Markets extend last session rally with gap-up opening; Nifty reclaims 7,550 mark

Extending their previous session’s rally, Indian equity benchmarks have made a gap-up start and are trading in fine fettle in early deals on Thursday, with Sensex and Nifty recapturing their respective crucial levels of 24,900 and 7,550. Traders were taking cues from the surge in global markets after the US central bank said it wouldn’t raise interest rates as quickly as expected. Traders were also getting support from the upbeat news that Central Board of Direct Taxes eased tax framework to attract offshore fund houses. CBDT, the apex direct taxes body, has announced rules to implement the new regime that kicks in from April 1. The sentiments were further supported by Indian rupee appreciating by 36 paise to 66.86 against the US dollar in early trade on Thursday after the US Federal Reserve kept interest rates unchanged and anticipated two rate hikes in the remainder of the year rather than four forecast earlier.  Besides, buying in banking shares too aided the sentiment. ICICI Bank, Punjab National Bank, Bank of Baroda, Federal Bank, State Bank of India, Yes Bank and Canara Bank were trading higher, on expectation that the Reserve Bank of India (RBI) may cut the policy rate any time between now and a scheduled monetary policy review on April 5, 2016. Moreover, shares of oil marketing companies (OMCs) such as Bharat Petroleum Corporation (BPCL), Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation (HPCL) rallied more than 2% after the petrol and diesel prices were hiked on Wednesday.

On the global front, the US markets closed higher on Wednesday after the Fed announced its widely expected decision to leave interest rates unchanged in a range from 0.25 percent to 0.50 percent. Asian markets were tracking the gains made on Wall Street overnight with the US central bank taking a more cautious approach to its monetary policy strategy at its latest meeting.

Back home, all the sectoral indices on the BSE were trading in green led by Oil & Gas, PSU, Metal, Capital Goods and Bankex.  The market breadth on BSE was positive in the ratio of 1273: 293 while 65 scrips remained unchanged.

The BSE Sensex is currently trading at 24944.16, up by 261.68 points or 1.06% after trading in a range of 24847.86 and 24948.30. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.10%, while Small cap index was up by 0.96%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.59%, PSU up by 1.72%, Metal up by 1.50%, Capital Goods up by 1.42% and Bankex up by 1.42%, while there were no losers.

The top gainers on the Sensex were Adani Ports &Special up by 3.11%, GAIL India up by 3.01%, ICICI Bank up by 2.58%, ONGC up by 1.96% and SBI up by 1.94%. On the flip side, Dr. Reddys Lab down by 0.41%, Sun Pharma Inds. down by 0.32%, Lupin down by 0.17% and Cipla down by 0.06% were the top losers.

Meanwhile, the Government in its effort to address difficulties faced by stakeholders and to improve the ease of doing business in the country, has introduced a bill in the Lok Sabha to further amend the Companies Act. Earlier, a government-appointed panel chaired by Corporate Affairs Secretary had suggested nearly 100 amendments to the new Companies Act to make it easier to do business in India. This is the second time that the current government would be amending the Companies Act, 2013 which was passed during the previous UPA regime.

The bill seeks to simplify private placement process, remove restrictions on layers of subsidiaries and investment companies, amend CSR provisions to bring greater clarity and exempt certain class of foreign entities from the compliance regime under the Act. The bill also proposes to allow unrestricted object clause in the Memorandum of Association dispensing with 'detailed listing of objects, self-declarations to replace affidavits from subscribers to memorandum and first directors' and is looking to omit provisions relating to forward dealing and insider trading from the Act.

Other recommendations proposed in the Bill include introduction of test of materiality for pecuniary interest for testing independence of independent directors, removal of requirement for annual ratification of appointment or continuance of auditor, align prescription for companies to have audit committee and nomination and remuneration committee with that of independent directors.

Presenting the Union Budget for 2016-17, Jaitley had said the proposed bill to amend the Companies Act 2013 will remove the difficulties and impediments to ease of doing business. He had added that the Bill would also improve the enabling environment for start-ups and the registration of companies will also be done in one day.

The Nifty is currently trading at 7583.15, up by 84.40 points or 1.13% after trading in a range of 7555.45 and 7585.30. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were BPCL up by 4.51%, Cairn India up by 3.44%, Vedanta up by 3.24%, Adani Ports &Special up by 3.04% and GAIL India up by 2.88%. On the flip side, Dr. Reddys Lab down by 0.45%, Lupin down by 0.40%, Sun Pharma Inds. down by 0.28% and NTPC down by 0.08% were the top losers.

Asian markets were trading in green, FTSE Bursa Malaysia KLCI increased 12.14 points or 0.72% to 1,705.57, Shanghai Composite increased 15.97 points or 0.56% to 2,886.40, KOSPI Index increased 24.47 points or 1.24% to 1,999.37, Jakarta Composite increased 32.93 points or 0.68% to 4,894.37, Taiwan Weighted increased 53.22 points or 0.61% to 8,752.36, Nikkei 225 increased 214.54 points or 1.26% to 17,188.99 and Hang Seng increased 286.94 points or 1.42% to 20,544.64.