Benchmarks make gap up opening; Nifty reclaims 7850 level

Making a gap-up opening Indian equity markets have recovered most of their previous session losses and are now trading in fine fettle with the gains of around  a percent, on the back of fresh buying by funds and retail investors amid good global cues. At present, Sensex and Nifty were trading above the crucial 25,950 and 7850 levels respectively. Apart from blue chips, broader indices too participated in the rally with both mid cap and small cap indices trading up by 1.31% and 1.81% respectively. Sentiment on the street improved on report of India Ratings that the government can spend an additional Rs 37,200 crore more this fiscal year in infra investments or bank recapitalisation and still not miss the 3.9 percent fiscal deficit target, attributing the surplus to the higher indirect tax collections, which till July rose a healthy 39 percent and a massive decline in crude prices. Rupee opened higher against the dollar on Thursday and was trading at 65.86, up 29 paise at the Interbank Foreign Exchange that too kept supporting the markets. In scrip specific development, Hathway Cable & Datacom rallied 16% in early morning trade after the Reserve Bank of India (RBI) removed the company from its caution list, foreign investors can now buy more shares in the company.

On the global front, US markets ended higher with Dow and S&P 500 posting their largest gains in nearly four years. The jump attributed to fresh stimulus measures by China’s central bank as well as better-than-expected economic data. Asian markets were trading in green tracking a rebound on Wall Street. China’s benchmark Shanghai Composite was trading higher after the sharp slide in the previous five sessions.

Back home, all the sectoral indices were trading in green led by Realty Consumer Durables and INFRA. The market breadth on BSE was positive in the ratio of 1355: 310 while 38 scrips remained unchanged. 

The BSE Sensex is currently trading at 25966.22, up by 251.56 points or 0.98% after trading in a range of 25946.97 and 26170.39. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.33%, while Small cap index surged by 1.81%.

The top gaining sectoral indices on the BSE were Realty up by 2.05%, Consumer Durables up by 1.85%, INFRA up by 1.65%, Healthcare up by 1.60%, Oil & Gas up by 1.51%, while there were no losers. 

The top gainers on the Sensex were Vedanta up by 5.14%, HDFC up by 3.96%, Lupin up by 1.94%, Bharti Airtel up by 1.85% and SBI up by 1.83%. On the flip side, BHEL down by 2.96%, TCS down by 1.12%, Bajaj Auto down by 0.76%, Tata Motors down by 0.65% and Hero MotoCorp down by 0.15% were the top losers.

Meanwhile, giving another push to infrastructure development, the Centre has allowed road developers to completely exit BOT (build-operate-transfer) projects two years after completion and invest the funds in incomplete highway projects, power plants or retire debt. The decision is an extension to the government’s decision three months ago of easing exit norms for completed projects.

The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi cleared the amendment to the earlier clause which allowed for exit from a build operate transfer (BOT) projects two years after the completion of construction. The objective of the decision is to expedite award and implementation of highway projects by making additional funds available for investment.

CCEA has further stated that the facility will be provided to developers of National Highway Authority of India (NHAI) projects, any other highway development work or power sector programs to retire their debt to financial institutions. It pointed-out that most developers in the infrastructure sector are carrying highly leveraged balance sheets at their holding companies level, as they have been simultaneously supporting various infrastructure special purpose vehicles (SPVs) which are under severe stress.

Earlier, in May the government had allowed this facility to pre-2009 projects through a comprehensive exit policy framework that allowed developers to divest 100 per cent equity two years after completion of construction, now the government has said that the exit facility will be available for all BOT projects, “irrespective of the year of award”.

The CNX Nifty is currently trading at 7875.85, up by 84.00 points or 1.08% after trading in a range of 7862.30 and 7930.80. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 4.97%, Cairn India up by 4.66%, HDFC up by 4.05%, Tech Mahindra up by 2.21% and Bharti Airtel up by 2.11%. On the flip side, BHEL down by 2.89%, ACC down by 1.65%, NMDC down by 1.25%, Ultratech Cement down by 1.07% and TCS down by 1.02% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 14.32 points or 0.91% to 1,594.69, KOSPI Index increased 21.8 points or 1.15% to 1,915.89, Shanghai Composite increased 45.28 points or 1.55% to 2,972.57, Straits Times increased 54.67 points or 1.9% to 2,927.67, Taiwan Weighted increased 111.09 points or 1.44% to 7,826.68, Jakarta Composite increased 123.12 points or 2.91% to 4,360.85, Nikkei 225 increased 334.32 points or 1.82% to 18,711.15 and Hang Seng increased 533.72 points or 2.53% to 21,614.11.