Markets recover some of previous session losses with a gap up opening; Nifty reclaims 7,400 mark

With a gap up opening Indian equity markets have recovered some of their previous session losses and are now trading in fine fettle with the gains of over half a percent in morning deals, supported by higher oil prices and a weaker dollar following comments from New York Fed President William Dudley that the recent turmoil in financial markets could alter the outlook for the global economy. Sustained buying in mostly all the key heavyweights along with broader indices supported Sensex and Nifty to regain their crucial 24,400 and 7,400 levels respectively. Further, appreciation in Indian rupee against dollar too supported sentiments. The rupee rose by 26 paise to 67.81 against the US dollar in early trade today at the Interbank Foreign Exchange after Fed comments weak data releases in the US pushed dollar lower against major world currencies. Besides, some support also came in with the statement of Finance Minister Arun Jaitley that amid global uncertainty, it is important for India to emerge out of the crisis stronger as it is on a much higher and stabler footing than other nations.

On the global front, the US markets ended mostly higher, with the Dow and S&P completing a massive comeback spurred by a surge in oil. Asian markets were trading mostly in green after U.S. stocks closed mostly higher overnight and as the gains in crude oil as well as other commodity prices on the back of a weaker dollar lifted resources stocks.

Back home, all the sectoral indices on the BSE were trading in green led by Capital Goods, Realty, Power, Oil & Gas and Auto. The market breadth on BSE was positive in the ratio of 1213: 299 while 42 scrips remained unchanged.

The BSE Sensex is currently trading at 24414.77, up by 191.45 points or 0.79% after trading in a range of 24379.98 and 24449.42. 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 0.70%, while Small cap index gained 0.81%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.07%, Realty up by 0.90%, Power up by 0.86%, Oil & Gas up by 0.83% and Auto up by 0.81%, while there were no losers.

The top gainers on the Sensex were Larsen & Toubro up by 2.73%, ONGC up by 2.14%, Adani Ports &Special up by 1.69%, Asian Paints up by 1.49% and Reliance Industries up by 1.25%. On the flip side, Tata Steel down by 1.12%, NTPC down by 0.62%, GAIL India down by 0.50%, Bajaj Auto down by 0.46% and TCS down by 0.11% were the top losers.

Meanwhile, Cabinet Committee on Economic Affairs in its meeting headed by Prime Minister Narendra Modi has approved allocation of coal linkages for non-regulated sector only through auction, ending the past practice of selective allocation and potentially raising costs for users.

Power and Coal Minister Piyush Goyal said that allocation of coal linkages for the non-regulated sector, which includes steel and cement, will be only through the auction route to ensure transparency.

The Minister further said that proposed auction methodology leads to price through a market mechanism; it does not seek to maximise revenue, he said that “it ensures that all market participants of non-regulated sector have a fair chance to coal linkage, irrespective of size.”

Following the decision, state-controlled Coal India will put up a quarter of its production for auction to non-power companies. But companies that had long-term fuel contracts with Coal India will continue to get supplies until their term expires.

Coal Secretary Anil Swarup said that coal linkages for 24 million tonnes would go under the hammer in the first year. Letter of Assurance is issued on furnishing Commitment Guarantee followed by execution of fuel supply agreement (FSA) on the fulfillment of LOA conditions in the stipulated period of time. Till now, Standing Linkage Committee has been deciding on allocation of long-term and short-term linkages for the sectors, including power and steel.

The CNX Nifty is currently trading at 7420.15, up by 58.35 points or 0.79% after trading in a range of 7410.90 and 7431.90. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 4.31%, Vedanta up by 2.76%, Larsen & Toubro up by 2.59%,  ONGC up by 2.18% and Hindalco up by 2.10%. On the flip side, Tata Steel down by 1.18%, GAIL India down by 1.03%, NTPC down by 0.70%, Bajaj Auto down by 0.41% and Tech Mahindra down by 0.35% were the top losers.

Asian markets were trading mostly in green, FTSE Bursa Malaysia KLCI increased 18.29 points or 1.12% to 1,651.59, KOSPI Index increased 19.97 points or 1.06% to 1,910.64, Shanghai Composite increased 28.9 points or 1.06% to 2,768.15, Jakarta Composite increased 64.68 points or 1.41% to 4,660.79 and Hang Seng increased 281.45 points or 1.48% to 19,273.04.

On the flip side, Nikkei 225 decreased 121.29 points or 0.71% to 17,069.96 and Taiwan Weighted decreased 68.24 points or 0.84% to 8,063.00.