Benchmarks trade jubilantly; hit all-time highs in early deals

Indian equity benchmarks made a gap-up opening and are trading jubilantly in early deals, with frontline gauges surpassing their crucial 38,600 (Sensex) and 11,650 (Nifty) levels for the first time ever. Traders took some support with report that former Niti Aayog vice-chairman Arvind Panagariya opined that rupee depreciation was long overdue, saying appreciated currency had hurt the country’s exports. He further said India’s macroeconomic management is sound and there was no reason to worry. Besides, the government is looking to complete nearly three-fourths of its disinvestment target by the end of December and has a pipeline of about 15 companies in which it will sell stakes to achieve this interim goal.

Global cues too remained supportive with all the Asian counters rallying at this point of time taking support from Wall Street’s gains on Friday. The US markets rose on Friday, supported by remarks by Federal Reserve Chairman Jerome Powell, who said that a gradual process of interest rate increases remains appropriate as the US economy heats up and the labor market tightens.

Back home, real estate related stocks edged higher despite ICRA’s report that the adoption of new accounting standard IndAS has dented the net-worth of nine major listed real estate firms by 18% and revenues by 23.6% sequentially in June quarter. In scrip specific developments, Bajaj Finance strengthened on raising Rs 31 crore through private placement and Infosys gained on fixing record date for 1:1 bonus.

The BSE Sensex is currently trading at 38609.00, up by 357.20 points or 0.93% after trading in a range of 38416.73 and 38610.22. There were 30 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.58%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were Bankex up by 1.35%, Metal up by 1.30%, Power up by 1.25%, Utilities up by 1.23% and PSU was up by 1.08%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Power Grid Corporation up by 2.80%, Yes Bank up by 2.20%, SBI up by 1.83%, ICICI Bank up by 1.54% and Bharti Airtel up by 1.49%. On the flip side, Wipro down by 0.19% was the lone loser.

Meanwhile, Former Niti Aayog vice-chairman Arvind Panagariya has said that Rupee depreciation is not cause to worry and it was pending for a long time. He also said India’s macroeconomic management is sound. He further said that the country’s export has suffered losses due to appreciation in exchange rates.

Panagariya said ‘I am personally very pleased the Reserve Bank of India (RBI) has used our foreign exchange reserves prudently in managing the exchange rate’. Besides, the rupee on August 16 slumped to a life-time low of 70.32 to the US dollar on strong demand for the greenback. The rupee on August 24 staged a good recovery to end higher by 20 paise at 69.91 against the US currency.

Expressing optimism over the growth of India economy growth, the former Niti Aayog vice chairman said that he expects the country’s growth rate to cross the 8% mark by the third or fourth quarter of fiscal 2018-19. He said ‘I am confident that in less than ten years we will cross the UK, Germany and Japan to become the third largest economy in the world’.

On the possibilities of populist measures being announced by the Modi government ahead of 2019 general elections, he said that the risk is omnipresent ‘but I do not see this happening’. He said the government has more or less announced its revenue and expenditure trajectories. He also pointed out that Foreign Direct Investments (FDI) in India in 2017-18 has been slightly higher than in 2016-17 and 70% higher than in 2013-14.

The CNX Nifty is currently trading at 11655.65, up by 98.55 points or 0.85% after trading in a range of 11595.60 and 11659.95. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.80%, Power Grid Corporation up by 2.70%, Yes Bank up by 2.23%, Tech Mahindra up by 1.84% and Hindalco up by 1.73%. On the flip side, Bharti Infratel down by 0.75%, Dr. Reddys Lab down by 0.63%, Zee Entertainment down by 0.36%, Eicher Motors down by 0.04% and Cipla down by 0.03% were the top losers.

All the Asian markets are trading in green; Nikkei 225 surged 195.20 points or 0.86% to 22,796.97, Taiwan Weighted increased 84.01 points or 0.77% to 10,893.36, Straits Times jumped 21.30 points or 0.66% to 3,234.30, Jakarta Composite gained 44.99 points or 0.75% to 6,013.74, Hang Seng soared 571.22 points or 2.02% to 28,243.09, KOSPI added 7.07 points or 0.31% to 2,300.28 and Shanghai Composite was up by 38.97 points or 1.41% to 2,768.40.