Benchmarks soar to day’s high on sustained buying activities

Making further headway in green, Indian equity markets have now escalated to day’s highest point on sustained buying activities by funds and retail investors in the backdrop of positive global set-up. Further, recovery of Indian currency in absence of strong dollar demand from banks and importers, is also adding to the optimistic milieu. In across-the-board rally, both Sensex and Nifty, scooping up gains of over a percent and half, are oscillating above the crucial 18,900 and 5,550 levels respectively. Meanwhile, broader indices, too prolonging its gaining spree, are trading with gains of over a percent.

On the global front, getting positive overhand from Asian counterparts, European markets are trading higher on Monday as the U.S. delays a possible military strike against Syria, calming investor fears over another Middle Eastern conflict. On Sunday, President Barack Obama and his top aides launched a full-scale political offensive to persuade Congress to approve a military strike against Syria, but faced a struggle to win over skeptical lawmakers from both parties

Closer home, amidst the broad-based rally, stocks from Fast Moving Consumer Goods, Metal and Consumer Durables are outperforming the rest of the sectoral peers. Meanwhile, Oil marketing companies stocks too have rallied after the fuel price hike. PSU OMCs hiked petrol price by Rs 2.35 per litre on falling rupee and firming international oil prices. Meanwhile, diesel price too have been hiked by 50 paise. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1238:688; while 109 shares remained unchanged.

The BSE Sensex is currently trading at 18909.45, up by 289.73 points or 1.56% after trading in a range of 18912.78 and 18678.93. There were only 24 stocks advancing against 6 declines on the index.

The broader indices too rallied further; the BSE Mid cap and Small cap indexes were trading higher by 1.27% and 1.07% respectively.

All sectoral indices were trading higher on BSE with FMCG up by 3.46%, Metal up by 2.76%, Consumer Durables up by 2.06%, Realty up by 1.82% and Oil & Gas up by 1.81%.

The top gainers on the Sensex were, Tata Steel up by 3.96%, ITC up by 3.85%, Jindal Steel up by 3.65%, ICICI Bank up by 2.92% and HDFC up by 2.79%. On the flip side, Mahindra and Mahindra down by 2.62%, Tata Power down by 1.65%, NTPC down by 0.50%, Dr Reddy’s Lab down by 0.49% and HDFC Bank down by 0.09%, were the top losers on the Sensex.

Meanwhile, the International Monetary Fund (IMF) said that India's large fiscal and current account deficits (CAD) have impacted market confidence. In the previous fiscal, India’s CAD widened to a record high of 4.8 percent of GDP, while, fiscal deficit stood at 4.89 percent of the country’s GDP.

IMF said that high and persistent inflation, sizable un-hedged corporate foreign borrowing and reliance on portfolio inflows are longstanding vulnerabilities that have now been elevated as global liquidity conditions tighten, and thus clearly affecting the investors’ confidence. Overseas investors have pulled out nearly $2.5 billion from the Indian capital markets in August. Meanwhile, in June, Foreign Institutional Investors (FIIs) had pulled out a record $ 7.5 billion from the Indian capital markets.

By adding further, IMF said that Indian economy is also battling with depreciating rupee, which has dropped over 23 percent since April and had recently touched a low of 68.80 to a dollar. The current economic situation of the country presents a challenge to the government, but also reflects an opportunity for it to continue with its policy efforts on a variety of fronts, it added. In the April to June quarter of current fiscal, the country’s economic growth slowed down to 4.4 percent, lowest in four years

The CNX Nifty is currently trading at 5,554.25, up by 82.45 points or 1.51% after trading in a range of 5,555.25 and 5,478.85. There were 40 stocks advancing against 10 declines on the index.

The top gainers of the Nifty were Indusind Bank up by 5.84%, JP Associates up by 5.59%, Axis Bank up by 4.60%, Ranbaxy up by 4.30% and Tata Steel up by 4.00%. On the flip side, M&M down by 2.88%, Tata Power down by 2.11%, ACC down by 1.03%, kotak Bank down by 0.88% and NTPC down by 0.61% were the major losers on the index.

The Asian equity indices were trading in mixed; Straits Times up by 0.76%, Taiwan Weighted up by 0.21%, Shanghai Composite up by 0.05%, Hang Seng up by 2.01% and Nikkei 225 was up by 1.37%. While, KLSE Composite down by 0.55%, Seoul Composite down by 0.08% and Jakarta Composite down by 2.09%.

European markets got off to a positive start; with CAC 40 gaining 1.57%, DAX rising by 1.40% and FTSE 100 advancing by 0.06%.