Benchmarks make gap-up opening; Sensex reclaims 30,000 mark

Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals on Thursday, with Sensex recapturing its crucial 30,000 level and Nifty inching towards its crucial 9,350 mark. Sentiments remained up-beat with Asian Development Bank’s report that the Indian economy will grow 7.4 per cent this fiscal and 7.6 per cent in the next as the bankruptcy and GST laws will help create a more business-friendly environment. Traders shrugged off reports that the Fed have maintained status quo on policy rate but downplayed weak first quarter economic growth, indicating a further rate hike. Buying in banking counter too aided sentiments as the Union Cabinet cleared an ordinance to empower the Reserve Bank of India (RBI) to reduce bad debts of public sector banks. The ordinance will empower the Reserve Bank to effectively deal with the problem of mounting bad loans in the banking sector.

On the global front, Asian counters were exhibiting mixed trend at this point of time, taking cues from the US markets, with traders in the region now pricing in a 72 per cent chance of a June rate hike, from 63 per cent before the Fed's statement. The US markets after remaining in negative territory for most of the session made a mixed closing in the last session. 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 favour of advances, as there were 1,335 shares on the gaining side against 709 shares on the losing side while 87 shares remain unchanged.

The BSE Sensex is currently trading at 30060.81, up by 166.01 points or 0.56% after trading in a range of 30027.41 and 30098.82. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.47%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Bankex up by 1.54%, Consumer Durables up by 0.90%, Capital Goods up by 0.84%, PSU up by 0.55% and Power up by 0.49%, while Metal down by 0.44%, IT down by 0.24%, Oil & Gas down by 0.17%, TECK down by 0.15% and Auto down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 7.63%, SBI up by 1.87%, Adani Ports up by 1.86%, Hindustan Unilever up by 1.22% and Axis Bank up by 1.08%. On the flip side, Tata Motors down by 0.75%, Cipla down by 0.75%, HDFC Bank down by 0.64%, TCS down by 0.55% and Mahindra & Mahindra down by 0.39% were the top losers.

Meanwhile, the Asian Development Bank (ADB) has said that the Indian economy will grow 7.4 percent in the fiscal year 2017-18 and 7.6 percent in fiscal year 2018-19, with the help of bankruptcy and GST laws, creating more business friendly environment.

The multilateral agency's Chief Economist Yasuyuki Sawada said over 7 percent growth rate is high if one compare it to other emerging market economies and also China. Behind this is cyclical factor, improved terms of trade. The Indian government adopted new bankruptcy law that improved the business enabling environment and that is the short-term and medium-term factor behind the gross acceleration in India. He added that the bankruptcy law and the GST will help in creating a better business enabling environment, which seems to be a factor behind this gross acceleration of India.

On strengthening rupee hitting exports, he said that stronger rupee is unlikely to impact India’s export competitiveness and growth momentum and Asian economies, including India, may not be adversely affected by noises of protectionism in the developed countries due to rising intra-Asian trade. He further said the rupee's strengthening should not be seen in isolation since market environment is another determinant of exports.

Talking about demonetisation of old 500 and 1,000 rupee notes that took out 86 per cent of the currency in circulation, he said that the move obviously generated short-term decline in cash-based transactions and consumer sentiment. But according to their data analysis, this possible negative impact of demonetisation was only short-lived and we still see a medium-term growth acceleration of the Indian economy.

The CNX Nifty is currently trading at 9344.80, up by 32.85 points or 0.35% after trading in a range of 9341.25 and 9361.40. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 7.63%, Adani Ports up by 1.97%, Bank of Baroda up by 1.74%, SBI up by 1.71% and Hindustan Unilever up by 1.36%. On the flip side, Hindalco down by 1.24%, Cipla down by 1.06%, Indusind Bank down by 0.99%, Indian Oil Corporation down by 0.95% and BPCL down by 0.92% were the top losers.

Asian markets were trading mixed; Taiwan Weighted rose 5.35 points or 0.05% to 9,960.68, Jakarta Composite gained 10.66 points or 0.19% to 5,658.03 and KOSPI Index increased 15.84 points or 0.71% to 2,235.51.

On the flip side, Hang Seng decreased 130.49 points or 0.53% to 24,565.64, FTSE Bursa Malaysia KLCI shed 15 points or 0.85% to 1,757.51 and Shanghai Composite was down by 2.14 points or 0.07% to 3,133.21.