Markets surge to intraday high, Nifty nears 7900 level

Indian markets have strengthened further in the late morning trade, with both the major indices inching to their intraday highs. The rally started in the morning on good global cues is gaining momentum with traders covering their shorts a day ahead of the F&O series expiry. Traders were also getting support with some global brokerage firms upgrading India’s rating to overweight on hopes that  India earnings will turn later this year resulting in 3 per cent earnings growth in FY2016 before accelerating to 14 per cent YoY growth in FY2017. They also believe that there is room for further easing in monetary conditions. Rebound in rupee too was aiding growth in the markets, the domestic currency after dropping to its over two and half years low after a nine consecutive session's of decline, was showing good strength on fresh selling of the American currency by exporters and banks amid hopes of fund inflows.  

While there was across the board buying that was powering the markets but the surge in the banking stocks has led the rally in the markets. Banking stocks were witnessing good buying interest and the Nifty Bank index was the top sectoral gainer on the NSE. The other sectors that were witnessing good buying interest included IT, capital goods and auto

The broader markets however were underperforming the benchmark indices. The BSE mid-cap and small-cap indices were up by about a percent. The PSU oil marketing companies too have pared most of the early gains, oil futures in global markets pushed closer to $50 a barrel on Wednesday, with US crude hitting its highest in over seven months.

The BSE Sensex is currently trading at 25694.90, up by 389.43 points or 1.54% after trading in a range of 25430.59 and 25696.92. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.85%, while Small cap index gained 0.93%.

The top gaining sectoral indices on the BSE were Bankex up by 2.36%, Capital Goods up by 1.78%, IT up by 1.75%, Realty up by 1.67%, TECK up by 1.66%, while there were no losers on the sectoral front.

The top gainers on the Sensex were ICICI Bank up by 3.88%, HDFC up by 2.94%, SBI up by 2.36%, Maruti Suzuki up by 2.32% and Larsen & Toubro up by 2.30%. On the flip side, Cipla down by 4.83% were the top losers.

Meanwhile, aiming to increase the credibility and effectiveness of the performance in Credit Rating Scheme for both borrowers and banks, the government has approved the revision in guidelines of the Performance in Credit Rating Scheme being implemented by Ministry of MSME through National Small Industries Corporation (NSIC).

Under the revised guidelines, the fee to be paid to the rating agencies shall be based on the turnover of the micro and small enterprises which has been categorised into three slabs. For turnover up to Rs 50 lakh, the fee to be reimbursed by the MSME Ministry will constitute 75 percent of the fee charged by the rating agency subject to a ceiling Rs 15,000. For turnover between Rs 50 lakh and 2 crore, the fee to be reimbursed will be 75 percent of the fee charged by the rating agency subject to a ceiling of Rs 30,000. Similarly, for micro and small enterprises having turnover above Rs 2 crore, the fee to be reimbursed will be 75 percent of the fee charged by the rating agency subject to a ceiling of Rs 40,000.

Besides, only rating agencies registered by SEBI and empanelled as External Credit Assessment Institution (ECAI) by RBI would be eligible to carry out rating of MSEs under the Scheme. The MSME Ministry has further said that the eligible rating agency should apply to receive subsidy under the PCR Scheme on the portal of NSIC. Approval for eligible rating agencies should be given within one month.

The government had earlier sought comments from stakeholders on the recommendations of the Committee set up by MSME Ministry for revision in the guidelines of Performance in Credit Rating Scheme to make it more useful for lenders and Micro & Small Enterprises and increase its effectiveness.

Performance & Credit Rating Scheme was formulated in consultation with Industry Associations, Indian Banks’ Association (IBA) and Rating Agencies, with the objective of creating awareness amongst Small Scale Units. The main objective of the scheme is to provide a trusted third party opinion on the capabilities and creditworthiness of the Micro & Small Enterprises (MSEs) so as to create awareness amongst MSEs about the strengths and weakness of their existing operations.

The CNX Nifty is currently trading at 7873.25, up by 124.40 points or 1.61% after trading in a range of 7809.30 and 7874.70. There were 50 stocks advancing against 1 stock declining on the index.

The top gainers on Nifty were Tech Mahindra up by 6.80%, ICICI Bank up by 3.65%, Indusind Bank up by 3.18%, HDFC up by 2.99% and Tata Motors - DVR up by 2.60%. On the flip side, Cipla down by 4.52% were the lone losers.

The Asian markets were trading mostly in green, KOSPI Index increased 22.83 points or 1.18% to 1,960.51, Jakarta Composite was up by 39.44 points or 0.84% to 4,750.22, Taiwan Weighted moved higher by 95.54 points or 1.15% to 8,396.20, Nikkei 225 surged by 250.39 points or 1.52% to 16,749.15, Hang Seng zoomed by 476.78 points or 2.4% to 20,307.21,

On the other hand, Shanghai Composite declined by 7.2 points or 0.26% to 2,814.46 and FTSE Bursa Malaysia KLCI was tad lower by 0.19 points or 0.01% to 1,625.65.