Markets continue firm trade in afternoon session

Indian bourses were trading near intra-day high level in afternoon session supported by firm buying witnessed in capital goods, infra, PSU and Oil and Gas stocks. Sentiments got a boost after Prime Minister Narendra Modi, in his Independence speech, presented government’s business-friendly side and invited global businesses to make India their manufacturing base. Almost all sectoral indices on BSE were trading in green territory with capital goods as the top gaining index up by around 2.26% followed by infra and PSU stocks both trading up by over 1.50. Buying was broad based with both mid and small cap indices were trading up by over 1.30%. Market sentiments also got some support as the government stated that in order to improve ease of doing business in the country, it has been taking a series of steps that include introduction of e-Biz project for single window clearance among others. Shares of oil and gas, including oil marketing companies were trading higher by up to 4% on the bourses due to decline in Brent crude oil price. However, FMCG and IT stocks were trading in negative territory.

Cox and Kings has surged around 5% to Rs 279 after reporting 27% yoy jump in consolidated operating profit at Rs 351 crore for Q1 FY15. Tata Motors, extending its rally on the bourses has rallied around 2% to Rs 495 on back of strong sales of luxury Jaguar and Land Rover (JLR).

On global front, Asian equity indices were trading mixed with Jakarta Composite up by 0.15% and Hang Seng down 0.33%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,800 and 26,000 levels respectively. The market breadth on BSE was positive, out of 2,544 stocks traded, 1,629 stocks advanced, while 817 stocks declined on the BSE.

The BSE Sensex is currently trading at 26232.67, up by 129.44 points or 0.50% after trading in a range of 26075.28 and 26236.06. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.37%, while Small cap index up by 1.69%.

The gaining sectoral indices on the BSE were Capital Goods up by 2.26%, Infra up by 1.62%, PSU up by 1.56%, Oil & Gas up by 1.50% and Consumer Durables up by 1.48%. While, FMCG down by 1.05% and IT down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 2.87%, Tata Motors up by 2.82%, BHEL up by 2.23%, Larsen & Toubro up by 2.19% and Axis Bank up by 2.10%. On the flip side, ITC down by 2.49%, Infosys down by 0.93%, HDFC down by 0.88%, Mahindra & Mahindra down by 0.56% and Hero MotoCorp down by 0.17% were the top losers.

Meanwhile, concerned over the rising subsidy bill, Finance Minister Arun Jailtley has stated that ballooning subsidy bill needs to be lowered by rationalising the populist measures. Finance Minister added that government should not be doling out pre-poll populist measures that increase the subsidy bill and destroy economic growth.

After touching a low of under 2.5 percent of GDP in FY07, the government borrowings have been on a continuous upward spiral which pushed up the subsidy bill to over 2 percent of the GDP as of FY14. The rising subsidy bill has pushed the fiscal deficit to 4.5 percent last fiscal and this year the government has pegged it at 4.1 percent of the GDP or Rs 5.31 lakh crore.

On tax front, Finance Minister asserted that the government is not in favor of high tax regime, but at this juncture high government revenue is required to promote the business in the country. Currently, country needs investment for better economic growth which in turn will lead to job creation and higher revenue for the government.

Government’s revenue collection has been remained under pressure due to the prevailing economic slowdown. Tax collection is the major source of revenue for the government. In the previous fiscal year, tax collection fell short of target by a whopping Rs 77,000 crore as the government collected Rs 11.58 lakh crore against the budget estimate of Rs 12.35 lakh crore. The government estimated to garner Rs 13.64 lakh crore from both direct and indirect tax collection during the current fiscal. 

The CNX Nifty is currently trading at 7830.10, up by 38.40 points or 0.49% after trading in a range of 7779.20 and 7832.75. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were BPCL up by 4.18%, Tata Power up by 3.09%, Tata Motors up by 2.87%, BHEL up by 2.21% and Larsen & Toubro up by 2.09%. On the flip side, ITC down by 2.52%, Infosys down by 1.05%, HDFC down by 0.86%, United Spirits down by 0.65% and Mahindra & Mahindra down by 0.64% were the top losers.

Asian equity indices were trading mixed; Shanghai Composite up by 6.48 points or 0.29% to 2,233.21, Nikkei 225 up by 7.72 points or 0.05% to 15,326.06, Jakarta Composite up by 7.84 points or 0.15% to 5,156.80. On the flip side, Hang Seng down 81.59 points or 0.33% to 24,873.35 Taiwan Weighted down 65.5 points or 0.71% to 9,141.31 and Straits Times down11.14 points or 0.34% to 3,303.63