Benchmarks make gap up opening; Nifty reclaims 7800 level

With a gap-up opening Indian equity markets have enlarged their previous session’s rally and are now trading with the gains of around one and half a percent that helped both Sensex and Nifty to reclaim crucial 25,650 and 7,800 levels respectively, on account of good global cues with hopes that China will announce more stimulus measures to support the economy after weak trade data. The session was proving comparatively good for broader indices, which were trading with gains in the range of 1.70-1.80%.  The sentiment got a boost after Chief Economic Advisor Arvind Subramanian said that Indian economy will grow at the highest rate and also remain an attractive investment destination.  The Prime Minister’s meeting with Indian industry, where he asked them to take risk and invest more as his government promised a broad range of steps including stepping up of investment in infrastructure and improving ease of doing business to attract global investment, too provided some support. Further, Rupee opened higher against the dollar and was trading at 66.34, up 21 paise at the Interbank Foreign Exchange on sustained selling of the US currency by banks and exporters that too kept supporting the markets.

In scrip specific development, Infosys was trading higher after the U.S. Labour Department cleared IT major of any wrongdoing and closed its investigation. The US had initiated investigation against Infosys and its larger rival Tata Consultancy Services (TCS) for possible violations of H-1B visa rules in June.

On the global front, US markets ended higher as hopes for more stimulus measures from the Chinese government increased after data showed that China's imports shrank far more than expected in August. The Asian markets were trading in green tracking the positive lead overnight from Wall Street and European markets.

Closer home, all the sectoral indince on BSE were trading in fine fettle led by Realty, Consumer Durables and Auto. The market breadth on BSE was positive in the ratio of 1444: 245 while 37 scrips remained unchanged. 

The BSE Sensex is currently trading at 25691.42, up by 373.55 points or 1.48% after trading in a range of 25658.89 and 25753.93. 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 1.78%, while Small cap index gained 1.73%.

The top gaining sectoral indices on the BSE were Realty up by 2.69%, Consumer Durables up by 2.11%, Auto up by 1.86%, Bankex up by 1.80% and IT up by 1.74%, while there were no losers.

The top gainers on the Sensex were Vedanta up by 3.96%, Hindalco up by 2.75%, Infosys up by 2.72%, HDFC up by 2.53% and Maruti Suzuki up by 2.15%. On the flip side, GAIL India down by 0.69% was the only losers.

Meanwhile, Prime Minister Narendra Modi after a brainstorming session with India Inc on how India can manage global economic turbulence, including opportunities for Asia's third-largest economy in China's market and growth woes, has asked the Indian industry to take risk and invest more as his government promised a broad range of steps including stepping up of investment in infrastructure and improving ease of doing business to attract global investment.

PM referred to the global economic situation and urged the captains of industry to take risks saying that 'Since you regard this as a great opportunity for India, it is for India's private sector also now to increase their own investments. He also said that 'Conventionally, compared to others, the private sector has greater risk taking ability because their entrepreneurship emanates out of risk taking.”

Industry leaders on their part cited high interest rates as a deterrent to fresh investments. Industry body Assocham told the PM that policymakers needed to act fast and called for a deep cut in interest rates and new duties to stop dumping of Chinese products, such as steel. CII too said that though the government has done a lot to improve the ease of doing business, a lot more needs to be done. The prime minister and FM virtually advised secretaries and officials to work towards improvements in the areas of concern flagged by each industrialist.

The meeting was held against the backdrop of falling markets and a creeping mood of pessimism among businesses and was attended by industry honchos like Reliance Industries' Chairman and Managing Director Mukesh Ambani, Tata group chief Cyrus Mistry, Aditya Birla Group head Kumar Mangalam Birla, Wipro boss Azim Premji. From government side apart from the PM and FM, various other ministers too attended the meeting along with eight economists and four top financiers including SBI chief Arundhati Bhattacharya, ICICI Bank's Chanda Kochhar, IDFC's Rajiv Lall and CEO of the recently launched Bandhan Bank Chandra Shekhar Ghosh.

The CNX Nifty is currently trading at 7811.75, up by 123.50 points or 1.61% after trading in a range of 7793.85 and 7821.90. There were 49 stocks advancing against 1 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 4.15%, Vedanta up by 4.01%, Yes Bank up by 3.20%, Hindalco up by 3.03% and Infosys up by 2.95%. On the flip side, GAIL India down by 0.59% was the only losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 13.23 points or 0.83% to 1,600.35, Straits Times increased 15.74 points or 0.55% to 2,901.06, Jakarta Composite increased 23.55 points or 0.55% to 4,342.15, KOSPI Index increased 44.52 points or 2.37% to 1,923.20, Shanghai Composite increased 53.66 points or 1.69% to 3,224.12, Taiwan Weighted increased 256.39 points or 3.2% to 8,257.89, Hang Seng increased 629.01 points or 2.96% to 21,888.05 and Nikkei 225 increased 966.63 points or 5.55% to 18,393.71.