Benchmarks continue to trade jubilantly; Nifty regains 7,900 mark

Indian equity benchmarks continue to trade jubilantly in noon deals with frontline gauges recapturing their crucial 7,900 (Nifty) and 26,000 (Sensex) levels. Sentiments remained up-beat 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. Short-covering by market participants owing to expiry of August month F&O contracts, too aided the sentiments.

Global cues too remained supportive with European counters making a strong start, CAC, DAX and FTSE all were trading with a gain of around two percent in early deals. All the Asian markets were trading in green at this point of time as a sharp rebound on Wall Street helped soothe investors' tattered nerves. 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. None of the sectoral indices were trading in the red, while oil and gas and realty witnessed the maximum gain in trade, healthcare, infrastructure, public sector undertaking, consumer durables, FMCG and metal too were trading significantly higher. The market breadth on BSE was positive; there were 1735 shares on the gaining side against 645 shares on the losing side while 74 shares remain unchanged.

The BSE Sensex is currently trading at 26056.27, up by 341.61 points or 1.33% after trading in a range of 25943.75 and 26170.39. 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 1.86%, while Small cap index surged by 2.02%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.56%, Realty up by 2.47%, Healthcare up by 2.09%, INFRA up by 2.05%, PSU up by 1.60%, while there were no losers on the index.

The top gainers on the Sensex were HDFC up by 6.31%, Vedanta up by 5.61%, Cipla up by 3.37%, Lupin up by 2.69% and ONGC up by 2.42%. On the flip side, BHEL down by 4.04%, Bajaj Auto down by 1.88%, Hindalco down by 0.87%, TCS down by 0.34% and HDFC Bank down by 0.29% were the top losers.

Meanwhile, domestic ratings agency India Ratings in its report has said 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. The estimation of the rating agency showed an additional fiscal space of Rs 37,160 crore or 27 bps of additional GDP for the government in FY16 on account of both lower oil subsidy and additional revenue generated under some budget heads. 

Further, the report attributed the surplus of the higher indirect tax collections rose about 39% till July and a massive decline in crude prices. Falling of the crude oil prices has lead to total savings of Rs 18,750 crore in oil subsidies alone. Similarly, till date the government has been failing to meet its direct tax mop up. The net direct tax collections grew a modest 6.44% against a target of 18% in the June quarter, raising doubts over the ambitious Rs 6.7-trillion target set for the current fiscal year.  Further, the report added that “If a part of the surplus, say Rs 10,000 crore is allocated for the recapitalization of public sector banks, then the multiplier effect of the credit will significantly support growth and strengthen bank balance sheet”.

However, the report warned of some slippages as well with the most of it coming from disinvestment front. Against the target of Rs 69,500 crore so far it could collect only around Rs 13,000 crore. While considering the market condition said that the target is more likely to be missed than met.

The CNX Nifty is currently trading at 7900.45, up by 108.60 points or 1.39% after trading in a range of 7862.30 and 7930.80. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 7.71%, HDFC up by 6.26%, Vedanta up by 5.84%, Ambuja Cement up by 3.96% and Kotak Mahindra Bank up by 3.60%. On the flip side, BHEL down by 4.02%, Bajaj Auto down by 1.85%, Zee Entertainment down by 0.88%, Yes Bank down by 0.76% and Ultratech Cement down by 0.59% were the top losers.

All the Asian markets were trading in green; KOSPI Index increased 13.91 points or 0.73% to 1,908.00, FTSE Bursa Malaysia KLCI gained 19.39 points or 1.23% to 1,599.76, Straits Times surged 62.07 points or 2.16% to 2,935.07, Taiwan Weighted rose 108.96 points or 1.41% to 7,824.55, Shanghai Composite zoomed 136.04 points or 4.65% to 3,063.33, Jakarta Composite soared 162.05 points or 3.82% to 4,399.79, Nikkei 225 strengthened 197.61 points or 1.08% to 18,574.44 and Hang Seng was up by 608.82 points or 2.89% to 21,689.21.

European Markets were trading in green; Germany’s DAX gained 2.53%, France’s CAC surged 2.16% and UK’s FTSE was up by 1.85%.