Benchmarks continue to trade jubilantly in noon deals

Indian equity benchmarks continue to trade jubilantly in noon deals as investors opted to buy beaten down but fundamentally strong stocks after three days of continuous drubbing. Sentiments remained up-beat since morning after International Monetary Fund (IMF) said that near-term growth prospects remain favourable in India but some macroeconomic imbalances still exist. Meanwhile, weak GDP data, cooling inflation along with mixed PMI data has created room for RBI rate cut which has further lifted the trading sentiments. Some support also came after the Nikkei/Markit Services Purchasing Managers' Index rose to 51.8 in August from July's 50.8.

Global cues too remained supportive with European counters making a strong start, CAC, DAX and FTSE all were trading with a gain of around a percent in early deals. Asian markets were trading mostly in green at this point of time as a two-day holiday in China gave investors respite from the market that's been at the centre of recent global volatility. 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, barring software, were trading in the red. The market breadth on BSE was positive; there were 1,603 shares on the gaining side against 757 shares on the losing side while 91 shares remain unchanged.

The BSE Sensex is currently trading at 25664.97, up by 211.41 points or 0.83% after trading in a range of 25555.77 and 25745.46. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.91%, while Small cap index up by 1.07%.

The top gaining sectoral indices on the BSE were Realty up by 4.06%, Metal up by 1.92%, Capital Goods up by 1.83%, Auto up by 1.55% and Power up by 1.42% while, IT down by 0.17% was the lone losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 3.71%, BHEL up by 3.53%, Tata Motors up by 3.52%, HDFC up by 2.90% and Vedanta up by 2.77%. On the flip side, Lupin down by 1.31%, Hindustan Unilever down by 0.74%, Sun Pharma down by 0.48%, Infosys down by 0.48% and Hero MotoCorp down by 0.44% were the top losers.

Meanwhile, apex industry body ASSOCHAM expressing its disappointment has said that the day long nationwide strike of trade unions impacted normal life in various parts of the country affecting the functioning of services like banking, power supply, oil and gas, transport, warehousing and other services causing seismic effect on the economy and also said such 'disruptive' actions can hit India's image as an attractive business destination. Assocham Secretary General D S Rawat said the financial impact of the disruption of essential services might lead to an estimated loss of over Rs 25,000 crore to the economy, taking into account the direct and indirect losses.

Rawat added that the strike is likely to hit industrial activity due to poor workers attendance. Besides, a big jolt would accrue to the export cargo thereby throwing crucial delivery schedule to haywire, with exports being under pressure, such things like strike would give a further setback. He said that the poor daily wage earners whose plight cannot be assessed in monetary terms would be the most affected.

Banking services were among the worst hit as 23 public sector banks, 12 private sector banks, 52 regional rural banks and over 13,000 cooperative banks joined the strike. However, staff of SBI, Indian Overseas Bank, ICICI Bank, HDFC Bank and Axis Bank chose to stay away from the strike. This could hamper banking transactions which are crucial for the conduct of business operations especially in areas which are serviced by branch banking operations.

Mr Rawat further said that immediate efforts must be made at the macro policy level to ensure that process of economic reforms, of which labour laws are an important component, is not adversely affected. Somehow, the trade unions and other stakeholders need to get a feeling of reassurance that labour reforms are meant to enhance employment opportunities and not take away the jobs and that overall objective is to strengthen jobs because it is only through enhanced consumer power that the industry can grow.

The CNX Nifty is currently trading at 7789.20, up by 72.20 points or 0.94% after trading in a range of 7754.05 and 7811.80. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Ambuja Cement up by 4.57%, Tata Motors up by 3.87%, Tata Steel up by 3.80%,  BHEL up by 3.51% and HDFC up by 3.02%. On the flip side, Idea Cellular down by 3.07%, BPCL down by 1.57%, Lupin down by 1.29%, Bosch down by 1.02% and Sun Pharma down by 0.57% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 0.31 points or 0.02% to 1,915.53, FTSE Bursa Malaysia KLCI rose 12.69 points or 0.8% to 1,602.88, Straits Times surged 20.87 points or 0.73% to 2,899.00, Jakarta Composite gained 21.45 points or 0.49% to 4,422.74, Taiwan Weighted added 60.66 points or 0.75% to 8,095.95 and Nikkei 225 was up by 86.99 points or 0.48% to 18,182.39.

European Markets were trading in green; Germany’s DAX gained 0.99%, France’s CAC surged 0.78% and UK’s FTSE was up by 1.02%.