Markets make gap-up opening amid positive global cues

Extending previous session’s rally, Indian equity benchmarks have made a gap-up opening and are trading with traction in the early deals on Wednesday, with frontline gauges recapturing their crucial 7,750 (Nifty) and 25,500 (Sensex) bastion, supported by firm global cues. Broader indices are also trading in line with larger counterparts posting gains in the range of 0.55-0.65%. Traders were also getting encouragement with Finance Minister Arun Jaitley making a fresh bid to end the deadlock on Goods and Services Tax (GST) bill as he reached out to main opposition Congress. Meanwhile, it has been reported that the draft model law on GST will be finalised in a month's time. Besides, positive opening of Indian rupee too supported the sentiments. However, traders are likely to remain cautious ahead of the outcome of the US Federal Reserve's two-day meet which ends later today. 

In the scrip specific development, Mahindra & Mahindra dropped over 5 per cent after the Supreme Court on Tuesday agreed to ban registration of diesel SUVs and cars over 2000 cc. Mahindra & Mahindra's portfolio comprises more of diesel SUVs.  

On the global front, the US stocks ended higher, as gains in the Oil & Gas, Financials and Healthcare sectors led shares higher. Asian markets were trading in green, tracking the overnight rally on Wall Street and in European markets as well as the rebound in crude oil prices.

Back home, all the sectoral indices, barring Auto, were trading in fine fettle led by Oil & Gas, PSU, Realty and Power.  The market breadth on BSE was positive in the ratio of 1226: 373 while 96 scrips remained unchanged

The BSE Sensex is currently trading at 25506.48, up by 186.04 points or 0.73% after trading in a range of 25372.47 and 25507.43. 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 0.57%, while Small cap index gained 0.64%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.48%, PSU up by 1.25%, Realty up by 1.04%, Power up by 0.98% and TECK up by 0.86%, while Auto down by 0.73% was the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 4.57%, ONGC up by 2.09%, BHEL up by 1.84%, Bharti Airtel up by 1.36% and Sun Pharma Inds. up by 1.12%. On the flip side, Mahindra & Mahindra down by 5.28%, Wipro down by 0.60%, Tata Motors down by 0.58%, ITC down by 0.31% and ICICI Bank down by 0.30% were the top losers.

Meanwhile, Moody's Investors Service in its latest report titled Sovereigns -- Global: Likely Fed Rate Hike Reflects Strength of US Recovery, But Exposes Some EM Sovereigns to Volatile Capital Flows, has projected the US Federal Reserve to hike rates by 0.25 percent and has said that the likely interest rate hike by the US Federal Reserve this week could pose risks to some emerging markets.

It said that lower global commodity prices and possible volatility in capital flows will pose challenges to some emerging markets, however a combination of reserve buffers and policy vigilance has the capacity to limit the negative sovereign credit impact.  But added that the sovereigns having little policy room to protect growth and buffer themselves from external shocks are likely to be affected the most.

Moody’s said that the most affected large emerging markets and those most at risk going forward have tended to be those such as Brazil, Russia, Turkey and to some extent South Africa, where severe domestic challenges have contributed to exchange rate and financial market instability, and where policy room to buffer external shocks and protect growth is less robust.

The agency though said that “While a Fed rate hike would remove an element of uncertainty for emerging market sovereigns, some will remain at risk to adverse capital flows and investor sentiment. For example, there is a low risk of a disorderly reaction should investors abruptly adjust their expectations for yields.

The CNX Nifty is currently trading at 7752.80, up by 51.90 points or 0.67% after trading in a range of 7715.75 and 7753.85. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 4.94%, GAIL India up by 3.87%, BPCL up by 2.96%, ONGC up by 1.88% and BHEL up by 1.81%. On the flip side, Mahindra & Mahindra down by 5.47%, Wipro down by 0.64%, Tata Motors down by 0.59%, ITC down by 0.48% and ICICI Bank down by 0.30% were the top losers.

Asian markets were trading in green, FTSE Bursa Malaysia KLCI increased 9.39 points or 0.58% to 1,632.23, Shanghai Composite increased 24.86 points or 0.71% to 3,535.21, Jakarta Composite increased 38.45 points or 0.87% to 4,447.62, KOSPI Index increased 40.55 points or 2.1% to 1,973.52, Taiwan Weighted increased 113.8 points or 1.41% to 8,187.15, Nikkei 225 increased 395.93 points or 2.13% to 18,961.83 and Hang Seng increased 461.05 points or 2.17% to 21,735.42.