Benchmarks trade jubilantly in early deals; Sensex reclaims 27,600 mark

Indian equity benchmarks have made a gap up opening and are trading jubilantly in early deals on Thursday, as traders opted to buy beaten down but fundamentally strong stocks after yesterday’s drubbing. Some support came after Industry body ASSOCHAM has expressed confidence that apprehensions linked to US President elect Donald Trump would certainly prove wrong even as India Inc looks forward to taking bilateral economic engagement to a greater level under the new administration. India Inc can join hands with the Trump Administration in building of the US infrastructure projects. Traders also took some encouragement with Union Finance Minister Arun Jaitley’s statement that the Modi government’s decision to withdraw Rs 500 and Rs 1000 notes will move the country towards a cashless economy. He also said that deposits of now-defunct old Rs 500 and Rs 1,000 currency notes in bank accounts will not enjoy immunity from tax and law will apply on source of such money.

Global cues too remained supportive with Asian counters rallying at this point of time and the Japanese markets has recovered more than what it had lost in last session's biggest daily drop since the Brexit poll. The US markets recovering from the early slide posted strong gains in last session after Donald Trump defeated Hillary Clinton. He has promised that he will build a wall along the border with Mexico, suspend the Syrian refugee resettlement program, repeal and replace the Affordable Care Act and renegotiate NAFTA.

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 remained in favor of advances, as there were 1,788 shares on the gaining side against 222 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex is currently trading at 27620.16, up by 367.63 points or 1.35% after trading in a range of 27491.93 and 27642.57. 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 1.92%, while Small cap index was up by 2.60%.

The top gaining sectoral indices on the BSE were Realty up by 5.16%, Metal up by 4.79%, Basic Materials up by 3.34%, PSU up by 2.59% and Bankex up by 2.15%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 7.92%, Cipla up by 6.04%, SBI up by 4.33%, Adani Ports & Special up by 3.99% and Sun Pharma up by 3.58%. On the flip side, Asian Paints down by 1.49%, HDFC down by 0.92%, Infosys down by 0.50% and Lupin down by 0.07% were the top losers.

Meanwhile, in line with the government’s decision to withdraw high-denomination bank notes of Rs 500 and Rs 1,000, Finance Minister Arun Jaitley said that deposits of not functioning currency notes in bank accounts will not enjoy immunity from tax and the land of law will apply on source of such money.  He also said, in order to get newer or smaller denomination currencies, old currency notes have to be deposited in bank accounts.

Housewives, farmers with genuine savings and small amounts that people will deposit like Rs 25,000, 30,000 or 50,000 lying in house for expenses, whatever money could be there for meeting normal family expenses they need not worry about depositing cash in their bank accounts. Jaitley said that if the money is legitimate which had been previously withdrawn from bank or earned legally and saved and had been disclosed, there is nothing to worry about. But if it is illegal money, the source will have to be disclosed and if it is crime money, or bribe money, then the person is in trouble.

Finance Minister said that the move would help to make more and more transactions become digital and also said that people will now disclose income and pay taxes. According to him, the decision would bring more transactions under tax net and both direct and indirect taxes would move up. Also, India will become a more tax-compliant society.

The CNX Nifty is currently trading at 8552.75, up by 120.75 points or 1.43% after trading in a range of 8512.90 and 8560.10. There were 46 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 8.05%, Cipla up by 6.27%, Hindalco up by 5.80%, Bank of Baroda up by 4.89% and SBI up by 4.19%. On the flip side, Asian Paints down by 1.61%, HDFC down by 1.08%, Infosys down by 0.77%, HCL Tech down by 0.36% and Lupin down by 0.04% were the top losers.

All the Asian markets were trading in green; FTSE Bursa Malaysia KLCI gained 11.67 points or 0.71% to 1,659.29, KOSPI Index soared 35.53 points or 1.81% to 1,993.91, Shanghai Composite surged 35.75 points or 1.14% to 3,164.12, Jakarta Composite increased 51.76 points or 0.96% to 5,466.08, Taiwan Weighted zoomed 224.99 points or 2.52% to 9,168.19, Hang Seng added 415.49 points or 1.85% to 22,830.68 and Nikkei 225 was up by 973.86 points or 5.99% to 17,225.40.