Markets trade higher in early deals amid firm global cues

Domestic equity indices have made a gap-up opening and are now trading in fine fettle with Sensex rising over 200 points and Nifty moving above its crucial psychological level of 7,550, in early deals on Monday, after posting modest gains last week to extend gains for the second consecutive week on the back of renewed buying interest by foreign investors.  Meanwhile, the broader markets were trading in-line with the benchmark indices. The BSE mid-cap and small-cap indices advanced around a per cent each. The sentiment got a boost with International Monetary Fund (IMF) chief Christine Lagarde’s statement that the fiscal stance adopted by India is exactly appropriate and a very sensible objective that has been set. Appreciation in Indian rupee against dollar too supported the markets. Rupee strengthened by 15 paise to 66.90 against the dollar in early trade at Interbank Foreign Exchange, extending its upward march for a fourth straight day on sustained selling of the US currency by exporters and banks On the economic front, India's Index of Industrial Production (IIP) for January stood at -1.5 contracting for the third straight month, weighed down by manufacturing data which dropped to -2.8% vs -2.4% month-on-month (MoM).

In the scrip specific development, Tata Motors was trading higher by 4%, extending its Friday’s 2% gain on the BSE, after the company reported 17% year-on-year increase in group global wholesales, including that of Jaguar Land Rover (JLR) vehicles, at 98,842 units in February 2016. The company had sold 83,951 units in February 2016.

On the global front, the US markets ended higher on Friday with the S&P500 index climbing 1.6 per cent. The gains were seen on a rise in crude oil prices after the International Energy Agency said that oil prices might have bottomed, as production declines in the United States and other non-OPEC producers accelerate and an increase in Iranian supply has been less than dramatic. Asian markets were trading in green, extending gains from Friday, reflecting renewed optimism about the European Central Bank's new stimulus measures and on higher crude oil prices. Better than expected Japanese core machine orders data also boosted risk appetite.

Back home, traders were seen piling up position in Bankex, Auto, Realty, Capital Goods and FMCG, while selling was witnessed in Metal and PSU.  The market breadth on BSE was positive in the ratio of 1242: 289 while 74 scrips remained unchanged.

The BSE Sensex is currently trading at 24934.66, up by 216.67 points or 0.88% after trading in a range of 24801.70 and 24960.51. 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 0.86%, while Small cap index gained 0.90%.

The top gaining sectoral indices on the BSE were Bankex up by 1.46%, Auto up by 1.31%, Realty up by 0.95%, Capital Goods up by 0.92% and FMCG up by 0.92%, while Metal down by 1.33% and PSU down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 4.01%, ICICI Bank up by 3.41%, Adani Ports &Special up by 2.67%, Axis Bank up by 1.88% and GAIL India up by 1.68%. On the flip side, Coal India down by 6.35%, Bharti Airtel down by 1.32%, Asian Paints down by 0.18%, Bajaj Auto down by 0.10% and Dr. Reddys Lab down by 0.06% were the top losers.

Meanwhile, giving a pat to government’s plan of sticking with the roadmap to narrow the fiscal deficit to 3.5 percent of gross domestic product (GPD) in the next financial year while raising public investment and focusing on distressed farm economy and infrastructure, the International Monetary Fund (IMF) has termed fiscal stance as appropriate and sensible. IMF chief Christine Lagarde while addressing the 3-day Advancing Asia conference, said that “We consider that the fiscal stance adopted by India is exactly appropriate and a very sensible objective that has been set. It's just the right one that has been set under the given circumstances.”

Lagarde further said that “We also highly value the investments being made into major infrastructure projects because we believe it is the right way to stimulate short-term growth'. Such investment could be called short-term stimulus and will improve medium to longer-term productivity in the country. She also said that this also means trying to eliminate as many bottlenecks as possible and reap the benefits of agriculture, manufacturing taking place in various parts of this very large and beautiful country.

The IMF chief said that there is the potential for growth, there is a growing population, there is scale of markets, there is a determination to reform, there are technological breakthroughs and there is creativity in an economy that is clearly on a road to growth and with a solid business model and a population that is also growing, there is no obstacle to growth at the moment,

On concern side, she pointed that while India is a net beneficiary of low oil prices, the only downside risk it faces is from asynchronous monetary policies and the spillover impact it could have, but added that 'I think clearly, India is mindful of preparing for that and is very attentive to its fundamentals in order to be able to resist that'.

The CNX Nifty is currently trading at 7574.40, up by 64.20 points or 0.85% after trading in a range of 7540.55 and 7583.70. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.99%, ICICI Bank up by 3.34%, Adani Ports &Special up by 2.51%, Hindalco up by 1.92% and Vedanta up by 1.89%. On the flip side, Coal India down by 6.35%, Bharti Airtel down by 1.10%, Asian Paints down by 0.49% and Dr. Reddys Lab down by 0.07% were the top losers.

Asian markets were trading in green, KOSPI Index increased 0.11 points or 0.01% to 1,971.52, FTSE Bursa Malaysia KLCI increased 4.97 points or 0.29% to 1,701.51, Jakarta Composite increased 37.16 points or 0.77% to 4,850.94, Taiwan Weighted increased 43.12 points or 0.5% to 8,749.26, Shanghai Composite increased 72.45 points or 2.58% to 2,882.76, Hang Seng increased 270.18 points or 1.34% to 20,469.78 and Nikkei 225 increased 303.92 points or 1.79% to 17,242.79.