Markets make a gap-up start, Nifty reclaims 7750 level

Indian markets after getting pummeled down in last session on global concerns have made a gap-up start on Thursday, with benchmarks easily reclaiming the crucial psychological levels of 25600 (Sensex) and 7750 (Nifty). Traders tailing the rally overnight in US markets and good going in the Asian peers were maintaining their opening lead. Though, the US Fed's recent meeting providing some clarity on the prospects of a December rate hike, the minutes also stressed the pace of any rate increases will be slow. Back home traders were cheering the spate of policy reform announcements by the government. The Cabinet Committee on Economic Affairs (CCEA) has approved a 10 per cent stake sale in Coal India, an initial public offering at Cochin Shipyard and a five-year interest subsidy scheme to boost sagging exports. CCEA also empowered the National Highways Authority of India (NHAI) to revive 34 stalled projects. Traders were also getting some support with Chief Economic Adviser Arvind Subramanian’s statement that Inflation is completely under control and it is well within the target of the Reserve Bank. Subramanian also added that India needs to boost its growth with public spending and as well as private investment. The central bank has targeted an inflation level of 5.8 percent by January 2016.

Back on street, apart from the bluechips the broader markets too were equally participating in the rally, supported by the recovery in the rupee, which made a strong start after a sharp decline in last session. On the sectoral front, IT, tech, capital goods and auto have surged supporting the markets.

The BSE Sensex is currently trading at 25642.68, up by 160.16 points or 0.63% after trading in a range of 25603.10 and 25680.76. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices too were trading in green; the BSE Mid cap index was up by 0.52%, while Small cap index surged by 0.83%.

The top gaining sectoral indices on the BSE were IT up by 1.05%, TECK up by 0.95%, Capital Goods up by 0.85%, Auto up by 0.81%, Bankex up by 0.80%, while, Metal down by 0.00% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.88%, Maruti Suzuki up by 1.55%, Bajaj Auto up by 1.50%, ICICI Bank up by 1.46% and Wipro up by 1.15%. On the flip side, Dr. Reddys Lab down by 4.43%, Hindalco down by 1.04%, Sun Pharma Inds down by 0.86%, NTPC down by 0.64% and Coal India down by 0.58% were the top losers.

Meanwhile, in order to boost overseas shipments after continuous decline in exports, the government has announced 3 per cent interest subsidy scheme for exporters, which will have a financial implication of about Rs 2,700 crore.  In a meeting of Cabinet Committee on Economic Affairs headed by Prime Minister Narendra Modi, the government gave its approval for 'Interest Equalisation Scheme (earlier called Interest Subvention Scheme) on Pre and Post Shipment Rupee Export Credit with effect from 1st April, 2015 for five years'.

The scheme would be available to all exports of Micro, Small and Medium Enterprises (MSME) and 416 tariff lines. But it would not be available to merchant exporters. The rate of interest equalisation would be 3 percent and it will be evaluated after three years. Though, the financial implication of the proposed scheme is estimated to be in the range of Rs 2,500 crore to Rs 2,700 crore per year but the actual implication would depend on the level of exports and the claims filed by the exporters with the banks.

Under the scheme, exporters get loans at affordable rates, which help them ship more goods to foreign markets. The scheme would be implemented through funds available with the Department of Commerce under non-plan during 2015-16 and the restructured scheme would be funded from plan side from 2016-17 onwards. Funds worth Rs 1,625 crore in the non-plan head of account are available under Demand of Grants for 2015-2016 and would be made available to the Reserve Bank

The scheme will help the identified export sectors to be internationally competitive and achieve higher level of export performance. India's exports remained in the negative territory for the 11th month in a row in October, registering a dip of 17.53 per cent to $21.35 billion due to a demand slowdown.

The CNX Nifty is currently trading at 7776.10, up by 44.30 points or 0.57% after trading in a range of 7765.45 and 7792.55. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.87%, Cairn India up by 1.74%, HCL Tech. up by 1.64%, Bajaj Auto up by 1.64% and Maruti Suzuki up by 1.63%. On the flip side, Dr. Reddys Lab down by 4.13%, Hindalco down by 0.85%, Idea Cellular down by 0.85%, Sun Pharma Inds. down by 0.82% and Ambuja Cement down by 0.76% were the top losers.

Most of the Asian markets were trading in green barring Shanghai Composite which was tad lower by1.64 points or 0.05% to 3,566.83.

On the other hand, FTSE Bursa Malaysia KLCI was up by 1.92 points or 0.12% to 1,658.42, KOSPI Index added 18.16 points or 0.93% to 1,981.04, Jakarta Composite increased by 23.2 points or 0.52% to 4,521.11, Taiwan Weighted was up by 99.89 points or 1.2% to 8,440.36, Nikkei 225 increased by 189.18 points or 0.96% to 19,838.36 and Hang Seng surged by 254.28 points or 1.15% to 22,442.54.