Markets continue to trade with strength; Sensex just shy of crucial 27,000 mark

Local equity markets continued to trade from strength to strength on account of revival of risk appetite after U.S. Federal Reserve said it would take a 'patient' approach in deciding when to raise interest rates, quelling fears of sudden outflows from emerging markets’ assets. Markets also drew some solace after Russia's rouble stabilized after dramatic falls this week, reducing some of the fears of financial contagion to emerging markets. Additionally, bargain buying which took place after two to three straight sessions of consolidation also heaved the markets higher. Both, Sensex and Nifty, despite rallying over a percent, were trading shy of the crucial 27,000 and 8,150 levels respectively. Meanwhile, broader indices also outperforming larger counterparts were trading with gains of around 2%.

On the global front, Asian shares were trading jubilant mood after Fed signaled that the U.S. isn’t in a hurry to raise interest rates, thereby encouraging investors to take on more risk. A longer timeline for rate increases implies that stocks will continue to be more appealing to investors, including those in riskier emerging markets, compared with the low returns on U.S. bonds.

Closer home, with across the board buying activities, none of the sectoral indices on BSE were trading into negative territory, nevertheless stocks from Consumer Durables, Power and Infrastructure counters were the prominent gainers. Real estate companies such as Unitech, DLF were trading higher after reports suggested of cabinet deferring approval of real estate regulatory bill. Besides, tobacco stocks advanced after reports suggested of tobacco being added in the GST ambit, which will most likely keep tax rates lower for tobacco based product. The overall market breadth on BSE were trading in the favour of advances which thumped declines in the ratio of 1804:184; while 13 shares remained unchanged.

The BSE Sensex is currently trading at 26990.98, up by 280.85 points or 1.05% after trading in a range of 26900.57 and 27105.80. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 2.27%, while Small cap index up by 2.62%.

The gaining sectoral indices on the BSE were Consumer Durables up by 4.63%, INFRA up by 2.59%, Power up by 2.58%, PSU up by 2.07% and Capital Goods up by 2.06%, while there were no losers.  

The top gainers on the Sensex were GAIL India up by 4.66%, BHEL up by 4.40%, Hindalco up by 4.11%, Tata Power up by 3.24% and Cipla up by 2.95%. On the flip side, HDFC down by 0.50%, Hindustan Unilever down by 0.23%, Reliance Industries down by 0.09% and Wipro down by 0.05% were the top losers.

Meanwhile, with an aim to produce globally competitive products, India is planning to set up reverse special economic zones (SEZs) in Iran, mainly in the fertiliser and petrochemical sector. India is keen to explore the possibilities of setting up of reverse SEZs under which domestic firms mainly related to fertiliser and petrochemical sector will be encouraged to set up plants in other countries where raw material is in abundance and available at cheaper rates, while the final product will be imported back.

Minister of Chemicals and Fertilizers Ananth Kumar has asserted that a Joint Working Group between India and Iran in these areas with officials from both the countries will work out a roadmap for cooperation. Meanwhile, some state-run firms include RCF and GNFCL are already working on a proposal to set up a urea-ammonia plant.

The Ministry is of the view that Iran could be an ideal place to start reverse SEZ project since many refineries in India already import crude from Iran and have working business relationship with Iranian companies. Meanwhile, India is also likely to extend the reverse SEZs project to Myanmar and Mozambique as these countries have abundance of oil and gas resources, a key feedstock for petrochemicals and petroleum industry.

The CNX Nifty is currently trading at 8113.75, up by 83.95 points or 1.05% after trading in a range of 8084.90 and 8151.50. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 5.51%, GAIL India up by 4.74%, BHEL up by 4.45%, Hindalco up by 4.35% and PNB up by 3.82%. On the flip side, Grasim Industries down by 1.01%, HDFC down by 0.62%, Ultratech Cement down by 0.47%, BPCL down by 0.28% and Hindustan Unilever down by 0.19% were the top losers.

Asian markets were trading mostly higher; with Shanghai Composite trading higher by 1.44 points or 0.05% to 3,062.46; Straits Times advancing by 6.66 points or 0.21% to 3,233.89; FTSE Bursa Malaysia KLCI gaining by 20.65 points or 1.23% to 1,702.55; Taiwan Weighted rising by 50.27 points or 0.57% to 8,878.63; Jakarta Composite adding by 55.66 points or 1.11% to 5,091.31; Hang Seng edging higher by 194.98 points or 0.86% to 22,780.82;  Nikkei 225 rallying by 390.32 points or 2.32% to 17,210.05. On the flip side, KOSPI Index down by 2.66 points or 0.14% to 1,897.50 was the lone loser of the index.