Benchmarks trade jubilantly in early deals; Nifty regains 8,400 mark

Buoyed by firm global cues, Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals on Monday with key gauges recapturing their crucial 8,400 (Nifty) and 27650 (Sensex) levels. The US markets ended higher in last session led by some late-day buying interest. Traders reacted positively to the remarks by Federal Reserve Chair Janet Yellen that an interest rate hike may well be warranted later this year but stressed that any increase in interest rates would be gradual. The Asian markets were rallying with some indices trading higher by over a percent. Japanese market too was up by about half a percent despite the nation’s industrial production falling more than forecast in February. Output declined 3.4 percent from January, weakest since June last year.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Buying in banking counter too supported the sentiments after Reserve Bank of India (RBI) proposed to lower the ceiling on how much a bank can lend to a single corporate group, in a move to curb risks in the banking sector at a time when bad loans are on the rise.

On the sectoral front, capital goods, infrastructure and fast moving consumer goods witnessed the maximum gain in trade, while there were no losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1509 shares on the gaining side against 367 shares on the losing side while 52 shares remain unchanged.

The BSE Sensex is currently trading at 27697.43, up by 238.79 points or 0.87% after trading in a range of 27624.76 and 27719.28. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.41%, while Small cap index up by 2.26%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.69%, Infrastructure up by 1.38%, FMCG up by 1.30%, Power up by 1.14% and PSU up by 0.98%, while there were no losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 2.43%, HDFC up by 2.14%, ITC up by 1.83%, Cipla up by 1.77% and Mahindra & Mahindra up by 1.64%. On the flip side, Hindalco down by 1.31%, GAIL India down by 0.71%, Reliance Industries down by 0.62%, Bajaj Auto down by 0.49% and Dr. Reddys Lab down by 0.37% were the top losers.

Meanwhile, in an encouraging development for the economy, rating agency Moody's termed high bids received in spectrum auction as 'credit positive' for India, citing that the proceeds from the sale of airwaves will help the government meet its fiscal deficit target. The rating agency highlighted that this development will be credit positive for the sovereign in the near term, particularly since tax revenue receipts have been lacklustre this fiscal year.

Moody’s however expects government to implement a variety of measures to meet its fiscal deficit targets this year and next. In the Union Budget 2015, which was Modi’s government first fully fledged budget, fiscal deficit target for 2014-2015 was pegged at 4.1% of GDP and 3.9% for the next fiscal.

In its report, Moody’s pointed that this development would have indirect sovereign impact, through the banking system from the increase in firms' leverage related to the bids. It cautioned that several other factors will play a role in determining the impact of such leverage on the system, including the sector's growth and profitability and hence, termed this as an indirect issue from the sovereign perspective.

After 19 days of fierce bidding, the government raked in a record bounty of nearly Rs 1.10 lakh crore in the country's biggest auction of telecom spectrum that ended on Wednesday. This is highest ever in history of India. The spectrum auction conducted in 2010 brought about Rs 106,000 crore which included Rs 30,000 crore payments. Lastly, depending on the band, carriers will have to pay as much as 33 percent of their final bid within 10 days of the auction's conclusion and the rest in 10 annual installments starting in 2017.

The CNX Nifty is currently trading at 8407.20, up by 65.80 points or 0.79% after trading in a range of 8380.75 and 8412.95. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.85%, Asian Paints up by 2.75%, Bharti Airtel up by 2.48%, Idea Cellular up by 2.12% and HDFC up by 1.98%. On the flip side, Tech Mahindra down by 2.35%, Hindalco down by 1.57%, Cairn India down by 0.95%, GAIL India down by 0.67% and Bajaj Auto down by 0.58% were the top losers.

All the Asian equity markets were trading in green; Straits Times rose 2.38 points or 0.07% to 3,452.48, KOSPI Index gained 7.64 points or 0.38% to 2,027.44, FTSE Bursa Malaysia KLCI added 9.51 points or 0.52% to 1,822.88, Taiwan Weighted advanced 35.65 points or 0.38% to 9,539.37, Jakarta Composite surged 47.51 points or 0.88% to 5,444.36, Shanghai Composite soared 59.83 points or 1.62% to 3,750.93, Nikkei 225 jumped 124.08 points or 0.64% to 19,409.71 and Hang Seng was up by 367.17 points or 1.5% to 24,853.37.