Markets get a gap-up opening on Fed optimism

The optimism that Federal Reserve will leave interest rates unchanged later this week has given a good start to the Indian markets too along with other regional indices, benchmarks with a gap up opening have recovered more than what they lost in last session and were continuing their upmove in the early deals with no sign of any profit taking. The jubilant traders have overlooked the weak economic data that the exports fell for the ninth consecutive month, dipping by 20.66 per cent in August to $21.26 billion on the back of a steep decline in engineering and petroleum shipments. Traders are of view that markets will get a relief rally even if the Federal Reserve hikes interest rates for the first time in nine years, as the markets are in oversold zone. Sensex was trading over 25850 level, while the 50-share Nifty index has reclaimed its crucial psychological level of 7,850, supported by gains in metal, realty, IT, banks, and Pharma stocks.

The BSE Sensex is currently trading at 25866.39, up by 160.46 points or 0.62% after trading in a range of 25842.46 and 25921.90. There were 26 stocks advancing against just 4 stocks declining on the index.

The broader indices too were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index up by 0.48%.

The top gaining sectoral indices on the BSE were IT up by 0.66%, Realty up by 0.64%, Auto up by 0.63%, Bankex up by 0.63%, TECK up by 0.61%, while Capital Goods down by 0.29%, Consumer Durables down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.74%, Sun Pharma Inds. up by 2.57%, Bajaj Auto up by 2.05%, Vedanta up by 1.70% and Lupin up by 1.53%. On the flip side, Larsen & Toubro down by 0.86%, NTPC down by 0.24%, Dr. Reddys Lab down by 0.16% and BHEL down by 0.09% were the top losers.

Meanwhile, despite stiff opposition from trade unions, labour ministry has set a firm deadline of six months in order to bring legislative and procedural changes in the old labour laws. The deadlines were communicated to the Prime Minister's Office at a recent meeting.  At least half a dozen Bills will go to the Cabinet for approval before winter session of Parliament. In case of delay prime Minister Office (PMO) is expected to do the follow up for the same.

As per the strategy laid out by the ministry, the first few proposals that are lined up for Cabinet's approval, starting from this month, include the Small Factories Bill, as well as amendments to the Minimum Wages Bill, Bonus Act, EPF & MP Act and the ESIC Act.

Besides, in order to follow  the path of consolidating 44 labour laws into four codes so as to simplify labour laws ,the ministry also plans to move the labour code on wages to the Cabinet next month, while  the labour code on industrial relations in November and social security in February. Further the Ministry also plans to push as many amendments as possible in the winter session and continue working on other sets of laws required to be amended so that the series of amendments are in the process.

For the first time the labour ministry has laid out a short term and a well defined path for itself for re-examine all the important labour laws. Moreover, this move is likely to cheer up corporate that are having an eye on the developments in the sector before they make investments. However, the push to the initiatives of the labour ministry from all corners of the government is likely to further disturb central trade Unions, which had already observed a one-day nationwide strike earlier opposing the unilateral and pro-corporate.

The CNX Nifty is currently trading at 7872.55, up by 43.45 points or 0.55% after trading in a range of 7863.75 and 7888.60. There were 39 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.69%, Sun Pharma Inds. up by 2.56%, Hero MotoCorp up by 2.31%,  Bajaj Auto up by 1.99% and Yes Bank up by 1.82%. On the flip side, Larsen & Toubro down by 0.93%, NTPC down by 0.51%, NMDC down by 0.34%, Grasim Industries down by 0.18% and ACC down by 0.06% were the top losers.

Asian markets were trading mostly in green, Shanghai Composite was up by 4.39 points or 0.15% to 3,009.57, FTSE Bursa Malaysia KLCI gained 7.52 points or 0.46% to 1,647.15, Straits Times was higher by 25.8 points or 0.91% to 2,867.74, KOSPI Index increased by 40.57 points or 2.09% to 1,978.13, Taiwan Weighted added 75.67 points or 0.92% to 8,335.66, Nikkei 225 surged by146.11 points or 0.81% to 18,172.59 and Hang Seng was higher by 217.38 points or 1.01% to 21,672.61

On the other hand, Jakarta Composite declined by 5.05 points or 0.12% to 4,342.11.