Benchmarks trade jubilantly on sanguine global cues

Indian equity benchmark have made a gap-up start and are trading jubilantly in early deals with frontline gauges recapturing their crucial 28,700 (Sensex) and 8,800 (Nifty). Sentiments remained up-beat on firm cues from Asia and overnight gains on Wall Street, after weak US retail sales data dimmed the prospects of a rate hike by the US Federal Reserve at its meeting later this month. Traders took encouragement with report that Prime Minister Narendra Modi targeting to roll out the ambitious GST on April 1 next year, has directed that all steps required in this direction should be completed before that date. He has also said that GST Council would need to have intensive meetings to be able to make timely recommendations relating to its mandate.

On the sectoral front, stocks related to infra sector remained on buyers’ radar, as the Union Minister Nitin Gadkari has said that the government will soon launch three expressway projects - Delhi-Amritsar-Katra, Delhi-Jaipur and Vadodara-Mumbai- soon at a cost of about Rs 1,32,000 crore. The PSU oil marketing companies too edged higher, after Petrol price was on Friday hiked by 58 paise a litre, while diesel rate was cut by 31 paise per litre in line with international trends.

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 indicating the overall health of the market was strong, with 1502 shares gaining and 414 shares declining, while a total of 85 shares were unchanged.

The BSE Sensex is currently trading at 28701.17, up by 288.28 points or 1.01% after trading in a range of 28520.17 and 28736.43. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.06%, while Small cap index was up by 0.93%.

The top gaining sectoral indices on the BSE were Auto up by 1.61%, Bankex up by 1.60%, Power up by 1.36%, PSU up by 1.36% and FMCG up by 1.11%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Bajaj Auto up by 2.69%, Hero MotoCorp up by 2.46%, GAIL India up by 2.25%, Axis Bank up by 2.21% and Maruti Suzuki up by 2.13%. On the flip side, HDFC down by 0.29% were the top losers.

Meanwhile, the commerce ministry is concerned over continuous slowdown in exports and is working on the three important pillars that is exchange rate policy, alignment of freight rates with global standards and a liberalised visa regime to boost exports of goods and services in the long run. In a draft Cabinet note circulated earlier to seek views of different ministries, it has suggested that a mechanism be formulated to ensure the rupee-dollar exchange rate reflect realistic value of the domestic currency. This is important because the rupee, which is apparently overvalued and destroyed the competitiveness of Indian products in the global markets.

The ministry has argued that adjustments in exchange rate policy are needed as it is important to increase competitiveness of the products. The exchange rate policy should be based on inflation differential and trade deficit. Currently Indian currency’s real effective exchange rate (REER) is viewed as overvalued compared to several countries like Mexico, South Africa, Argentina and Brazil. Some countries try to keep their currencies undervalued to gain competitive edge in the international market.

As regards the freight rates, India needs to align them with those in the competing nations. Often manufacturers and exporters have to bear the cost of high freight rates. Regarding the visa regime, the Commerce Ministry is proposing several steps such as giving long term and multiple entry visa to businessmen in order to boost India’s services exports. The ministry has already suggested these measures to the home ministry. All these steps are aimed at increasing the country’s share in the global trade. It is aiming to increase its share to 3.5 per cent from the current 2 per cent by 2020.

The CNX Nifty is currently trading at 8825.90, up by 83.35 points or 0.95% after trading in a range of 8780.25 and 8835.00. There were 49 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.84%, Hero MotoCorp up by 2.46%, GAIL India up by 2.35%, Bank of Baroda up by 2.28% and Ambuja Cement up by 2.24%. On the flip side, HDFC down by 0.21% and HCL Tech down by 0.03% were the top losers.

Asian markets were trading in green; Jakarta Composite gained 31.42 points or 0.6% to 5,297.23 and Nikkei 225 was up by 52.78 points or 0.32% to 16,457.79, while Shanghai Stock Exchange, Hong Kong Stock Exchange, Malaysia Stock Exchange, Seoul Stock Exchange and Taiwan Stock Exchange were closed on account of National holiday.