Benchmarks trade jubilantly on early deals; Sensex reclaims 31,500

Indian equity benchmarks have made a gap-up opening and are trading in green in early deals on Tuesday, with frontline gauges recapturing their crucial 31,500 (Sensex) and 9,850 (Nifty) levels, ahead of RBI’s Monetary Policy Committee (MPC) meeting starting today. Traders took some encouragement with Finance Minister FM Arun Jaitley’s indication that the government would consider reducing the goods and services tax slabs and easing compliance burden for small taxpayers once revenues from GST better those from the previous tax regime. Some support also came after Industry body Assocham has urged the government to relax fiscal deficit targets and boost public expenditure as a means to accelerate India’s economic growth, which slipped to 5.7 percent in the June quarter.

Global cues too remained supportive with Asian markets rallying at this point of time, as the US manufacturing report has bolstered optimism on economic growth and the Japanese market is heading for its highest close in more than two years on weaker yen. Continuing their upmove to the new week, the US markets extended their gains in last session.

Back home, former RBI Governor C Rangarajan has said that the government needs to “pick up very fast” to be able to maintain a healthy annual growth. Meanwhile, SBI Life Insurance Company made a decent debut on the bourses with a gain of around 5%. The Rs 8,400 crore IPO was subscribed 3.58 times.

The BSE Sensex is currently trading at 31508.88, up by 225.16 points or 0.72% after trading in a range of 31440.48 and 31615.28. There were 27 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 0.89%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.70%, Auto up by 1.62%, Metal up by 1.37%, Energy up by 1.26% and Industrials was up by 1.23%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Tata Motors - DVR up by 5.28%, Tata Motors up by 4.70%, Bajaj Auto up by 3.01%, Mahindra & Mahindra up by 1.89% and Asian Paints up by 1.88%. On the flip side, Power Grid down by 1.31%, Maruti Suzuki down by 0.57%, SBI down by 0.30% and Kotak Mahindra Bank down by 0.28% were the few losers.

Meanwhile, raising its concern over the sluggishness of the Indian economy, industry body Assocham has urged the government to relax fiscal deficit targets and boost public expenditure as a means to accelerate India's economic growth. The chamber said India Inc is looking up to the government to take the ‘out of ordinary’ measures, citing “concerns over slowdown in growth due to the transient disruptions in the economy following GST implementation and the remaining over-hang of demonetization”.

Assocham Secretary General D S Rawat said that the fiscal targets can be taken to 3.7 per cent, but with a strict oversight over quality of expenditure so that the extra resources are wisely spent in building and reviving investment in infrastructure sectors like roads, power, railways, ports. He also said that present economic scenario requires immediate intervention of the government so that any disruptive impact of the Goods and Services Tax (GST) is minimised.

The Industry body has also written to the Reserve Bank of India (RBI) and the Monetary Policy Committee (MPC) to cut the interest rates by at least by 25 basis points, outlining the challenges faced by the economy which needs immediate measures for revival of growth. It said that economy is facing multiple challenges as growth is slowing down and investment is not picking up. Consumers have cut down on spending and businesses have also lost momentum' and the RBI should target the real effective exchange rate more effectively, as the effective exchange rate of the rupee has appreciated against India's trading partners, hitting the country's exports.

The CNX Nifty is currently trading at 9850.20, up by 61.60 points or 0.63% after trading in a range of 9832.60 and 9895.40. There were 40 stocks advancing against 10 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Tata Motors up by 4.61%, GAIL India up by 3.81%, Bajaj Auto up by 2.95%, Bharti Infratel up by 2.48% and Indiabulls Housing up by 2.18%. On the flip side, Power Grid down by 1.54%, Maruti Suzuki down by 0.70%, Yes Bank down by 0.54%, SBI down by 0.30% and Kotak Mahindra Bank down by 0.28% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 2.24 points or 0.13% to 1,757.02, Taiwan Weighted gained 7.52 points or 0.07% to 10,472.68, Jakarta Composite added 16.03 points or 0.27% to 5,930.06, Nikkei 225 increased 185.09 points or 0.91% to 20,585.87 and Hang Seng was up by 449.5 points or 1.63% to 28,003.80.