Benchmarks continue to trade jubilantly in noon deals

Markets continue to trade jubilantly in afternoon deals as there is no sign of profit taking from any corner yet and buying was sustaining even at higher levels. Sentiments remained up-beat after China’s central bank today raised the value of yuan against the US dollar by 0.05%, putting a stop to the 3-day fall in the currency. Domestic sentiment was buoyed as the Wholesale Price Index (WPI) inflation contracted further in July 2015 to (-) 4.05 per cent from (-) 2.4 per cent in June. Some support also came with Finance minister Arun Jaitley’s statement that the Cabinet committee on political affairs chose not to prorogue Parliament, keeping the door open for both Houses to meet at short notice before the winter session begins in November, has encouraged the traders to take higher bets.

On the global front, European counters have made cautious start with CAC, DAX and FTSE, all were trading flat in early deals. Asian markets were trading mixed at this point of time 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, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. On the sectoral front, realty, healthcare and banking witnessed the maximum gain in trade, while there were no losers on the BSE sectoral space. The market breadth on the BSE was positive; there were 1596 shares on the gaining side against 908 shares on the losing side while 86 shares remain unchanged.

The BSE Sensex is currently trading at 27912.43, up by 362.90 points or 1.32% after trading in a range of 27643.20 and 27959.33. 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 1.76%, while Small cap index up by 1.28%.

The top gaining sectoral indices on the BSE were Realty up by 3.87%, Healthcare up by 1.69%, Bankex up by 1.66%, Auto up by 1.62% and INFRA up by 1.44%, while there were no losers on the index.

The top gainers on the Sensex were Vedanta up by 3.29%, Reliance Industries up by 3.00%, Sun Pharma up by 2.95%, Bajaj Auto up by 2.65% and HDFC up by 2.52%. On the flip side, Dr. Reddys Lab down by 0.82%, GAIL India down by 0.75%, Axis Bank down by 0.64% and Coal India down by 0.05% were the few losers.

Meanwhile, in order to bridge the gap of fiscal deficit, Reserve Bank of India (RBI) has decided to transfer a surplus of Rs 65,896 crore for the year ended June 30, 2015 to government which is about 25% more than Rs 52,679 crore the amount given last year. This move will help to provide more fiscal space to the government and also increase the planned expenditure especially given the fact that first quarter direct tax growth has not been very encouraging. The Reserve Bank follows the July-June accounting year.

RBI’s decision to transfer of surplus along with dividends from state run banks and public sector entities comprise a major chunk of non tax receipts. Centre has predicted a fiscal deficit of 3.9% of GDP for FY 16 as against 4% deficit attained in FY15. Meanwhile, indirect tax collection jumped 39.1% in July partly contributed by the hike in excise duty on oil last year and a withdrawal of sop on automobile and other companies from January 2015.

The higher fund transfer by RBI will help government in recapitalizing public sector banks. Further, the government has announced to infuse an additional Rs 11,500 crore in public sector banks for recapitalization this fiscal, over and above the Rs 7,940 crore earmarked in the union budget.

The CNX Nifty is currently trading at 8477.30, up by 121.45 points or 1.45% after trading in a range of 8381.20 and 8488.85. There were 46 stocks advancing against 3 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were PNB up by 3.43%, Yes Bank up by 3.37%, Reliance Industries up by 3.28%, Indusind Bank up by 3.26% and Vedanta up by 3.24%. On the flip side, Dr. Reddys Lab down by 0.82%, Axis Bank down by 0.73% and GAIL India down by 0.69% were the few losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 76.1 points or 0.37% to 20,519.45, FTSE Bursa Malaysia KLCI declined 29.84 points or 1.84% to 1,591.78, Jakarta Composite shed 14.29 points or 0.31% to 4,569.96, Taiwan Weighted slipped 6.1 points or 0.07% to 8,305.64 and Hang Seng was down by 5.66 points or 0.02% to 24,013.14.

On the flip side, Straits Times gained 17.17 points or 0.56% to 3,108.95 and Shanghai Composite was up by 23.83 points or 0.6% to 3,978.39.

European Markets were trading flat; Germany’s DAX gained 0.02% and France’s CAC surged 0.05%, while UK’s FTSE was down by 0.04%.