Benchmarks make gap up opening led by Metal and Realty

After making a positive opening, Indian equity markets continue to trade higher in morning deals, on sustained buying by funds and retail investors, which helped both Sensex and Nifty reclaim crucial 28,250 and 8,550 levels respectively, with gains of over half a percent. Broader indices were also trading in line with larger counterparts with gains in the range of 0.80-0.95%. The sentiment got a boost on reports that Foreign portfolio investors (FPIs) bought shares worth a net Rs 118.70 crore on August 4, 2015, as per provisional data released by the stock exchanges. Some support also came with report that the central bank retained its growth forecast of 7.6% for the financial year ending March 2016, citing a gradually improving outlook on the back of better real income from the decline in commodity prices and likelihood of better agricultural income if the monsoon continues to improve. The early weakness in rupee too was unable to deter the sentiments of the markets. The rupee weakened by 16 paise to 63.90 against the US dollar in early trade today at the Interbank Foreign Exchange. Some cautiousness is likely to prevail in the markets ahead of Services PMI data slated to be announced later in the day.

In scrip specific development, Nestle India surged 10% in early morning trade after the FSSAI approved lab finding its flagship product- Maggi in compliance with safety standards. The lab tested five samples sent by Goa FDA.

On the global front, the US markets closed lower as investors remained worried about a rise in interest rates. Asian markets were trading mostly in green; while Shanghai Composite was trading  lower.

Back home all the sectoral indices were trading in green. The market breadth on BSE was positive in the ratio of 1478: 469 while 57 scrips remained unchanged.

The BSE Sensex is currently trading at 28287.07, up by 215.14 points or 0.77% after trading in a range of 28135.68 and 28308.50. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.81%, while Small cap index gained 0.93%.

The top gaining sectoral indices on the BSE were Metal up by 1.74%, Realty up by 1.47%, TECK up by 1.11%, FMCG up by 0.90% and IT up by 0.87%, while there were no losers.

The top gainers on the Sensex were Tata Steel up by 3.78%, Bharti Airtel up by 2.78%, Vedanta up by 2.51%, Hindalco up by 1.97% and Lupin up by 1.66%. On the flip side, GAIL India down by 0.68%, Tata Motors down by 0.58%, Hindustan Unilever down by 0.14%, Mahindra & Mahindra down by 0.12% and Maruti Suzuki down by 0.07% were the top losers.

Meanwhile, Government showing its seriousness to protect the interests of sugarcane farmers has asked banks to expedite the release of soft loans to millers to pay cane arrears. Recently, Prime Minister Narendra Modi has reviewed the progress with regard to the Rs 6,000 crore incentive package approved by the union government in June 2015 and emphasized that the farmers' interest be kept foremost at all times and issues related to sugar sector be monitored regularly.

Millers have already submitted applications for about Rs 1,400 crore to different banks but loan has been sanctioned only in a couple of cases. To ensure that farmers are paid their dues expeditiously, in the present scheme, banks have to obtain the list of farmers and their bank accounts from millers with details of the extent of cane dues to be paid. The amount released by banks is directly paid into the account of the farmers on behalf of the sugar mills.

In June, cabinet committee on economic affairs (CCEA) had approved the scheme to provide Rs 6,000 crore soft loans to the sugar industry. It had decided to provide one year moratorium on this loan and to bear Rs 600 crore interest subvention. The CCEA had set the precondition that the soft loan will be provided to only those units which clear at least 50% (of dues) before June. Millers had to get these certificates from the cane commissioners in states.

In the past few months, besides the soft loan of Rs 6,000 crore, the government has raised the import duty on sugar from 15 to 40 percent, increased the export subsidy to Rs 4,000 per tonne and raised the level of ethanol blending in petrol to 10 percent. The government also allowed the export of additional 2,095 tons of raw sugar to the US under the tariff rate quota, under which imports there attract a relatively lower customs duty.

The CNX Nifty is currently trading at 8581.10, up by 64.20 points or 0.75% after trading in a range of 8545.85 and 8587.45. There were 42 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.59%, Bharti Airtel up by 3.00%, Vedanta up by 2.59%, Lupin up by 1.83% and BPCL up by 1.79%. On the flip side, Asian Paints down by 0.89%, GAIL India down by 0.58%, Tata Motors down by 0.50%, Bank Of Baroda down by 0.37% and Mahindra & Mahindra down by 0.30% were the top losers.

Asian markets were trading Mostly in red; KOSPI Index increased 1.57 points or 0.08% to 2,029.5, Straits Times increased 2.15 points or 0.07% to 3,193.19, FTSE Bursa Malaysia KLCI increased 5.27 points or 0.31% to 1,729.00, Jakarta Composite increased 18.6 points or 0.39% to 4,799.69, Taiwan Weighted increased 33.38 points or 0.39% to 8,544.24 Hang Seng increased 57.32 points or 0.23% to 24,463.44 and Nikkei 225 increased 164.81 points or 0.8% to 20,685.17.

On the flip side, Shanghai Composite decreased 47.89 points or 1.27% to 3,708.66.