Jubilation continues on Dalal Street in noon deals

Indian markets continuing their jubilation were trading higher by over a percent in afternoon deals, as investors opted to buy beaten down but fundamentally strong stocks owing to strong global cues. The benchmarks after making a gap-up opening were strengthening gradually with no sign of any profit taking till yet and Nifty and Sensex recapturing their crucial 7,800 and 25,700 levels respectively. Sentiments remained up-beat 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. Significant recovery in Indian rupee against dollar too aided sentiments. The rupee appreciated 18 paise in noon deals to trade at 66.10 against the dollar on increased selling of the US currency by exporters and banks. Global cues too remained supportive with Asian markets rallying at this point of time after the US Federal Reserve's meeting minutes sent strong signals of a rate increase in December, a vote of confidence in the health of the world's largest economy and a boon for the banking sector.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Shares of railway-related companies were trading jubilantly after the government approved Rs 8,349 crore investments on rail freight lines in three states. None of the sectoral indices were showing any sign of dithering. While software and auto witnessed the maximum gain in trade, consumer durables, technology, oil and gas, banking and capital goods too were trading significantly higher. The market breadth on the BSE was positive; there were 1,635 shares on the gaining side against 755 shares on the losing side while 184 shares remain unchanged.

The BSE Sensex is currently trading at 25771.00, up by 288.48 points or 1.13% after trading in a range of 25603.10 and 25789.16. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.84%, while Small cap index surged by 1.02%.

The top gaining sectoral indices on the BSE were IT up by 1.53%, Auto up by 1.45%, Consumer Durables up by 1.37%, TECK up by 1.33% and Oil & Gas up by 1.09%, while there were no losers on the index.

The top gainers on the Sensex were Hero MotoCorp up by 3.26%, Bajaj Auto up by 3.17%, Maruti Suzuki up by 2.33%, ICICI Bank up by 2.32% and Reliance Industries up by 2.32%. On the flip side, Dr. Reddys Lab down by 1.74%, Hindalco down by 1.04%, Coal India down by 0.58%, Sun Pharma down by 0.42% and NTPC down by 0.04% were the top losers.

Meanwhile, in order to bridge the yawning revenue gap and meet the disinvestment targets, the Union Cabinet has approved a 10 per cent stake sale in Coal India (CIL), one of the country's highest dividend paying companies. The government is facing ignominy of missing the disinvestment target for the sixth year, with so far raking up just 18 per cent of the Rs 69,500 crore disinvestment target in the current fiscal.

The stake sale in Coal India will be carried out through the offer for sale mechanism, the timing of which will be decided by the finance ministry.  At the current market price, a 10 per cent stake sale could fetch around Rs 21000 crore. This would still be lower than the Rs 22,600 crore that the Centre raised in the last financial year from a 10 per cent sale in the public sector behemoth. It was the largest single stake sale of a public sector firm by the government ever. The government is in the process of appointing merchant bankers for stake sale in Coal India, in which it currently holds 78.65% share.

For the current financial year, the government has budgeted to raise Rs 69,500 crore through disinvestment. Of this, Rs 41,000 crore is to come from minority stake sale in PSUs and the remaining Rs 28,500 crore from strategic stake sale. For April- October month of the ongoing fiscal, the government has been able to raise Rs 12,600 crore through stale sale in four PSUs as volatile market conditions have dented disinvestment plans. For disinvestment in 2015-16, the government has a pipeline of over 20 PSUs for which it has the Cabinet approval. These include 10 per cent stake sale each in OIL, Nalco, NMDC, and 5 per cent each in NTPC, ONGC and BHEL.

The CNX Nifty is currently trading at 7815.85, up by 84.05 points or 1.09% after trading in a range of 7765.45 and 7822.25. There were 40 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 3.27%, Hero MotoCorp up by 3.18%, HCL Tech. up by 2.87%, Tech Mahindra up by 2.66% and Reliance Industries up by 2.42%. On the flip side, Idea Cellular down by 1.67%, Dr. Reddys Lab down by 1.43%, Hindalco down by 0.98%, Bank of Baroda down by 0.62% and Coal India down by 0.61% were the top losers.

All the Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 3.07 points or 0.19% to 1,659.57, Jakarta Composite increased 19.88 points or 0.44% to 4,517.79, KOSPI Index surged 26.03 points or 1.33% to 1,988.91, Shanghai Composite gained 30.19 points or 0.85% to 3,598.65, Taiwan Weighted strengthened 136.73 points or 1.64% to 8,477.20, Nikkei 225 added 210.63 points or 1.07% to 19,859.81 and Hang Seng was up by 286.49 points or 1.29% to 22,474.75.