Markets make gap up opening as Fed hikes interest rates on expected lines

Prolonging their northward journey for fourth continuous day, markets have made a gap-up opening and are now trading in fine fettle with gains of around a quarter percent, after the US Federal Reserve raised its benchmark interest rate overnight, for the first time in almost a decade, marking the end of the central bank's unprecedented zero interest rate policy. Further, the sentiment also got a boost with Finance Minister Arun Jaitley hinting at accepting Congress stand on scrapping of one per cent additional tax, and that Good and Services Tax rate could be much less than 18 per cent recommended by Arvind Subramanian panel. Besides, positive opening of Indian rupee too supported the markets.  The rupee rose by 11 paise to 66.62 against the US dollar in early trade today at the Interbank Foreign Exchange. However, up-side remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 503.22 crore yesterday as per provisional data released by the stock exchanges. On the sectoral front, most of the sectoral indices on BSE were trading in green, with prominent gainers being the stocks from Realty, Metal, Consumer Durables, Power and Capital Goods counters. On the flip side, stocks from Oil & Gas and Auto counters were the only loser.

In the scrip specific development, Anuh Pharma rallied 9% on the BSE after the company received World Health Organization (WHO) prequalification for the product Sulfadoxine.

On the global front, the US stocks ended higher after the Federal Reserve raised its key interest rate for the first time in nearly a decade and emphasized a gradual path for future rate hikes. Asian markets were trading in green tracking the overnight rally on Wall Street.

Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,750 and 25,500 levels respectively. The market breadth on BSE was positive in the ratio of 1297: 360 while 92 scrips remained unchanged.

The BSE Sensex is currently trading at 25520.55, up by 26.18 points or 0.10% after trading in a range of 25519.90 and 25659.32. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index gained 0.80%.

The top gaining sectoral indices on the BSE were Realty up by 0.76%, Metal up by 0.56%, Consumer Durables up by 0.55%, Power up by 0.52% and Capital Goods up by 0.36%, while Oil & Gas down by 0.07% and Auto down by 0.04% were the losing indices on BSE

The top gainers on the Sensex were GAIL India up by 1.71%, SBI up by 1.69%, Dr. Reddys Lab up by 1.19%, Bajaj Auto up by 1.08% and Sun Pharma Inds. up by 0.94%. On the flip side, ONGC down by 2.05%, Mahindra & Mahindra down by 0.85%, HDFC down by 0.70%, Maruti Suzuki down by 0.41% and TCS down by 0.13% were the top losers.

Meanwhile, amid the ongoing protest of the opposition and dashing hopes of passage of the Goods and Services Tax (GST) Bill in the ongoing winter session of the parliament, IMF managing director Christine Lagarde has pitched for an early take-off of the Goods and Services Tax, saying that it will help India create more jobs, increase revenue as well as promote domestic manufacturing.

She termed GST as a trade agreement and said, a harmonised and unified GST will broaden tax base and added that “The implementation of GST will help India create jobs and help in raising revenue to finance health, education etc”.

Lagarde also assured support and technical assistance for implementation of the comprehensive indirect tax reform, which will subsume excise and sales taxes. Simple to administer will make GST an efficient taxation too, she added.

Meanwhile, assuring the GST rate to be less than 18 per cent, Finance Minister Arun Jaitley has hinted at accepting Congress' stand on scrapping one per cent additional tax and that Good and Services Tax rate could be much less than 18 per cent recommended by Arvind Subramanian panel.

The CNX Nifty is currently trading at 7771.95, up by 21.05 points or 0.27% after trading in a range of 7767.65 and 7800.15. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were PNB up by 1.99%, GAIL India up by 1.96%, SBI up by 1.94%, Bank Of Baroda up by 1.81% and Tata Power up by 1.77%. On the flip side, ONGC down by 1.99%, Cairn India down by 1.64%, Mahindra & Mahindra down by 0.92%, Zee Entertainment down by 0.70% and HDFC down by 0.55% were the top losers.

Asian markets were trading in green, KOSPI Index increased 5.27 points or 0.27% to 1,974.67, FTSE Bursa Malaysia KLCI increased 12.99 points or 0.79% to 1,647.12, Jakarta Composite increased 51.62 points or 1.15% to 4,535.07, Shanghai Composite increased 52.5 points or 1.49% to 3,568.68, Taiwan Weighted increased 69.69 points or 0.85% to 8,254.35, Hang Seng increased 209.18 points or 0.96% to 21,910.39 and Nikkei 225 increased 436.87 points or 2.29% to 19,486.78.