Benchmarks magnify gains; Nifty above 8050 mark

Extending their early gains, Indian equity markets continued to trade with vigor on sustained buying by funds and retail investors after Union Finance Minister Arun Jaitley reiterated that India is ready to be one of the new drivers of growth of the world economy. Besides, a higher-than-expected interest rate cut by the Reserve Bank of India (RBI) last week continues to cheer the street. At present, Sensex and Nifty were trading above the crucial 26,600 and 8,050 levels respectively, with gains of over 1.40%.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over 1.20%. The risk appetite of investors globally improved across the risky asset classes after weak US jobs data prompted expectations the US Federal Reserve might postpone an interest rate hike. Sentiments got some support with reports that the government may extend export incentives such as cheap credit to even large players in sectors like pharmaceuticals, chemicals and electronics. Moreover, World Bank has maintained India's growth forecast for the year when other multilateral agencies and even the RBI think global situation will drag down the country's growth. However, the projections come with a warning that delays in the adoption and implementation of key reforms could affect investor sentiment.

On the global front, Asian markets edged higher on Monday after prospects of a near-term interest rate hike by the Federal Reserve ebbed in the wake of Friday's weaker-than-expected US employment data. Further, US stock indexes jumped over 1 percent on Friday as worries about the economy after the disappointing jobs report gave way to a robust rally in energy and materials stocks. Back home, rising for the fifth day in a row, Indian rupee appreciated by 27 paise to trade at 65.24 against the US dollar in  early trade on increased selling of American currency by exporters.

Back on street, all BSE sectoral indices were trading in the green. Among them, Capital Goods index gained the most by 2.48 per cent, followed by Banking 2.08 per cent, Auto 1.88 per cent and Power 1.59 per cent. In scrip specific development, shares of Tata Motors have rallied on reports that Peugeot in talks with the company to make cars in India. Moreover, Shares of Adani Ports and Special Economic Zone (SEZ) and Larsen & Toubro (L&T) were trading higher after these companies announced that they have inked a pact to oversee operations of Kattupalli Port in Tamil Nadu.The market breadth on BSE was positive, out of 2226 stocks traded, 1610 stocks advanced, while 540 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26643.62, up by 422.67 points or 1.61% after trading in a range of 26375.31 and 26647.41. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.31%, while Small cap index up by 1.24%.

There were no losers on the BSE Sectoral front, however, prominent gainers on the BSE Sectoral front were Capital Goods up by 2.48%, Bankex up by 2.08%, Auto up by 1.88%, Power up by 1.59% and Consumer Durables up by 1.36%

The top gainers on the Sensex were Tata Motors up by 6.68%, HDFC up by 3.37%, Larsen & Toubro up by 3.12%, ICICI Bank up by 3.09% and Hero MotoCorp up by 2.72%. On the flip side, Maruti Suzuki down by 1.66%, Dr. Reddys Lab down by 1.21%, Coal India down by 0.49%, Lupin down by 0.40% and ONGC down by 0.26% were the top losers.

Meanwhile, amid global demand slowdown, India’s export for the top five sectors which includes engineering, petroleum, gems and jewelery, textiles and pharmaceuticals declined by 25% to $13.33 billion in the month of August. According to the data released by the Commerce Ministry, during the month, engineering and petroleum exports contracted by 29 percent and 47.88 percent, respectively while textiles sector recorded a negative growth, gems and jewellery and pharmaceuticals on the other hand registered a marginal growth of 2.66% and 6% respectively.

In the last financial year, these five sectors have accounted for about 65% of the country's total merchandise exports where the exports of these segments stood at $202.15 billion. In August last year, exports of these sectors stood at $17.79 billion. The country's total exports were at $310.5 billion in 2014-15. Federation of Indian Export Organisations (FIEO) too has said that these are labour intensive sectors and government should announce steps to contain the dip in outbound shipments.

Indian exports extending its decline for the ninth month in a row, plunged 20.66 percent in August at $21.26 billion. The significant fall in country's exports was attributed to global slowdown and declining commodity prices worldwide. Concerned over continued decline in exports, the Commerce Ministry will hold a meeting of exporters on October 7 to discuss ways to contain the plunge in the outbound shipments. Issues related to higher cost of credit which is impacting country’s exports and ways to reduce the transactions cost for exporters are expected to be discussed in the meeting

The CNX Nifty is currently trading at 8063.95, up by 113.05 points or 1.42% after trading in a range of 8005.10 and 8069.20. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 6.47%, HDFC up by 3.62%, ICICI Bank up by 3.33%, Larsen & Toubro up by 3.05% and Hero MotoCorp up by 2.57%. On the flip side, Maruti Suzuki down by 1.68%, Dr. Reddys Lab down by 1.25%, Lupin down by 0.57%, Coal India down by 0.49% and BPCL down by 0.42% were the top losers.

Asian markets were trading in green, FTSE Bursa Malaysia KLCI was up by 0.76%, KOSPI Index up by 0.46%, Straits Times up by 1.62%, Taiwan Weighted up by 0.49%, Jakarta Composite up by 2.73%, Nikkei 225 up by 1.91% and Hang Seng was up by 1.84%.