Benchmarks trade jubilantly in early deals; Sensex surpasses 28,400 mark

Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals on Monday, with key gauges surpassing their crucial 28,400 (Sensex) and 8,750 (Nifty) levels. Sentiments remained upbeat on expectations of a rate cut by Reserve Bank of India (RBI) in its policy meeting on February 8. Traders took some encouragement with Economic Affairs Secretary Shaktikanta Das’ statement expressing confidence that the economy will grow upwards of 7 per cent next fiscal. He reiterated that there will be transient impact of demonetisation on the economy, but it will not spill over to the next fiscal.

Global cues too remained supportive with most of the Asian counters trading in green at this point of time led by banks after the Trump administration planned to roll back financial regulations. The US markets ended higher in the last session, supported by upbeat jobs data and the Dow climbed back above 20,000 and the Nasdaq reached a new record closing high.

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. On the sectoral front, steel stocks remained on buyers’ radar, as the Steel Minister Chaudhary Birendra Singh has said that the industry must gear up to face global competition as protectionist measures like minimum import price (MIP) and anti-dumping cannot continue indefinitely. Financial stocks too remained in focus, on the reports that the government is likely to introduce a Bill for resolution of insolvent financial firms during the current session of Parliament in order to address the bankruptcy issue in the financial sector.

The market breadth remained in favor of advances, as there were 1,578 shares on the gaining side against 519 shares on the losing side while 103 shares remain unchanged.

The BSE Sensex is currently trading at 28410.56, up by 170.04 points or 0.60% after trading in a range of 28340.39 and 28477.30. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.64%, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were Realty up by 1.95%, Bankex up by 1.17%, Capital Goods up by 1.03%, Power up by 1.01% and Consumer Durables was up by 0.94%, while IT down by 0.18% and TECK was down by 0.13% were the only losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.35%, Hero MotoCorp up by 1.46%, Axis Bank up by 1.19%, NTPC up by 1.19% and SBI was up by 1.15%. On the flip side, Dr. Reddy’s Lab down by 2.33%, Coal India down by 0.71%, Infosys down by 0.25%, Mahindra & Mahindra down by 0.23% and Bajaj Auto was down by 0.07% were the top losers.

Meanwhile, in order to provide additional hedging products for Non-Residents Indians (NRIs), the Reserve Bank of India (RBI) has allowed NRIs access to the exchange traded currency derivatives (ETCD) market to hedge currency risk arising out of their investments in India under Foreign Exchange Management Act (FEMA), 1999. Under current regulations, NRIs are permitted to hedge their rupee currency risk through over the counter (OTC) transactions with banks authorised to deal in foreign exchange.

As per RBI notification, NRIs may take positions in the currency futures/exchange traded options market to hedge the currency risk on the market value of their permissible (under FEMA, 1999) rupee investments in debt and equity and dividend due and balances held in NRE accounts. RBI added that the access to ETCD will be subject to certain conditions. Also, NRIs will have to designate bank for the purpose of monitoring and reporting their combined positions in the OTC and ETCD segments.

The central bank specified that the responsibility of ensuring the existence of the underlying exposure rests with the NRI. It also said that if the magnitude of exposure through the hedge transactions exceeds the magnitude of underlying exposure, the concerned NRI shall be liable to such penal action as may be taken by Reserve Bank of India under the FEMA.

The CNX Nifty is currently trading at 8793.45, up by 52.50 points or 0.60% after trading in a range of 8779.85 and 8809.10. There were 39 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.60%, ICICI Bank up by 2.33%, Ambuja Cement up by 2.07%, Bank of Baroda up by 1.88% and Indusind Bank was up by 1.67%. On the flip side, Dr. Reddy’s Lab down by 2.46%, Idea Cellular down by 1.46%, HCL Tech down by 1.16%, Tech Mahindra down by 0.92% and Aurobindo Pharma was down by 0.79% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 2.18 points or 0.13% to 1,687.19, KOSPI Index gained 5.07 points or 0.24% to 2,078.23, Shanghai Composite increased 14.61 points or 0.47% to 3,154.78, Jakarta Composite jumped 20.92 points or 0.39% to 5,381.69, Taiwan Weighted added 79.67 points or 0.84% to 9,535.23 and Hang Seng was up by 143.67 points or 0.62% to 23,272.88.

On the flip side, Nikkei 225 was down by 1.53 points or 0.01% to 18,916.67.