Markets make gap-up opening after falling in last two sessions

After posting losses in last two sessions, Indian equity markets have made a gap-up opening and are trading firmly with gains of over half a percent in early deals amid firm global cues, as the US Federal Reserve chair, Janet Yellen, maintained a cautious tone regarding interest rate hikes. Sentiment on the street further improved with Finance Minister’s statement that he will reach out to the Congress again to persuade it to support the much delayed GST bill in second half of the Budget Session beginning next month. Besides, appreciation in Indian rupee against dollar too supported sentiments.  Extending its rising streak for the fourth day, the Indian rupee appreciated by 16 paise to 66.38 against the US dollar on increased selling of the American currency by exporters and banks amidst continued foreign fund inflows. Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 513 crore yesterday as per provisional data released by the stock exchanges. At present, Sensex and Nifty were trading above the crucial 25,000 and 7,600 levels. Apart from blue chips, broader indices too participated in the rally with both mid cap and small cap indices trading up by around a percent each.

On the global front, US markets ended higher on Monday. The markets benefited from a positive reaction to remarks by Federal Reserve Chair Janet Yellen. Yellen said she considers it appropriate for the Fed to proceed cautiously in adjusting monetary policy given the risks to the economic outlook. Asian markets were trading mostly in green tracking the positive cues overnight from Wall Street after Janet Yellen’s comment  offset recent speculation that the Fed will raise interest rates at its next meeting toward the end of April.

Back home, all the sectoral indices on the BSE were trading in green led by Realty, Oil & Gas, Capital Goods and FMCG. The market breadth on BSE was positive in the ratio of 1231: 293 while 57 scrips remained unchanged.

The BSE Sensex is currently trading at 25065.88, up by 165.42 points or 0.66% after trading in a range of 25055.42 and 25121.69. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.77%, while Small cap index gained 1.07%.

The top gaining sectoral indices on the BSE were Realty up by 1.48%, Oil & Gas up by 1.06%, Capital Goods up by 0.99%, FMCG up by 0.97% and Consumer Durables up by 0.92%.

The top gainers on the Sensex were Bajaj Auto up by 2.17%, ICICI Bank up by 2.10%, Lupin up by 1.97%, Tata Motors up by 1.58% and Adani Ports &Special up by 1.53%. On the flip side, HDFC down by 1.17% and Maruti Suzuki down by 0.72% were the top losers.

Meanwhile, giving a boost to the foreign as well as local e-commerce retail players, the government has allowed 100 percent FDI through automatic route in the marketplace format of e-commerce retailing. Though, the approval has come with riders and many conditions to ensure that platform owners do not turn sellers. Some of the conditions introduced are like the sales cannot exceed 25 per cent for any vendor, marketplace players or their group companies cannot sell, guarantee and warranty must be the sole responsibilities of the sellers, and platform owners cannot influence pricing of products so that there's a level-playing field.

The Department of Industrial Policy and Promotion (DIPP) in a Press Note said that e-commerce marketplace may provide support services to sellers in respect of warehousing, logistics, order fulfilment, call centre, payment collection and other services. DIPP also clarified that foreign direct investment (FDI) has not been permitted in inventory-based model of e-commerce. However, such entities will not exercise ownership over the inventory. Such an ownership over the inventory will render the business into inventory based model.

The government also notified new rules which could potentially end the discount wars, it has now prohibited any discounts to consumers by e-commerce companies, to give the offline retailers level playing field. The new policy also mandates such e-commerce companies to display contact details of the sellers online. The warranty/guarantee of products or services sold online will also be borne by the sellers, not the e-commerce company.

As per the press note of the DIPP, it has defined e-commerce as buying and selling of goods and services, including digital products over digital and electronic network, while a marketplace model is an information technology platform run by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller.

The e-commerce retailing sector has got an estimated $10 billion (Rs 65,000 crore) of foreign investment since it began in a big way 10 years ago. In 2015, around $5 billion (Rs 32,500 crore) of foreign funds were raised by e-commerce companies. The share of e-commerce in retail is expected to jump to 11% in 2019, while the share of physical, organized or modern retail is expected to shrink from present 17% to 13%.

The CNX Nifty is currently trading at 7644.45, up by 47.45 points or 0.62% after trading in a range of 7644.40 and 7665.40. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.16%, ICICI Bank up by 2.04%, Bajaj Auto up by 2.03%, BPCL up by 1.90% and Lupin up by 1.78%. On the flip side, Zee Entertainment down by 1.40%, HDFC down by 1.17%, Kotak Mahindra Bank down by 0.83%, Maruti Suzuki down by 0.79% and Idea Cellular down by 0.37% were the top losers.

Asian markets were trading mostly in green, KOSPI Index increased 5.88 points or 0.29% to 2,000.79, FTSE Bursa Malaysia KLCI increased 6.29 points or 0.37% to 1,721.33, Jakarta Composite increased 22.04 points or 0.46% to 4,803.34, Shanghai Composite increased 41.99 points or 1.44% to 2,961.83, Taiwan Weighted increased 93.14 points or 1.08% to 8,710.49 and Hang Seng increased 284.05 points or 1.39% to 20,650.35.

On the flip side, Nikkei 225 decreased 56.52 points or 0.33% to 17,047.01.