Markets continue to trade with fervor; Nifty comfortably trades past crucial 8,000 level

After bouncing off from day’s low, local equity markets continued to show momentum, with both Sensex and Nifty gaining around two tenths of a percent, trading above psychologically crucial 26,800 and 8,000 levels respectively. Meanwhile, broader indices too showing traction were up in the range of 0.05-%0.45%. Sentiments got a lift from World Bank’s twice yearly report on the Indian economy and its prospects, which pegged India’s economic growth rate at 5.6% in 2014-15, followed by further acceleration to 6.4% and 7.0% in the next two financial years respectively. However, prevailing caution ahead of F&O expiry and outcome of Fed’s two day meeting, which kept Asian peers on tenterhooks, limited further gains of local equities. On the global front, street widely expects Federal Reserve to end its bond-buying program in its two days meeting. The central bank has gradually reduced its purchases since the start of this year. On Monday, the Fed conducted the last round of buying on Treasury bonds totaling $931 million out of $2.717 billion worth of bonds offered from primary dealer banks.

Closer home, most of the sectoral indices on BSE were trading into positive territory, nevertheless stocks from Banking, Consumer Durables and Capital Goods counters were the outperformers of the session. Market-participants continued to lap up banking stocks on rising hopes of an earlier-than-expected cut in interest rates by RBI after Finance Minister Arun Jaitley favours interest rate cut. Meanwhile, state-run banks edge higher after reports suggested of government plans to draw up a new process to appoint top officials at lenders. On the flip side, stocks from Infrastructure, Oil & Gas and Power counters were among the weak links of trade. The overall market breadth on BSE was slightly more in the favour of advances which were outpacing declines in the ratio of 1254:1251; while 117 shares remained unchanged.

The BSE Sensex is currently trading at 26803.16, up by 50.26 points or 0.19% after trading in a range of 26764.15 and 26865.11. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.05%, while Small cap index up by 0.44%.

The gaining sectoral indices on the BSE were Bankex up by 0.49%, Consumer Durables up by 0.41%, Capital Goods up by 0.28%, PSU up by 0.25% and IT up by 0.14% while, INFRA down by 0.33%, Oil & Gas down by 0.27%, Metal down by 0.26%, Power down by 0.20% and FMCG down by 0.14% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.09%, SBI up by 1.74%, Sun Pharma Inds. up by 1.65%, ICICI Bank up by 1.61% and Tata Power up by 1.58%. On the flip side, Hero MotoCorp down by 2.45%, Bharti Airtel down by 2.11%, Hindustan Unilever down by 1.65%, BHEL down by 1.57% and Bajaj Auto down by 1.32% were the top losers.

Meanwhile, after the high profile arrest in August, the government scrapped the selection of six public sector banks’ chairman and managing directors (CMDs) during UPA regime following a high-level panel detected irregularities in the process followed for selection. Earlier, the probe into the selection process for banks like Bank of Baroda and Canara Bank followed arrest and termination of Syndicate Bank CMD S K Jain for alleged graft. Jain was arrested in August by the Central Bureau of Investigation (CBI) on charges of taking bribes to sanction a loan to Bhushan Steel, as also of enhancing the credit limits of some other companies in violation of procedures. However, with the latest development, Finance Secretary decided that all future vacancies of chairman and managing directors (CMDs) as well as executive directors of PSU banks will now be filled through a new selection process.

Earlier, a panel headed by RBI Governor and including Financial Services Secretary, during the previous UPA regime had shortlisted Chairman and Managing Directors for Bank of Baroda, Canara Bank, Indian Overseas Bank (IOB), Oriental Bank of Commerce (OBC), United Bank and Vijaya Bank. The selection made by RBI panel was sent to the Finance Ministry for ratification by the Appointments Committee of the Cabinet (ACC).

However, Modi led government scrapped the entire selection process, filled up these vacancies as well as two others, including Syndicate Bank, through fresh selection process involving RBI Governor or his nominee, post the report of new Committee, which was set up by following the arrest of Jain and comprising of Expenditure Secretary, RBI Governor and Secretary School Education to examine the selections to six PSBs, submitted its reports detecting irregularities in the process.

The CNX Nifty is currently trading at 8010.35, up by 18.65 points or 0.23% after trading in a range of 7995.05 and 8020.80. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.16%, Ultratech Cement up by 2.03%, BPCL up by 2.02%, GAIL India up by 1.88% and Sun Pharma up by 1.81%. On the flip side, Bharti Airtel down by 2.59%, Hero MotoCorp down by 2.14%, BHEL down by 1.66%, Bajaj Auto down by 1.51% and Hindustan Unilever down by 1.46% were the top losers.

Asian markets were trading mostly lower; with Nikkei 225 trading lower by 58.81 points or 0.38% to 15,329.91; Jakarta Composite trading lower by 23.43 points or 0.47% to 5,000.87; Straits Times trading lower by 11.93 points or 0.37% to 3,214.18; KOSPI Index trading lower by 6.29 points or 0.33% to 1,925.68; FTSE Bursa Malaysia KLCI trading lower by 1.66 points or 0.09% to 1,821.49. On the flip side, Shanghai Composite was trading higher by 47.43 points or 2.07% to 2,337.87; Taiwan Weighted trading higher by 145.77 points or 1.69% to 8,773.55 and Hang Seng trading higher by 316.4 points or 1.37% to 23,459.63.