Benchmarks extend rally in noon deals; Nifty regains 7,900 mark

Buoyed by firm global cues, Indian equity benchmarks have extended their rally and are trading jubilantly with a gain of around a percent in noon deals, with frontline gauges recapturing their crucial 25,950 (Sensex) and 7,900 (Nifty) levels. European counters have made a firm start with CAC, DAX and FTSE and were trading with a gain of around a percent in early deals. Most of the Asian markets were trading in green at this point of time ahead of an announcement from the U.S. Federal Reserve on whether it would raise rates for the first time in almost a decade. A two-day meeting of the Federal Reserve, slated to start on Wednesday, could lead to the first interest-rate increase in almost a decade.

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. Investors overlooked 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. Meanwhile, none of the sectoral indices, barring capital goods and consumer durables, were trading in the red. While banking and healthcare witnessed the maximum gain in trade, metal, software, technology, auto, realty and public sector undertaking too were trading significantly. The market breadth on the BSE was positive; there were 1,240 shares on the gaining side against 1,042 shares on the losing side while 125 shares remain unchanged.

The BSE Sensex is currently trading at 25969.20, up by 263.27 points or 1.02% after trading in a range of 25816.50 and 25969.20. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.32%, while Small cap index up by 0.01%.

The top gaining sectoral indices on the BSE were Bankex up by 1.23%, Healthcare up by 1.03%, Metal up by 0.78%, TECK up by 0.74% and IT up by 0.65%, while Consumer Durables down by 0.90% and Capital Goods down by 0.37% were the only losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.44%, Axis Bank up by 2.37%, Bharti Airtel up by 2.35%, Sun Pharma up by 2.11% and Bajaj Auto up by 2.07%. On the flip side, BHEL down by 0.76%, Larsen & Toubro down by 0.67%, Hindustan Unilever down by 0.44% and Dr. Reddys Lab down by 0.18% were the top losers.

Meanwhile, market regulator, the Securities and Exchange Board of India (SEBI) has called for a meeting with all the seven credit rating agencies in the wake of two recent downgrades in Jindal Steel & Power and Amtek Auto, which have caused turmoil in a few mutual funds. Sebi officials will be discussing with top managers from ratings agencies about market conditions and how the credit profile changes can impact the corporate bond market and the mutual fund industry. Sebi is also looking at the ratings processes of agencies, as any change in ratings usually has an impact on the market price and yield of the bond.

Late August, while CARE Ratings suspended its ratings on Amtek Auto and Brickworks downgraded the company, ICRA, on September 9, downgraded Jindal Steel & Power. Since some of the mutual fund schemes had exposure to bonds issued by these two companies and they face some losses. Sebi has said that it is working to protect the interest of investors in those mutual funds and has also asked fund houses about their exposure in these papers.

Sebi has also asked mutual fund houses to report the downgrades in the bonds in which they invest to their trustees on a real-time basis and then to the regulator on a monthly basis and about their exposure to corporate bonds. Most fund houses investing in India hold corporate debt until maturity. The regulator has asked funds for details that include the rationale for the purchase, and assessments of a credit downgrade risk.

The CNX Nifty is currently trading at 7901.95, up by 72.85 points or 0.93% after trading in a range of 7853.30 and 7905.85. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.83%, Axis Bank up by 2.66%, Hero MotoCorp up by 2.64%, Vedanta up by 2.64% and Ambuja Cement up by 2.30%. On the flip side, BHEL down by 0.90%, Cairn India down by 0.79%, Larsen & Toubro down by 0.46%, NMDC down by 0.34% and BPCL down by 0.31% were the top losers.

Asian markets were trading mostly in green; Straits Times gained 26.84 points or 0.94% to 2,868.78, KOSPI Index surged 37.89 points or 1.96% to 1,975.45, Taiwan Weighted increased 73.3 points or 0.89% to 8,333.29, Shanghai Composite soared 75.82 points or 2.52% to 3,081.00, Nikkei 225 added 145.12 points or 0.81% to 18,171.60 and Hang Seng was up by 478.19 points or 2.23% to 21,933.42.

On the flip side, Jakarta Composite was down by 7.16 points or 0.16% to 4,340.00.

European Markets were trading in green; Germany’s DAX gained 1.16%, UK’s FTSE surged 0.74% and France’s CAC was up by 1.12%.