Markets trade higher for the third straight day in early deals; Nifty reclaims 7,400 mark

Extending their northward journey for third continuous day, Indian equity benchmarks are trading in fine fettle in early deals, with Nifty and Sensex recapturing their psychological 7,400 and 24,400 levels respectively, on account of sustained buying by fund and retail investors. Positive trade in other Asian peers also supported the sentiment, following strong US jobs data and rally in the commodities. Further, sentiments were upbeat with the International Monetary Fund (IMF) projecting a robust growth rate of 7.3 percent for the country this fiscal, picking up to 7.5 percent next year. Moreover, appreciation in Indian rupee too supported the markets. The rupee appreciated 15 paise to 67.39 against the US dollar in early trade on Thursday, tracking positive trading in most Asian market currencies. Meanwhile, foreign institutional investors bought shares worth Rs. 1,437 crore on Wednesday. 

In the scrip specific development, Sun Pharma Advanced Research Company (SPARC) rallied over 4% on the BSE ahead of the board meet on March 5, 2016 for the proposed rights issue.

On the global front, the US markets ended higher on Wednesday, as higher oil prices fueled a rally in energy shares. Asian markets were trading mostly in green tracking the positive lead overnight from Wall Street. Taiwan stocks extended gains to rise to their highest level in more than three months.

Back home, traders were seen piling up position in Auto, Metal, IT, Consumer Durables and TECK, while selling was witnessed only in Bankex.  The market breadth on BSE was positive in the ratio of 1077: 461 while 55 scrips remained unchanged.

The BSE Sensex is currently trading at 24448.47, up by 205.49 points or 0.85% after trading in a range of 24383.28 and 24509.18. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.15%, while Small cap index was higher by 0.70%.

The top gaining sectoral indices on the BSE were Auto up by 1.37%, Metal up by 1.31%, IT up by 1.14%, Consumer Durables up by 0.99% and TECK up by 0.90%, while Bankex down by 0.05% was the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.84%, Dr. Reddys Lab up by 2.64%, Tata Steel up by 2.62%, Asian Paints up by 2.09% and Bajaj Auto up by 1.95%. On the flip side, GAIL India down by 1.93%, ICICI Bank down by 1.75%, SBI down by 0.30%, Adani Ports &Special down by 0.27% and ONGC down by 0.13% were the top losers.

Meanwhile, praising the budget 2016 proposals, the multilateral lending agency the International Monetary Fund (IMF) has projected a robust growth rate of 7.3 percent for the country this fiscal, picking up to 7.5 percent next year, supported by stronger domestic demand, and has said that the measures are aimed at increasing public infrastructure spending, rationalising subsidies, creating more flexible labour and product markets as well as enhancing financial inclusion.

Though, the agency's protections are lower than the government's estimate of 7.6 percent growth in 2015-16 and unchanged from its earlier projection at the same rate in January, but it said that India has a very good outlook at the present time. It added that India certainly benefited from low oil and energy prices, one of the worlds largest oil importers and that's raised the real income of all Indians. In its report IMF said that the economy is on a recovery path, helped by a large terms of trade gain (about 2.5 percent of GDP), positive policy actions and reduced external vulnerabilities.

However, it also raised concern and said that main internal risk to a country like India comes from a weak corporate and bank balance sheet. There has been a big increase in non-performing loans in the present time, due to the previous shortfall in investment. It also noted that global financial market volatility, a potential further deterioration in exports, and strains in bank and corporate balance sheets could weigh on India’s growth prospects. It added that high fiscal deficits and upside risks to inflation constrain the scope for countercyclical policies.

It also cautioned that though balance of economic risks has improved, they remain tilted to the downside. These included the impact of intensified volatility on global financial markets, including from surprise unexpected US monetary policy moves or China`s economic slowdown.

The CNX Nifty is currently trading at 7429.60, up by 60.75 points or 0.82% after trading in a range of 7413.60 and 7445.70. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 2.92%, Bajaj Auto up by 2.44%, Tata Steel up by 2.32%, Tata Motors up by 2.11% and HDFC up by 2.10%. On the flip side, GAIL India down by 2.28%, Bank Of Baroda down by 1.79%, ICICI Bank down by 1.66%, Zee Entertainment down by 1.52% and PNB down by 1.08% were the top losers.

Asian markets were trading mostly in green, KOSPI Index increased 3.9 points or 0.2% to 1,951.32, FTSE Bursa Malaysia KLCI increased 5.55 points or 0.33% to 1,696.58, Shanghai Composite increased 6.46 points or 0.23% to 2,856.14, Jakarta Composite increased 23.66 points or 0.49% to 4,859.86, Taiwan Weighted increased 32.22 points or 0.38% to 8,576.27 and Nikkei 225 increased 148.53 points or 0.89% to 16,895.08.

On the flip side, Hang Seng decreased 118.12 points or 0.59% to 19,885.37.