Benchmarks magnify gains; Sensex recaptures 27,000 mark

Indian equity benchmarks continued to break psychological levels one after other and were trading jubilantly in noon deals, breaching their crucial 27,000 (Sensex) and 8,850 (Nifty) bastions amid firm global cues. Barometer gauges managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks. Firm opening in European counters too supported the sentiment. Meanwhile, US Federal Reserve’s decision to keep interest rates near zero for a considerable time has boosted the sentiments of the market participants. Asian markets too were trading higher at this point of time led by Japanese market which surged over a percent toward a six-year high on a weaker yen.

Closer home, buying was visible in the broader markets with both the mid and small cap indices up nearly 2% each, outperforming the BSE benchmark index which gained over 1%. The rupee recovered marginally and was trading at 61 as compared to the previous close of 60.92/93. Almost all Asian currencies fall against US dollar.

Meanwhile, shares of real estate companies rallied on reports that the Real Estate (Regulation and Development) Bill, 2013 is likely to come up for consideration in Rajya Sabha in the forthcoming Winter Session. Buying in pharma space too aided the sentiments led by over 2% rally in Sun Pharmaceutical Industries after the drug maker said it has entered into a licensing agreement with Merck & Co Inc for investigational therapeutic antibody candidate, Tildrakizumab to be used for treatment of plaque psoriasis, a skin ailment.

The BSE Sensex is currently trading at 27011.88, up by 380.59 points or 1.43% after trading in a range of 26503.08 and 27012.08. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.72%, while Small cap index up by 2.54%.

The gaining sectoral indices on the BSE were Realty up by 4.14%, Consumer Durables up by 2.81%, Capital Goods up by 2.31%, Power up by 1.85%, PSU up by 1.58%. While there were no losers on the index.

The top gainers on the Sensex were BHEL up by 2.81%, HDFC up by 2.69%, Larsen & Toubro up by 2.59%, Wipro up by 2.56% and Tata Motors up by 2.38%. On the flip side, Hindustan Unilever down by 0.95%, Infosys down by 0.64% and Mahindra & Mahindra down by 0.33% were the top losers.

Meanwhile, tightening noose over wilful defaulters, the Securities and Exchange Board of India (Sebi) may soon issue guidelines to deal with them, given that there are no restrictions at present on such entities raising funds from the capital market.

An entity is declared a wilful defaulter by a lender if it defaults on loan repayments despite having the capacity to repay. Also, entities that use the loan amount for purposes other than specified ones could be declared wilful defaulters. The market regulator might deem wilful defaulters not ‘fit and proper’ from the perspective of accessing capital markets. The new framework will be applicable to those approaching the capital market for raising funds for the first time, as well as the listed companies and entities associated with it.

Recently, Reserve Bank of India (RBI) too has clarified that in cases where guarantees furnished by the companies within the group on behalf of the wilfully defaulting units are not honoured then such group companies should also be reckoned as wilful defaulters. The apex bank has said that banks can name company management as wilful defaulters. Similarly, group companies of a defaulting company can also be termed as wilful defaulters. According to the new clarification, guarantors who refuse to pay will also be treated as defaulters. The central bank had however clarified that these norms would be applicable only prospectively.

Sebi and the RBI are also planning increased coordination to ensure wilful defaulters are kept away from financial markets. Currently RBI shares data on wilful defaulters with Sebi, credit rating agencies and Credit Information Bureau of India on a quarterly basis and Sebi acts against those towards whom adverse orders are passed by other regulatory authorities.

The CNX Nifty is currently trading at 8081.90, up by 106.40 points or 1.33% after trading in a range of 7939.70 and 8083.75. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were DLF up by 3.81%, BHEL up by 2.92%, Larsen & Toubro up by 2.83%, Wipro up by 2.65% and Hero MotoCorp up by 2.63%. On the flip side, Hindustan Unilever down by 1.07%, Infosys down by 0.68%, Mahindra & Mahindra down by 0.15%, Tech Mahindra down by 0.12% and United Spirits down by 0.09% were the only losers.

Asian markets were trading mostly in the green; Straits Times increased 0.19 points or 0.01% to 3,296.67, Shanghai Composite increased 1.68 points or 0.07% to 2,309.58, Jakarta Composite increased 24.23 points or 0.47% to 5,212.41, Taiwan Weighted increased 41.86 points or 0.46% to 9,237.03 and Nikkei 225 increased 178.9 points or 1.13% to 16,067.57. On the flip side, Hang Seng decreased 244.04 points or 1% to 24,132.37, KOSPI Index decreased 14.87 points or 0.72% to 2,047.74 and FTSE Bursa Malaysia KLCI decreased 4.12 points or 0.22% to 1,839.66.

European markets got off to a positive start; with UK’s FTSE 100 trading higher by 2.34 points or 0.03% to 6,783.24, France’s CAC rising 7.55 points or 0.17% to 4,438.96 and Germany’s DAX increasing 36.5 points or 0.38% to 9,698.00