Markets trade in fine fettle on widespread buying activities on F&O expiry session

Local equity markets continue to trade in fine fettle in late morning deals on widespread buying activities by funds and retail investors on the back of encouraging Q4 earnings by blue-chip companies, covering-up of pending outstanding short positions by speculators on the last session of April month expiry in the Derivatives segment. Continuing its record-breaking spree, while Sensex was trading above the crucial 22,850 level, Nifty hovered above the crucial 6800 bastion, with gains of close to half a percent. Meanwhile, broader indices also following suite are up with gains in the range of 0.25%-0.55%.

On the global front, Asian markets were down and out in red despite overnight rally at Wall Street and provisional report which showed a slight improvement in Chinese manufacturing activity this month. HSBC said its preliminary purchasing managers index (PMI) for China came in at 48.3 in April, up from 48.0 in March. While the figures points to a continuing contraction in manufacturing activity in the Asian economic giant, the rate has slowed.

Closer home, the broad-based rally at Dalal Street was led by stocks belonging from Capital Goods, Healthcare and Oil & Gas counters, while those from Realty and power counters were the only losers on BSE sector index. Gains in Oil & Gas pivotal was yet again led by Reliance Industries stocks, which inched up after the company signed loan co-financed by JBIC and Japanese banks backed by Nippon Export and Investment Insurance for up to $550 million. On the flip side, power stock witnessed massive drubbing after Appellate Tribunal (APTEL) issued notices to Central Electricity Regulatory Commission (CERC), Tata Power and Adani Power on NGO, Energy Watchdog's plea. Energy regulator moved Appellate against the CERC order which allowed Rs 1,200 crore compensatory tariff to two Mundra Projects of Tata Power and Adani Power in February this year. The market breadth on BSE was positive, out of 2052 stocks traded, 1216 stocks advanced, while 746 stocks declined on the BSE.

The BSE Sensex is currently trading at 22859.13 up by 100.76 points or 0.44% after trading in a range of 22875.17 and 22780.13. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.33%, while Small cap index up by 0.53%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 0.99%, Healthcare up by 0.80%, Oil & Gas up by 0.62%, PSU up by 0.59% and Teck up by 0.55%, while Realty down by 0.74% and Power down by 0.17% were the only losers on the sectoral index.

The top gainers on the Sensex were Axis Bank up by 1.66%, Sun Pharma up by 1.60%, Gail India up by 1.48%, L&T up by 1.45% and BHEL up by 1.42%. On the flip side, NTPC down by 0.73%, HDFC down by 0.63%, Tata Motors down by 0.44%, Hindalco down by 0.24% and SSLT down by 0.21%.

Meanwhile, the Reserve Bank of India (RBI) has barred companies from repaying rupee loans taken from the domestic banking system via funds raised through external commercial borrowings (ECBs) from foreign branches of Indian banks. It has done so by restricting non-fund based credit facilities-guarantees, stand-by letters of credit, letters of comfort, and so on, which up-till now were extended by banks to Indian companies’ overseas arms.

The RBI has barred banks, including their overseas branches/subsidiaries, from issuing non-fund based credit facilities on behalf of overseas arms of local companies for the purpose of raising loans/advances of any kind from other entities except in connection with the ordinary course of overseas business.

This development came right after RBI found that banks were extending non-fund based credit on behalf of Indian companies’ overseas arms for purposes which were not connected with their business and rather it was found that this credit was used to get foreign currency loans for repaying rupee loans.

Besides, the central bank also has asked exporter-borrowers to desist from the practice of using export advances, received on the strength of guarantees issued by Indian banks, for repayment of loans taken from Indian banks. According to RBI, this practice is a clear violation of its instructions except in cases where banks have given approval under the Foreign Exchange Management Act.

The CNX Nifty is currently trading at 6,837.85 up by 22.50 points or 0.33% after trading in a range of 6,861.60 and 6,820.75. There were 33 stocks advancing against 17 declining on the index.

The top gainers of the Nifty were Axis Bank up by 1.71%, Sun Pharma up by 1.54%, Kotak Bank up by 1.44%, Bharti Airtel up by 1.42% and L&T up by 1.35%. On the flip side, DLF down by 2.42%, HDFC down by 0.85%, IndusInd Bank down by 0.82%, UltraTech Cement down by 0.78% and NTPC down by 0.65% were the top losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite dropped 0.45%, Hang Seng declined by 0.71%, Jakarta Composite contracted 0.15%, KLSE Composite dipped by 0.01%, Straits Times decreased 0.59%, Seoul Composite crumbled by 0.12% and Taiwan Weighted was down by 0.17%. On the flip side, Nikkei 225 was up by 0.77%.