Benchmarks trade with traction in early deals; Sensex surpasses 26,500 mark

Extending their previous sessions’ jubilation, Indian equity benchmarks have made a positive start and are trading with traction in early deals on Monday with Nifty and Sensex touching fresh record high on sustained buying by foreign investors. The foreign portfolio investors bought shares worth a net Rs 302 crore on August 22, as per provisional data from the stock exchanges. Sentiments also remained up-beat after Finance Minister Arun Jaitley underscored that there would be huge opportunities for the corporate sector to invest once the country reached the take-off stage of economic advancement. However, gains remained capped as some cautiousness crept in after latest RBI report stating that foreign direct investment inflows into India have fallen sharply from $23.47 billion in 2011-12 to $18.29 billion in 2012-13 and further to $16.05 billion in 2013-14.

On the global front, the US markets made a mixed closing in last session; however geo-political worries related to Ukraine-Russia kept lingering, with NATO expressing alarm at a buildup of Russian troops on the border with Ukraine. The Asian markets too were trading mixed at this point of time considering Fed Chair Janet Yellen comments less dovish than expected and on renewed tensions from Ukraine.

Back home, on the sectoral front, banking, consumer durables and auto witnessed the maximum gain in trade, while metal, realty and infrastructure remained the few losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1316 shares on the gaining side against 98 shares on the losing side while 827 shares remain unchanged.

The BSE Sensex opened at 26490.31; around 71 points higher as compared to its previous closing of 26419.55, and has touched a high and a low of 26582.27 and 26490.31 respectively. The BSE Sensex is currently trading at 26555.70, up by 136.15 points or 0.52%. There were 19 stocks advancing against 11 stocks declining on the index.

The overall market breadth remained in the favour of advances with 58.72% stocks advancing against 36.90% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index up by 0.57%.

The gaining sectoral indices on the BSE were Bankex up by 0.79%, Consumer Durables up by 0.76%, Auto up by 0.62%, Capital Goods up by 0.50% and Oil & Gas was up by 0.34% while, Metal down by 0.77%, Realty down by 0.33% and Infrastructure was down by 0.20% were the few losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.79%, SBI up by 1.84%, Maruti Suzuki up by 1.39%, Mahindra & Mahindra up by 1.34% and Sun Pharma Industries was up by 1.31%. On the flip side, Sesa Sterlite down by 0.91%, Hindalco down by 0.82%, Tata Power down by 0.80%, GAIL India down by 0.65% and Tata Steel was down by 0.59% were the top losers.

Meanwhile, with an aim to revive interest in oil and gas exploration by simplifying rules, the Oil Ministry is considering proposal to replace the controversial Production Sharing Contracts (PSC) with simpler revenue-sharing regime.

Earlier, a committee headed by Dr C Rangarajan had suggested moving to a revenue sharing regime under which companies bid upfront the quantity of oil and gas they will share with the government at different stages of production as well as at different rates for winning exploration acreage. The production levels for onland, shallow offshore and deepwater have been proposed at different tranches. Under model revenue sharing contract (MRSC), revenue to be shared with the government include all amounts accrued in relation to petroleum produced and saved in a month remaining after deducting royalty payments required to be made by the contractor, in the relevant month. Marketing margin charged by contractor shall be included to calculate this revenue. Oil Ministry sought comments by September 10 on MRSC. 

MRSC will replace the current practice of companies getting blocks by bidding maximum work programme and then recovering all of their investment before sharing profits with the government. Production sharing model was also criticized by the CAG saying that it encouraged companies to keep raising cost so as to postpone higher share of profits to the government.

The CNX Nifty opened at 7931.75; around 18 points higher as compared to its previous closing of 7,913.20, and has touched a high and a low of 7957.70 and 7927.75 respectively.

The CNX Nifty is currently trading at 7947.50, up by 34.30 points or 0.43%. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.86%, Indusind Bank up by 2.20%, SBI up by 1.89%, Kotak Mahindra Bank up by 1.72%, Sun Pharma Industries was up by 1.54%. On the flip side, Jindal Steel & Power down by 2.34%, United Spirits down by 1.47%, Hindalco down by 0.96%, Sesa Sterlite down by 0.94% and Tata Power was down by 0.91% were the top losers.

Asian markets were mixed; Nikkei 225 surged by 63.80 points or 0.41% to 15,602.99, KOSPI Index rose by 2.95 points or 0.14% to 2,059.65, Hang Seng added 118.13 points or 0.47% to 25,112.23 and Straits Times was up 12.94 points or 0.39% to 3,338.44.

On the flip side, Shanghai Composite tumbled by 10.95 points or 0.49% to 2,229.86, FTSE Bursa Malaysia KLCI declined by 7.76 points or 0.41% to 1,863.23, Taiwan Weighted dipped by 6.13 points or 0.07% to 9,373.97 and Jakarta Composite was down by 10.89 points or 0.21% to 5,188.00.