Benchmarks make a good start; Nifty reclaims 8400 mark

Indian equity markets once again made a solid start on Friday and are trading in fine fettle with the gains of over half a percent, which helped both Sensex and Nifty to reclaim crucial 27,650 and 8,400 levels respectively, on sustained buying by funds and retail investors. Broader indices were also trading in line with larger counterparts, garnering gains in the range of 0.60-0.90%. Trade was getting support with government keeping its options open on convening a special session of Parliament for enacting the GST law on which Finance Minister Arun Jaitley declared that it was determined to stick to the rollout deadline of April 1, 2016. Meanwhile, a government-appointed panel to suggest ways to prune subsidies has favoured extending the cash transfer scheme to kerosene and food in three years for directly helping beneficiaries. The early weakness in rupee was unable to deter the sentiment of the markets. Rupee, extending its losing streak to eighth consecutive session, depreciated 15 paise to 65.25 against dollar. Some cautiousness is likely to prevail in the markets ahead of the WPI inflation data slated to be announced later in the day.

In scrip specific development, Glenmark Pharmaceuticals has surged 12% in early morning trade, on announcement of inclusion in the MSCI Emerging Markets Index from close of August 31, 2015.

On the global front, US markets ended mostly lower following a choppy session marked by narrow gains and losses, as readings on retail sales and jobless claims suggested the US economy is on healthy footing. Asian markets were trading mixed as crude oil futures remained under pressure, crashing to 6-1/2-year lows after data indicated a big increase in US stockpiles arising fears of a growing global glut.

Back home all the sectoral indices, barring FMCG, were trading in green led by Realty and Healthcare. The market breadth on BSE was positive in the ratio of 1007: 726 while 65 scrips remained unchanged.

The BSE Sensex is currently trading at 27694.81, up by 145.28 points or 0.53% after trading in a range of 27643.20 and 27711.56. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.87%, while Small cap index added 0.62%.

The top gaining sectoral indices on the BSE were Realty up by 1.88%, Healthcare up by 1.68 %, INFRA up by 0.95%, Auto up by 0.69% and TECK up by 0.66%, while FMCG down by 0.26% was the lone losing index on the BSE.

The top gainers on the Sensex were Vedanta up by 3.29%, Sun Pharma Inds. up by 1.92%, Cipla up by 1.85%, Bharti Airtel up by 1.55% and Lupin up by 1.25%. On the flip side, Axis Bank down by 1.64%, GAIL India down by 0.93%, Hindustan Unilever down by 0.81%, Dr. Reddys Lab down by 0.22% and ITC down by 0.14% were the top losers.

Meanwhile, a government-appointed panel headed by Bimal Jalan, to suggest ways to prune subsidies has favoured extending the cash transfer scheme to kerosene and food in three years for directly helping beneficiaries. Jalan has said that “We are trying to see what way we can use DBT (direct benefit transfer) and apply it to other entitlements and other things. I won’t name the products because what we will do will take some more time. The whole idea is to make it easy because it saves expenditure.”

Jalan in his meeting with Finance Minister Arun Jaitley, batted very strongly for the direct benefit transfer scheme. That one development, he says, will go a long way in helping the process is the setting up of payment banks. He said that 'We already have a DBT system and can look for utilisation of payments banks in rural areas by tying it up with DBT.' He added that whenever action is taken to set up payment bank, it will increase the outreach of our financial system to the rural areas and we can implement it.Subsidy rationalisation is high on economic agenda of the government and it has already introduced direct benefit transfer scheme to plug leaks in LPG subsidy and other welfare schemes to ensure the benefit reaches the poor directly.

The government had set up the Commission under the former RBI Governor in August last year to suggest steps to reduce subsidies on food, fertiliser and oil and narrow the fiscal deficit. Former finance secretary Sumit Bose and former RBI deputy governor Subir Gokarn are members of the Commission.  The Commission had submitted its interim report in January and will submit its comprehensive report to the government by the end of the year, as it is mandated to submit the final one before Budget 2016-17.

The CNX Nifty is currently trading at 8401.25, up by 45.40 points or 0.54% after trading in a range of 8381.20 and 8409.20. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 3.00%, Asian Paints up by 2.25%, Cipla up by 1.81%, Sun Pharma Inds. up by 1.81% and Idea Cellular up by 1.62%. On the flip side, NMDC down by 2.42%, Cairn India down by 1.98%, Axis Bank down by 1.60%, GAIL India down by 0.83% and Hindustan Unilever down by 0.74% were the top losers.

Asian markets were trading mostly mixed; KOSPI Index increased 7.99 points or 0.4% to 1,983.46, Hang Seng increased 9.47 points or 0.04% to 24,028.27, Straits Times increased 13.65 points or 0.44% to 3,105.43 and Shanghai Composite increased 33.02 points or 0.83% to 3,987.57

On the flip side, Nikkei 225 decreased 85.13 points or 0.41% to 20,510.42, FTSE Bursa Malaysia KLCI decreased 25.84 points or 1.59% to 1,595.78, Jakarta Composite decreased 14.05 points or 0.31% to 4,570.20 and Taiwan Weighted decreased 7.28 points or 0.09% to 8,304.46.