Markets make gap-up opening; Nifty reclaims 8300 mark

Indian equity make have made a gap-up opening, coming out of their two-day losing streak, and are now trading in fine fettle with gain of over half a percent. Sensex and Nifty have reclaimed crucial 27,500 and 8,300 levels respectively, on sustained buying by fund and retail investors amid firm global cues, after the European Central Bank (ECB) chief Draghi hinted at injecting more stimulus in the economy and to boost the economy further considering options that include a further reduction in the deposit rate. Further, sentiment on the street also improved with a Moody's Investors Service’s report stating that India will clock the highest growth rate of 7-7.5 per cent among G20 economies in 2015 and 2016. It has said that India is less exposed to global risks because of its more resilient economic growth and the impact of positive policy reforms momentum. Moreover, Rupee opened higher against the dollar on Friday and was trading at 64.78, up 34 paise at the Interbank Foreign Exchange that too supported the markets.

On the global front, the US markets ended higher, as stronger-than-expected earnings from several top companies, including McDonald's relieved investors' concerns about the profit outlook. The Asian markets were trading in green tracking the positive cues overnight from Wall Street and European markets.

In the scrip specific development, eClerx Services rallied 10% to its 52-week high on the NSE, after the company engaged in knowledge process outsourcing (KPO) business announced a bonus issue plan.

Closer home, all the sectoral indices on BSE, barring TECK, are trading in green led by Oil & Gas, Metal, PSU and Consumer Durables.  The market breadth on BSE was positive in the ratio of 1225: 426 while 55 scrips remained unchanged. 

The BSE Sensex is currently trading at 27522.78, up by 235.12 points or 0.86% after trading in a range of 27456.23 and 27555.06. 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 0.49%, while Small cap index gained 0.56%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.42%, Metal up by 1.13%, PSU up by 1.10%, Consumer Durables up by 1.07% and Bankex up by 1.01%, while TECK down by 0.19% was the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.29%, GAIL India up by 2.27%, NTPC up by 2.16%, ONGC up by 1.69% and Vedanta up by 1.52%. On the flip side, Wipro down by 1.36%, Bharti Airtel down by 0.44%, Infosys down by 0.26% and Dr. Reddys Lab down by 0.20% were the top losers.

Meanwhile, ahead of the formal launch of the Gold Monetisation Scheme (GMS) by Prime Minister Narendra Modi on November 5, Reserve Bank of India (RBI) has issued guidelines for the scheme that allow banks to fix their own interest rates on gold deposits. As per the guidelines, banks will be free to set interest rate on such deposit, and principal and interest of the deposit will be denominated in gold. The interest will be credited in the deposit accounts on the respective due dates and will be withdrawable periodically or at maturity as per the terms of the deposit.

The GMS will replace the existing Gold Deposit Scheme, 1999. However, the deposits outstanding under the Gold Deposit Scheme will be allowed to run till maturity unless the depositors prematurely withdraw them. Resident Indians can make deposits under the scheme and the minimum deposit at any one time shall be raw gold (bars, coins, jewellery excluding stones and other metals) equivalent to 30 grams of gold of 995 fineness. The deposit certificates will be issued by banks in equivalence of 995 fineness of gold and the principal and interest of the deposit under the scheme will be denominated in gold.

As per the guidelines, the designated banks may sell or lend the gold accepted under STBD to MMTC for minting India Gold Coins (IGC) and to jewellers, or sell it to other designated banks participating in GMS. The gold deposited under MLTGD will be auctioned by MMTC or any other agency authorised by the Central Government and the sale proceeds credited to the Central Government’s account with the Reserve Bank.

RBI has also guided that the short term bank deposits will attract applicable cash reserve ratio (CRR) and statutory liquidity ratio (SLR). However, it said, the stock of gold mobilised under the scheme by banks will count towards the general SLR requirement

The government announced the gold monetization scheme on 15 September to mobilize gold held by households and institutions and facilitate its use for productive purposes. The gold deposit scheme is aimed at mobilising a part of an estimated 20,000 tonnes of idle precious metal with households and institutions.

The CNX Nifty is currently trading at 8312.60, up by 60.90 points or 0.74% after trading in a range of 8305.40 and 8328.10. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 3.21%, Tata Steel up by 2.56%, GAIL India up by 2.24%, NTPC up by 2.04% and ONGC up by 1.78%. On the flip side, Idea Cellular down by 3.00%, Wipro down by 1.25%, Zee Entertainment down by 0.33%, Infosys down by 0.32% and Dr. Reddys Lab down by 0.30% were the top losers.

Asian markets were trading in green, Shanghai Composite increased 0.69 points or 0.02% to 3,369.43, FTSE Bursa Malaysia KLCI increased 4.9 points or 0.29% to 1,709.99, KOSPI Index increased 23.33 points or 1.15% to 2,046.33, Jakarta Composite increased 53.75 points or 1.17% to 4,638.32, Taiwan Weighted increased 74.64 points or 0.87% to 8,683.10, Hang Seng increased 306.32 points or 1.34% to 23,151.69 and Nikkei 225 increased 467.03 points or 2.53% to 18,902.90.