Markets escalate to day’s high on continued buying activities; Nifty trades past 8100 mark

Going from strength to strength, local equity markets were now trading near day’s high point on the back of aggressive buying activities by both funds and retail investors amidst positive global cues mainly after US Federal Reserve decided to keep interest rates near zero for 'a considerable time'. Receiving a positive handover from Asian counterparts, European shares too were trading in fine fettle also after Fed reaffirmed its commitment to keep interest rates near zero for 'a considerable time',and repeated concerns over slack in the labor market, standing firm against calls to overhaul its policy statement. At day’s high, both Sensex and Nifty were trading above psychologically crucial 27,050 and 8,100 levels respectively, with gains of over one and half a percent. Meanwhile, broader indices outperforming larger peers with fat margins were trading higher with gains in the range of 1.60%-2.50%.

With the across the board buying activity, none of the sectoral indices was reeling under pressure, nevertheless stocks from Realty, Capital Goods and Consumer Durables counters were the top gainers of the session. 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. Meanwhile, 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 overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 2105:806; while 90 shares remained unchanged.

The BSE Sensex is currently trading at 27078.84, up by 447.55 points or 1.68% after trading in a range of 26503.08 and 27086.61. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.59%, while Small cap index up by 2.57%.

The gaining sectoral indices on the BSE were Realty up by 3.94%, Capital Goods up by 2.38%, Consumer Durables up by 2.31%, Auto up by 2.08%, Bankex up by 1.83%

The top gainers on the Sensex were Hero MotoCorp up by 4.24%, HDFC up by 3.24%, Bajaj Auto up by 3.19%, Larsen & Toubro up by 2.79% and BHEL up by 2.76%. On the flip side, Hindustan Unilever down by 0.85% and Infosys down by 0.37% 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 8105.85, up by 130.35 points or 1.63% after trading in a range of 7939.70 and 8109.75. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 4.71% and BPCL up by 3.69% and DLF up by 3.19% and HDFC up by 3.09% and Larsen & Toubro up by 2.99%. On the flip side, United Spirits down by 1.19%, Hindustan Unilever down by 0.88%, Infosys down by 0.44% and Sesa Sterlite down by 0.02% were the top losers.

Asian markets were trading mixed; Straits Times was up by 1.89 points or 0.06% to 3,298.37; Shanghai Composite increased 8.03 points or 0.35% to 2,315.93; Jakarta Composite increased 21.42 points or 0.41% to 5,209.60; Taiwan Weighted increased 41.86 points or 0.46% to 9,237.03; Nikkei 225 increased 178.9 points or 1.13% to 16,067.57. On the flip side, Hang Seng down by 207.69 points or 0.85% to 24,168.72; KOSPI Index down by 14.87 points or 0.72% to 2,047.74 and FTSE Bursa Malaysia KLCI down by 1.32 points or 0.07% to 1,842.46.

European markets were trading mostly higher; with France’s CAC trading higher by 10.29 points or 0.23% to 4,441.70; Germany’s DAX edging higher by 47.96 points or 0.5% to 9,709.46, while UK’s FTSE 100 was trading lower by 2.48 points or 0.04% to 6,778.42.