing supply bottlenecks for food-grains, fiscal prudence with roadmap to reduce the fiscal deficit, a roadmap for reducing the subsidy burden and timeline for implementation of the Goods and Services Tax are some of the expectations from the Budget.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 59.885, compared with its close of 59.72/73 on Friday, 4 July 2014.

Most Asian stocks edged lower on Monday, 7 July 2104, amid speculation a stronger US labor market means the Federal Reserve may raise rates sooner than previously anticipated. Key benchmark indices in China, South Korea, Hong Kong, and Japan were off 0.12% to 0.37%. Key benchmark indices in Taiwan, Indonesia and Singapore were up 0.01% to 0.97%.

Business activity in emerging markets expanded last month at its fastest rate since March 2013, boosted by strong growth in China and India, a survey showed today, 7 July 2014. HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys jumped to 52.3 in June - well above the 50 threshold that indicates expansion - from 50.6 in May.

Trading in US index futures indicated that the Dow could fall 13 points at the opening bell on Monday, 7 July 2014. US markets were closed on Friday, 4 July 2014, for Independence Day holiday.

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