Markets extend rally; Sensex reclaims 23400 level

Buoyed by firm global cues, Indian equity benchmarks have extended their rally and are trading jubilantly with a gain of over two percent in the late morning session, with frontline gauges inching towards their crucial 23,500 (Sensex) and 7,150 (Nifty) levels. Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over 2.90%. Sentiments got a boost with Prime Minister Narendra Modi’s statement that India is the fastest developing country among the “larger economies of the world”. He further said that India is the only economy which has not been affected by the global economic crisis that has hit the world.  Appreciation in Indian rupee too supported the sentiments. Indian rupee strengthened by 11 paise to 68.12 against the dollar in early trade on increased selling of the US currency by exporters and banks. Meanwhile, the banking and financial stocks rallied after finance minister Arun Jaitely  said the government would reduce its stake in public sector banks (PSBs) to 52 per cent, while Oil marketing companies have gained on the back of encouraging third quarter earnings.  Investors didn't show much of a reaction, to the macro-economic data released by the government post market hours on Friday. The data released revealed that factory output shrunk for the second straight month in December to 1.3%. The consumer price inflation edged up to a 17-month high of 5.69 per cent in January, driven up by higher food costs.

On the global front, Asian markets trading mostly higher, with Japan shares surging after last week's sharp selloff. But China's shares lost ground as its markets re-opened after the week-long Lunar New Year holiday. Japan’s economy shrank more than expected in the final quarter of last year by 1.4% thus raising hopes of more stimulus by the policymakers. Meanwhile, US stocks ended higher on Friday with the S&P 500 ending a five-day losing streak with rebound in energy and financial shares leading the gains. Back home, all BSE sectoral indices were trading in the green. Among them, metal index gained the most by 5.71 per cent, followed by Realty 5.23 per cent, PSU 4.18 per cent and Capital Goods 3.83 per cent. In scrip specific development, shares of Ceat have surged after the company reported 27% growth in consolidated net profit at Rs 113 crore for the quarter ended December 31, 2015 compared with Rs 89 crore in the same quarter last fiscal. On the other hand, shares of Financial Technologies (FTIL) have slipped after the government ordered the merger of crisis-hit National Spot Exchange (NSEL) with the company.

The market breadth on BSE was positive, out of 2271 stocks traded, 1802 stocks advanced, while 390 stocks declined on the BSE. 

The BSE Sensex is currently trading at 23461.34, up by 475.22 points or 2.07% after trading in a range of 23197.67 and 23473.42. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 2.95%, while Small cap index up by 3.35%.

The top gaining sectoral indices on the BSE were Metal up by 5.71%, Realty up by 5.23%, PSU up by 4.18%, Capital Goods up by 3.83% and Oil & Gas up by 3.44%, while there were no losers on BSE sectoral space.

The top gainers on the Sensex were Tata Steel up by 9.46%, Adani Ports &Special up by 8.20%, SBI up by 5.97%, Larsen & Toubro up by 4.16% and Lupin up by 4.04%. On the flip side, Bharti Airtel down by 1.15% was the only loser on BSE.

Meanwhile, expressing his hope that Congress will cooperate in ensuring the functioning of Parliament, Union Parliamentary Affairs Minister M Venkaiah Naidu has said that he is confident and optimistic that bills pertaining to formation of a realty regulator and the much-awaited indirect taxation reform Goods and Service Tax (GST) will be passed in the upcoming Budget session. He further said that he himself and Finance Minister Arun Jaitley has spoken to the congress leaders and added that the time has come for us to come together as lot of time is being wasted on it.

Further, commenting on the Congress's current stance of stalling Parliament and then putting forth certain changes in the bill it wants he said they're raising certain issues which they did not raise when they brought the Bill in 2008.  Naidu said passing the Real Estate Regulation and Development Bill is essential because in the absence of a watchdog, people can be fleeced by fly-by-night operators in the sector.

Earlier, in January, Naidu has said that the Modi government has agreed to accept the demands raised by the opposition congress Party, to pass GST Bill. Further he said that the government is ready to start the upcoming Parliament session earlier than scheduled to pass the bill in the Rajya Sabha if the Congress is willing to support it.

The CNX Nifty is currently trading at 7136.45, up by 155.50 points or 2.23% after trading in a range of 7056.80 and 7140.75. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 19.26% and Vedanta up by 10.36% and Tata Steel up by 9.29% and Adani Ports & Special up by 8.48% and Hindalco up by 6.81%. On the flip side, Idea Cellular down by 1.19% and Bharti Airtel down by 0.86% were the only losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI was up by 0.77%, Jakarta Composite up by 0.49%, KOSPI Index up by 1.31%, Hang Seng up by 2.77% and Nikkei 225 up by 6.34%.  On the flip side, Shanghai Composite was down by 1.44% and Taiwan Weighted was down by 0.26%.