Benchmarks trade jubilantly in early deals; Sensex recaptures 28,800 mark

Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals with frontline gauges recapturing their crucial 28,800 (Sensex) and 8,850 (Nifty) levels. Sentiments remained up-beat on expectation of further delay in interest rate hike by the US Federal Reserve on account of slower than expected US jobs data in August. Traders also took some encouragement with report that growth in India’s service industry accelerated to its fastest pace in more than 3-1/2 years in August, driven by a surge in domestic and foreign demand. The Nikkei/Markit Services Purchasing Managers’ Index jumped to 54.7 in August, its highest since January 2013, from 51.9 in July. Some support also came with report that foreign institutional investors remained net buyers in equities worth Rs 231 crore on Friday, as per provisional stock exchange data.

Positive cues front Asian counterparts too were aiding sentiments. Most of the regional peers were trading in green at this point of time and some of the indices in the region are trading near one-year high as prospects for a US interest-rate increase this month remained subdued. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. The market breadth on the BSE was positive; there were 1,400 shares on the gaining side against 547 shares on the losing side while 82 shares remain unchanged.

The BSE Sensex is currently trading at 28807.55, up by 275.44 points or 0.97% after trading in a range of 28631.27 and 28814.54. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 0.98%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Bankex up by 1.48%, Auto up by 1.47%, Realty up by 1.26%, Industrials up by 1.22% and Finance up by 1.19%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Axis Bank up by 2.85%, Tata Motors up by 2.53%, Asian Paints up by 2.02%, Maruti Suzuki up by 1.99% and NTPC up by 1.41%. On the flip side, Bharti Airtel down by 1.55%, TCS down by 0.31%, Coal India down by 0.21% and Wipro down by 0.12% were the top losers.
Meanwhile, Raghuram Rajan, after stepping down as the Governor of the Reserve Bank of India has warned that ‘low interest rates globally could distort markets and would be difficult to abandon’. He said that low interest rates should not be a substitute for “other instruments of policy” and 'various kinds of reforms' that are needed to encourage growth.

Rajan further stated that countries around the world, including the United States and Europe, have kept interest rates low as a way to encourage growth. But countries could become “trapped” by fear that when they eventually raised rates, they 'would see growth slowdown.

His views hold importance as the world's central banks appear to be at a loss about how to get global growth moving again and there are numbers of voices saying that low rates are not doing the job and that governments must take other, more politically difficult steps to reinvigorate growth.

Talking about India, Rajan said his tight monetary policy had helped bring India's rate of inflation - currently about 6 percent - down to the upper end of the government's target range and expressed hope that his successor will finish the process of cleaning bank balance sheets.

The CNX Nifty is currently trading at 8883.65, up by 74.00 points or 0.84% after trading in a range of 8848.45 and 8887.05. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.85%, Tata Motors up by 2.57%, Tata Motors - DVR up by 1.96%, Maruti Suzuki up by 1.93% and Asian Paints up by 1.87%. On the flip side, Idea Cellular down by 1.72%, Bharti Airtel down by 1.57%, HCL Tech. down by 1.00%, Bharti Infratel down by 0.42% and TCS down by 0.36% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite rose 0.76 points or 0.02% to 3,072.86, KOSPI Index gained 3.08 points or 0.15% to 2,063.16, FTSE Bursa Malaysia KLCI strengthened 7.65 points or 0.46% to 1,685.73, Nikkei 225 added 34.04 points or 0.2% to 17,071.67, Taiwan Weighted increased 68.9 points or 0.76% to 9,159.03 and Hang Seng increased 76.54 points or 0.32% to 23,726.09. On the flip side, Jakarta Composite was down by 7.46 points or 0.14% to 5,349.49.