Markets make gap-up opening amid positive global cues

With a gap up opening Indian equity markets have recovered all of their previous session’s loss and are now trading with gains of over half a percent that lifted both the Sensex and Nifty over their psychological 24850 and 7550 levels. Meanwhile, the session was also proving fruitful for broader indices, which outperforming larger counterparts were trading with gains in the range of 0.95-1.00%. Positive trade in other Asian peers supported the markets, after China’s trade data beat the street expectations. The sentiments were further supported  by Indian rupee appreciating by 6 paise to 66.80 against the dollar in early trade on Wednesday at the Interbank Foreign Exchange on account of fresh selling of the American currency by exporters and banks. On the economy front, Consumer Price Index-based (CPI) inflation for December rose to 5.61 per cent, against 5.41 per cent in November and 4.28 per cent in December last year. Industrial output fell 3.2 per cent in November, contracting by the sharpest margin in the past four years. The Index of Industrial Production (IIP) dipped for the first time in the past 13 months in November, after registering a five-year high rise of 9.8 per cent in October.

In the scrip specific development, DCB Bank surged 7% on the BSE after the private sector lender said that gross non-performing assets (NPA) as a percentage of total advances declined marginally to 1.98% at the end of December quarter (Q3FY16), from 1.99% in the previous quarter. Net NPA declined to 1.12% from 1.16% on a sequential basis.

On the global front, the US markets ended higher, as gains in the Technology, Healthcare and Consumer Services sectors led shares higher. On the economy front, job openings rose in November, and more people were hired. Labor’s Job Openings and Labor Turnover Survey showed 5.43 million job openings, up from 5.34 million in October. Asian markets were trading mostly in green as investor sentiment was boosted by the overnight gains on Wall Street and the Chinese government's efforts to stabilize the yuan. China's central bank kept the daily fix for the yuan stable for the fourth consecutive day on Wednesday.

Back home, all the sectoral indices on the BSE were trading in green led by Realty, Auto, Metal, Consumer Durables and Power. The market breadth on BSE was positive in the ratio of 1462: 323 while 82 scrips remained unchanged.

The BSE Sensex is currently trading at 24873.16, up by 191.13 points or 0.77% after trading in a range of 24804.64 and 24900.07. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.98%, while Small cap index up by 0.93%.

The gaining sectoral indices on the BSE were Realty up by 1.43%, Auto up by 1.02%, Metal up by 1.01%, Consumer Durables up by 0.99% and Power up by 0.82%, while there were no losers. 

The top gainers on the Sensex were Tata Motors up by 2.30%, Tata Steel up by 1.87%, Sun Pharma Inds. up by 1.67%, Bharti Airtel up by 1.33% and BHEL up by 1.30%. On the flip side, TCS down by 1.09% and Wipro down by 0.55% were the top losers.

Meanwhile, with an aim to improve ease of doing business, the government is likely to begin a sweeping revamp of direct taxes in the Budget 2016-17 that Finance Minister Arun Jaitley will present next month. This move comes as the Narendra Modi government has pledged a predictable and non-adversarial tax regime. Under this there will be two themes driving the revamp, such as simplification and rationalization. It will help to create more positive perception of India’s tax environment.

Besides, the attempt will be to remove clutter and simplify the tax law. The government has already spelt out this vision with its plan for corporate tax, which is to scrap the excess of exemptions and lower the levy. This will help in making the life simpler for companies and the government, making compliance easier, boosting business and driving up revenue.In the budget 2015-16, Jaitley had said the government wants to lower the corporate tax rate to 25% over the next four years. The Budget next month will carry the process forward besides taking on board some of the suggestions made by the Justice RV Easwar committee on simplifying tax laws. The panel is expected to touch upon many areas, including defining royalties and fees for technical services. Also on the agenda are streamlining the minimum alternate tax (MAT) regime, the subject of many disputes, and taxation of dividends. The panel has been asked to give its first set of recommendations by January end so that these can be taken up in this year's Budget.

The CNX Nifty is currently trading at 7569.60, up by 59.30 points or 0.79% after trading in a range of 7551.20 and 7581.50. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.18%, Tata Steel up by 1.99%, Zee Entertainment up by 1.93%,  Indusind Bank up by 1.89% and Hindalco up by 1.59%. On the flip side, TCS down by 1.42%, Wipro down by 0.71% and Power Grid Corpn down by 0.21% were the only losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.5 points or 0.09% to 1,642.87, Jakarta Composite increased 23.75 points or 0.53% to 4,536.28, KOSPI Index increased 24.02 points or 1.27% to 1,914.88, Taiwan Weighted increased 27.4 points or 0.35% to 7,795.85, Nikkei 225 increased 416.69 points or 2.42% to 17,635.65 and Hang Seng increased 441.49 points or 2.24% to 20,153.25

On the flip side, Shanghai Composite decreased 0.39 points or 0.01% to 3,022.47.