Gap-up opening helps markets recover some last session losses

With a gap-up opening Indian equity markets have recovered most of their previous session losses and are now trading in fine fettle with gains of over half a percent, mirroring strength among the Asian equities with the crude oil prices witnessing stability after touching fresh 2003 lows yesterday. Further, Investor were getting encouragement with Reserve Bank of India Governor Raghuram Rajan’s statement that India is affected by the 'same kind of jitters' impacting other world markets, but things will stabilize and people will look at stable emerging markets, including India. Besides some support also came in on report that FDI flows to India nearly doubled to $59 billion in 2015, largely boosted by steps taken by the government to improve investment climate. Positive trade in Indian rupee also supported the markets. The rupee appreciated 11 paise to 67.84 against the US dollar in early trade today as Asian currency markets witnessed a positive momentum. Meanwhile, the session was also proving positive for broader indices. On the sectoral front, all the sector indices, barring FMCG, were trading in green led by Bankex, Realty, Capital Goods, Power and PSU.

In the scrip specific development, Axis Bank rallied 6% on the BSE after the bank reported a 15% year-on-year (yoy) jump in net profit at Rs 2,175 crore in the October-December quarter (Q3FY16) on the back of higher net interest income and other income.

On the global front, US markets ended lower but well above session lows as the S&P 500 held a technical level and biotechs recovered in late trade. Asian markets were trading mostly in green, arresting a plunge in global markets overnight.

Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,350 and 24,250 levels respectively. The market breadth on BSE was positive in the ratio of 1401: 302 while 60 scrips remained unchanged.

The BSE Sensex is currently trading at 24277.55, up by 215.51 points or 0.90% after trading in a range of 24194.75 and 24351.83. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.44%, while Small cap index gained 1.70%.

The top gaining sectoral indices on the BSE were Bankex up by 2.64%, Realty up by 1.55%, Capital Goods up by 1.38%, Power up by 1.37% and PSU up by 1.00%, while FMCG down by 0.21% was the lone losing index on BSE.

The top gainers on the Sensex were Axis Bank up by 5.24%, ICICI Bank up by 3.28%, Tata Steel up by 2.83%, BHEL up by 2.28% and SBI up by 2.10%. On the flip side, Hindustan Unilever down by 0.82%, ITC down by 0.68%, ONGC down by 0.49%, Maruti Suzuki down by 0.27% and Mahindra & Mahindra down by 0.24% were the top losers.

Meanwhile, soothing the worried nerves amid the ongoing turmoil in global markets, Reserve Bank of India (RBI) governor, Raghuram Rajan has said that India is affected by the 'same kind of jitters' impacting other world markets, but things will stabilize and people will look at stable emerging markets, including India. Rajan allaying fears amid the stock market plunge and the rupee nearing its lowest-ever level, said things will stabilise and people will look at stable emerging markets.

The RBI governor said that “My sense is that after the initial volatility, things will stabilise, people will try and look for the good, stable emerging markets. India is one of them. Our growth is pretty good, all the other indicators seem to be going well.” He added that at this point if you are an emerging market, you focus on fundamentals, try and get inflation down, try and get your current account deficit down, keep your fiscal on target, do all the good things, and then people reward you.

Talking on monetary policy stance in its upcoming policy review, he said that the rest of the world is facing a deflationary environment and 'that will help India disinflate' and added that global investors want to be convinced that India will stay the course will disinflate because they prefer lower inflation.

Though, he also said that monetary policies alone cannot change the world and the governments need to create an underlying framework for growth in the long term for the world economy. He further said that the governments across the world need to realise that there are various other tools to carry forward reforms and boost growth.The CNX Nifty is currently trading at 7362.65, up by 53.35 points or 0.73% after trading in a range of 7361.65 and 7398.70. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 5.19%, ICICI Bank up by 2.85%, Zee Entertainment up by 2.84%, Yes Bank up by 2.51% and Bank Of Baroda up by 2.48%. On the flip side, Idea Cellular down by 1.28%, ONGC down by 0.94%, Coal India down by 0.89%, Hindustan Unilever down by 0.79% and ITC down by 0.68% were the top losers.

Asian markets were trading mostly in green, KOSPI Index increased 11.54 points or 0.63% to 1,856.99, Shanghai Composite increased 15.09 points or 0.51% to 2,991.79, Jakarta Composite increased 18.06 points or 0.41% to 4,446.04, Taiwan Weighted increased 30.89 points or 0.4% to 7,730.01, Hang Seng increased 227.18 points or 1.2% to 19,113.48 and Nikkei 225 increased 265.92 points or 1.62% to 16,682.11.

On the flip side, FTSE Bursa Malaysia KLCI decreased 4.8 points or 0.3% to 1,614.03.