Benchmarks trade higher in early deals on Friday

Extending their previous session's gains, Indian equity benchmarks have made a positive start and are trading slightly in the green in early deals on Friday tailing positive global cues. Some support also came in with Finance Secretary Arvind Mayaram’s statement that India is following economic growth inducing policies and is confident that the GDP will rebound to over 7 percent in 2-3 years. Appreciation in Indian rupee too aided the sentiments. The rupee was trading stronger at Rs 60.76 compared to its previous close of Rs 60.84. However, gains remained capped on reports that foreign funds sold shares worth Rs 9.5 crore on September 18, as per provisional stock exchange data.

On the global front, the US markets extended their gains in last session with Dow and the S&P 500 surging to new record closing highs on easing concerns about the outlook for interest rates following yesterday’s Fed statement. The Asian markets too were trading mostly in the green at this point of time on signs of US economic strengthening. The Japanese market has once again taken the lead and was up by over a percent in early deals as the yen plunged.

Back home, on the sectoral front, software, technology and power witnessed the maximum gains in trade, while fast moving consumer goods, consumer durables and capital goods remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1328 shares on the gaining side against 747 shares on the losing side while 66 shares remain unchanged.

The BSE Sensex opened at 27139.39; around 27 points higher as compared to its previous closing of 27112.21, and has touched a high and a low of 27189.73 and 27070.76 respectively. The BSE Sensex is currently trading at 27143.32, up by 31.11 points or 0.11%. There were 14 stocks advancing against 16 stocks declining on the index.

The overall market breadth remained in the favour of advances with 62.03% stocks advancing against 34.84% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.75%, while Small cap index up by 0.67%.

The gaining sectoral indices on the BSE were IT up by 1.29%, TECK up by 1.08%, Power up by 0.60%, PSU up by 0.21% and Infrastructure up by 0.19% while, FMCG down by 0.36%, Consumer Durables down by 0.23%, Capital Goods down by 0.16%, Oil & Gas down by 0.16%, Bankex down by 0.14% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.95%, Hero MotoCorp up by 1.83%, Hindalco up by 1.65%, ONGC up by 1.60% and Dr. Reddys Lab up by 1.60%. On the flip side, Infosys down by 1.61%, Hindustan Unilever down by 0.45% and Mahindra & Mahindra down by 0.18% were the few 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 opened at 8,129.40; around 15 points higher as compared to its previous closing of 8,114.75, and has touched a high and a low of 8,145.80 and 8,107.80 respectively.

The CNX Nifty is currently trading at 8130.20, up by 15.45 points or 0.19%. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.35%, HCL Tech up by 1.99%, Grasim Industries up by 1.98%, Power Grid Corporation up by 1.68% and Cipla up by 1.56%. On the flip side, Hindustan Unilever down by 1.03%, Jindal Steel & Power down by 0.91%, PNB down by 0.77%, Dr. Reddys Lab down by 0.74% and Mahindra & Mahindra down by 0.73% were the top losers.

Asian markets were trading mostly in the green; Straits Times rose 10.78 points or 10.78% to 3,308.07, Nikkei 225 strengthen by 287.74 points or 1.79% to 16,355.31, Jakarta Composite spurted by 23.79 points or 0.46% to 5,231.93, FTSE Bursa Malaysia KLCI gained by 5.70 points or 0.31% to 1,851.02, Hang Seng jumped by 88.39 points or 0.37% to 24,257.11, KOSPI Index added by 9.89 points or 0.48% to 2,057.63 and Taiwan Weighted was up by 3.07 points or 0.03% to 9,240.10.

On the flip side Shanghai Composite was down by 2.36 points or 0.10% to 2,313.56.