Benchmarks in fine fettle in early deals; Sensex reclaims 26500 level

Extending their previous session’s rally, Indian equity markets have made a gap up opening and are now in fine fettle with the gains of above a percent, which helped both Sensex and Nifty reclaim crucial 26,500 and 8,050 levels respectively, on sustained buying by funds and retail investors amid positive global cues. The sentiment got a boost with statement of Finance Minister Arun Jaitley that India, with 8-9 percent growth rate, can replace China as the driver of world economy. Further, traders were also getting encouragement with the government’s announcement of the ambitious Smart City project, which is hoped to attract investment to boost the economy. Government has announced Rs 48,000 crore for development of 100 Smart cities out of which 98 names were declared and rest two will be nominated in due course. Shares of oil exploration companies such as Oil and Natural Gas Corporation, Oil India and Cairn India were trading higher following oil prices jump by more than 10% on Thursday, posting their biggest one-day rally in over six years.

In scrip specific development, Cipla was trading higher after the company decided to foray into nutritional business and launch full range of nutritional products over the next 12-18 months.

On the global front, US markets ended higher as strong US economic data and hints that a September interest-rate hike was unlikely fueled optimism that the worst of recent market turmoil was over. Asian markets were trading in green as a surprisingly strong upward revision of US economic growth eased concerns over China.

Back home, all the sectoral indices were trading in green led by INFRA, Realty and IT. The market breadth on BSE was positive in the ratio of 1490: 349 while 33 scrips remained unchanged.   

The BSE Sensex is currently trading at 26539.29, up by 308.10 points or 1.17% after trading in a range of 26479.10 and 26595.66. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.21%, while Small cap index surged by 1.52%.

The top gaining sectoral indices on the BSE were INFRA up by 2.04%, Realty up by 1.88%, IT up by 1.74%, TECK up by 1.69% and PSU up by 1.67%, while there were no losers. 

The top gainers on the Sensex were ONGC up by 6.00%, Vedanta up by 3.68%, Hindalco up by 3.66%, GAIL India up by 3.51% and Infosys up by 2.76%. On the flip side, Mahindra & Mahindra down by 0.34% was the top losers.

Meanwhile, RBI in its Annual Report for 2014-15  has said that uncertainty in the progress and distribution of monsoon, a key factor in performance of the farm sector, continues to be a risk for both growth as well as the inflation outlook. The report said that for the economy, the outlook for growth is improving gradually. Business confidence remains robust, and as the initiatives announced in the Budget to boost infra investments get rolled out, they should crowd in private investment and revive consumer sentiment, especially as inflation ebbs.

The apex bank further said that the government's resolve on fiscal consolidation should propel efforts to reach the target for the gross fiscal deficit for 2015-16 at 3.9 percent. On the revenue side, the report noted a massive uptick (38 per cent till July) in indirect tax collections and maintained that achieving the Budget target is contingent upon a recovery in manufacturing and services sectors.

The report also noted that the proposal to introduce a comprehensive bankruptcy code of global standards by FY16 and replacement of the exiting multiple prior permission procedure for investments by a pre-existing regulatory mechanism is expected to improve the business environment in the country.

RBI citing the areas that require significant changes has named legal and regulatory environment, labour market reforms, tax regimes and administrative environment. The report also cited gaps in distribution networks and deteriorating financials of power discoms which need to be addressed expeditiously for demand to keep pace with the ongoing easing of supply constraints. 

The CNX Nifty is currently trading at 8052.80, up by 103.85 points or 1.31% after trading in a range of 8023.70 and 8061.95. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 7.47%, ONGC up by 6.43%, Vedanta up by 4.11%, Hindalco up by 3.66% and GAIL India up by 3.54%. On the flip side, BPCL down by 1.65%, Ambuja Cement down by 0.57%, Mahindra & Mahindra down by 0.26% and Coal India down by 0.19% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 13.26 points or 0.83% to 1,614.96, KOSPI Index increased 28.2 points or 1.48% to 1,936.20, Straits Times increased 48.46 points or 1.65% to 2,993.89, Shanghai Composite increased 59.43 points or 1.93% to 3,143.02, Jakarta Composite increased 68.76 points or 1.55% to 4,499.40, Hang Seng increased 132.89 points or 0.61% to 21,971.43, Taiwan Weighted increased 183.02 points or 2.34% to 8,007.57 and Nikkei 225 increased 452.88 points or 2.44% to 19,027.32.