Markets trade at the highs of the day supported by gains in bank and Capital Goods

Indian markets showing smart recovery are continuing their bull run in early noon trade on Tuesday, trading at the high point of the day. Positive global cues and some upbeat earnings in the morning have supported the markets to move higher. HCL Tech, which reported its earnings prior to market opening and suffered sharp profit booking, too has pared most of its losses and was trading down by one percent. HCL Technologies reported 0.2 percent rise in consolidated net profit at Rs. 1,920 crores for the second quarter ended December 31, 2015. Consolidated revenues grew 11.4 percent at Rs. 10,341 crores in the October-December quarter as against Rs. 9,283 crores in the same quarter of the 2014-15 fiscal. However, the markets momentum was mainly buoyed by buying witnessed in banking stocks. Which are experiencing good lower level demand after the RBI governor Raghuram Rajan and two of his deputies met with banks and other financial institutions on Monday to discuss stressed loans in the banking system. Broader markets also extended gains and the BSE Midcap index and the BSE Smallcap index were up by around one and half percent each. Snapping its three-day losing streak, the rupee too edged higher and supported the equity markets. On the global front, while most of the Asian markets were in green, the European futures were showing strong start of the markets, further boosting the domestic market sentiments.

The BSE Sensex is currently trading at 24456.01, up by 267.64 points or 1.11% after trading in a range of 24247.23 and 24466.69. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices too were trading in green; the BSE Mid cap index was up by 1.36%, while Small cap index gained 1.50%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.26%, Bankex up by 1.92%, Realty up by 1.74%, Power up by 1.72%, Oil & Gas up by 0.97%, while Consumer Durables down by 0.66% was the lone losing index on BSE.

The top gainers on the Sensex were Axis Bank up by 5.23%, Adani Ports up by 4.53%, ICICI Bank up by 3.19%, Larsen & Toubro up by 3.19% and Bharti Airtel up by 2.88%. On the flip side, Coal India down by 1.16%, Asian Paints down by 0.89%, Wipro down by 0.84%, Maruti Suzuki down by 0.68% and Mahindra & Mahindra down by 0.48% were the top losers.

Meanwhile, in order to help reduce the sovereign yields which are pushing prices up, the Reserve Bank of India (RBI) has asserted that it will buy back Rs 10,000 crore worth of government bonds. RBI will purchase the government bonds in the four different sets of securities on January 20, 2016.

Out of the total four securities, Central Bank will take two of the securities from the investors that are extremely liquid papers including the earlier benchmark bonds maturing in May 2025 and March 2030. This will help to create replacement demand of government bonds from investors, who shall have sold those to RBI. Furthermore, the buying back of long term papers is seen as a measure that should trigger a rally in sovereign bond yields.

During 2015, RBI had slashed interest rate by 125 basis points, but towards the end of the year, the benchmark bond yielded just five to 10 basis points at 7.70-7.80%, lower than the level seen at the beginning of the year.

Earlier, in December RBI had offered to buy four government securities for an aggregate value of Rs.10,000 crore through an auction on 7 December, saying that the move is based on its assessment of prevailing and evolving liquidity conditions. It was the first such auction since January 2014.

The CNX Nifty is currently trading at 7435.00, up by 84.00 points or 1.14% after trading in a range of 7364.15 and 7436.85. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 5.33%, Idea Cellular up by 5.02%, Adani Ports up by 4.81%, Tata Power up by 4.79% and Yes Bank up by 4.09%. On the flip side, Coal India down by 0.92%, Tech Mahindra down by 0.91%, HCL Tech. down by 0.88%, Maruti Suzuki down by 0.85% and Asian Paints down by 0.76% were the top losers.

All the major Asian markets were in green, FTSE Bursa Malaysia KLCI increased by 5.76 points or 0.35% to 1,628.40, KOSPI Index gained 11.19 points or 0.6% to 1,889.64, Taiwan Weighted was up by 43.7 points or 0.56% to 7,854.88, Nikkei 225 added 92.8 points or 0.55% to 17,048.37, Shanghai Composite gained 93.03 points or 3.19% to 3,006.87 and Hang Seng surged by 269.09 points or 1.4% to 19,506.54.