Markets retain the gain in early noon session

It’s another good day for the markets, trading mostly steady and retaining the gains in early noon session, though benchmark S&P BSE Sensex after surging over 450 points has pared some of the gains, but the momentum remains firm tracking positive trend seen in other Asian markets. The market sentiment was also supported by the prospect that a September US rate hike was unlikely, while on domestic front hopes are strengthening that the Reserve Bank of India will cut interest rates at its policy meeting on Sept. 29, after the inflation slipped to a record low. Consumer price data for July showed retail inflation were at a record low of 3.78 per cent, giving the RBI more room to ease policy. Back on street, there is across the board buying and while broader markets are going neck-in-neck to the benchmarks, all the sectoral indices have strengthened further, extending their last session’s gains. There is good gain in oil companies after international Crude oil futures rose in Asian trading, adding to their biggest one-day rally in over six years. Cairn India and ONGC were both trading higher by around 6%, RIL was up by over a percent. The aviation stocks were trading higher despite reports that Prime Minister Narendra Modi has expressed concern over the frequent sharp hikes in airfares, especially during peak travel times.

The BSE Sensex is currently trading at 26640.77, up by 409.58 points or 1.56% after trading in a range of 26479.10 and 26687.33. There were 28 stocks advancing against just 2 stocks declining on the index.

The broader indices too were showing good upmove; the BSE Mid cap index was up by 1.47%, while Small cap index gained 1.39%.

The top gaining sectoral indices on the BSE were INFRA up by 2.62%, Power up by 2.21%, TECK up by 2.09%, PSU up by 2.00%, IT up by 1.95%

The top gainers on the Sensex were Vedanta up by 6.58%, ONGC up by 5.72%, Hindalco up by 4.71%, NTPC up by 4.28% and GAIL India up by 4.20%. On the flip side, Lupin down by 0.36% and Mahindra & Mahindra down by 0.14% were the top losers.

Meanwhile, putting back his concentration on the inflation, the Reserve Bank of India (RBI) Governor Raghuram Rajan has said that the central bank will continue its focus on taming inflation, speeding up resolution of distressed projects and ensuring enough capital for banks through balance sheet clean-up.

While listing out short-term macroeconomic priorities, the RBI governor stated that focus on bringing down inflation in line with the proposed glide path, work with the government and banks on speeding up the resolution of distressed projects and cleaning up bank balance sheets and ensure banks have capital to make provisions, support new lending, and thus pass on future possible rate cuts.

Rajan in the Governor's overview to the annual report noted that despite efforts from both the government and RBI to restore macroeconomic stability, three areas are still 'work in progress' from RBI's perspective. The first being, economic growth is still below levels the country is capable of. Second, inflation projections for January 2016 are still at the upper limits of RBI's inflation objective, and 'Third, the willingness of banks to cut base rates -- whereby they forgo income on existing borrowers to attract more new business -- is muted. Not only does weak corporate investment reduce the volume of new profitable loans, some bank capital positions weakened by NPAs may prevent them from lending freely.'

The CNX Nifty is currently trading at 8075.30, up by 126.35 points or 1.59% after trading in a range of 8023.70 and 8091.80. There were 46 stocks advancing against just 4 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 6.64%, Cairn India up by 6.18%, ONGC up by 5.84%, Zee Entertainment up by 5.62% and Hindalco up by 4.65%. On the flip side, BPCL down by 1.65%, Lupin down by 0.43%, Mahindra & Mahindra down by 0.07% and Grasim Industries down by 0.04% were the losers.

All the Asian markets were trading in green, FTSE Bursa Malaysia KLCI was up by 11.73 points or 0.73% to 1,613.43, KOSPI Index gained 29.67 points or 1.56% to 1,937.67, Jakarta Composite was higher by 36.81 points or 0.83% to 4,467.45, Straits Times added 40.05 points or 1.36% to 2,985.48, Hang Seng inched up by 81.15 points or 0.37% to 21,919.69, Shanghai Composite surged by 89.92 points or 2.92% to 3,173.51, Taiwan Weighted gained 194.63 points or 2.49% to 8,019.18 and Nikkei 225 was up by good 561.88 points or 3.03% to 19,136.32.