Benchmarks trade in fine fettle in early deals

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Wednesday as investors opted to buy beaten-down but fundamentally strong stocks after two days of drubbing. Some support also came in with the report of Department of Industrial Policy and Promotion that foreign direct investment (FDI) flows into India more than doubled to $3.5 billion in July, compared to FDI worth $1.65 billion in July 2013. Also, the government has got a pat on its back by the international credit rating agency Crisil, which has said that efforts being taken by the Narendra Modi government to boost the real estate sector are in the ‘right direction’.

Global cues too remained supportive with the US markets ending higher in last session, coming out of their consolidation mood as traders looked ahead to the Federal Reserve's highly anticipated monetary policy announcement on Wednesday afternoon. Asian equity markets too were trading in the green at this point of time with some of the regional indices halting their losing streak. There was some support with report of China providing 500 billion yuan ($81.4 billion) of liquidity to its five biggest banks.

Back home, on the sectoral front, metal, oil and gas and software witnessed the maximum gains in trade, while capital goods, infrastructure and auto remained the top losers on the BSE sectoral space. The broader indices too were trading in the green, while the market breadth on the BSE was positive; there were 1084 shares on the gaining side against 995 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex opened at 26627.21; around 134 points higher as compared to its previous closing of 26492.51, and has touched a high and a low of 26655.65 and 26511.71 respectively. The BSE Sensex is currently trading at 26614.84, up by 122.33 points or 0.46%. There were 23 stocks advancing against 7 stocks declining on the index.

The overall market breadth remained in the favour of advances with 50.61% stocks advancing against 46.45% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.04%, while Small cap index up by 0.24%.

The gaining sectoral indices on the BSE were Metal up by 0.78%, Oil & Gas up by 0.67%, IT up by 0.66%, Realty up by 0.66% and TECK up by 0.61% while, Capital Goods down by 0.21%, Infrastructure down by 0.12% and Auto down by 0.08% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 1.85%, Hindalco up by 1.37%, Coal India up by 1.19%, Sun Pharma Industries up by 1.14% and Tata Steel up by 1.09%. On the flip side, Cipla down by 1.11%, Sesa Sterlite down by 0.74%, Tata Motors down by 0.73%, Larsen & Toubro down by 0.52% and Maruti Suzuki down by 0.30% were the top losers.

Meanwhile, in what could be termed as first step in the direction of ‘made in India’ concept announced by Prime Minister Narendra Modi, the government on Monday approved a Rs 930 crore scheme to enhance the competitiveness of the capital goods sector in order to boost the economy. The scheme on enhancement of competitiveness in the Indian capital goods sector which will be implemented in the 12th Plan period and spill over to the 13th Plan period, requires an estimated outlay of Rs 930.96 crore. However, the gross budgetary support (GBS) from the government for the scheme would be Rs 581.22 crore and the balance Rs 349.74 crore would be contributed by the stakeholder industries.

Further, the scheme would cover sub sectors like machine tools, textile machinery, construction and mining machinery, and process plant machinery. However, for the scheme to be implemented, issue of technological depth creation in the capital goods sector and creation of common industrial facility centres would have to be addressed.

The scheme basically has five components to be achieved including creation of advanced centres of excellence for R&D and technology development, integrated industrial infrastructure facilities or machine tool parks and setting up common engineering facility centre for textile machinery. It would also include testing and certification centre for earth moving machineries and setting up of a technology acquisition fund under the Technology Acquisition Fund Programme (TAFP) to help the capital goods industry to acquire and assimilate specific technologies.

Interestingly, the announcement of this scheme comes at a time when Prime Minister is keen to turn India into a manufacturing hub and would also give a fillip to capital goods production that contracted 3.8% in July this year. The sector however provides 9%-12% of the total manufacturing value added, while the consumption of capital goods constitutes a constant share of 17%-21% of the total gross domestic investment in the country.

The CNX Nifty opened at 7,971.50; around 39 points higher as compared to its previous closing of 7,932.90, and has touched a high and a low of 7,983.95 and 7,936.95 respectively.

The CNX Nifty is currently trading at 7968.70, up by 35.80 points or 0.45%. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were NMDC up by 2.59%, Tata Power up by 2.03%, Cairn India up by 1.67%, Hindalco up by 1.34% and Sun Pharma Industries up by 1.27%. On the flip side, Cipla down by 1.24%, Power Grid Corporation down by 0.81%, Tata Motors down by 0.75%, Lupin down by 0.70% and Sesa Sterlite down by 0.68% were the top losers.

Asian markets were trading mostly in the green. Straits Times was increased 18.54 points or 0.57% to 3,291.16, Nikkei 225 rose by 18.00 points or 0.11 % to 15,929.53, Jakarta Composite surged by 55.06 points or 1.07% to 5,185.56, Hang Seng gained by 259.06 points or 1.07% to 24,395.07, KOSPI Index jumped by 15.29 points or 0.75% to 2,058.21 and Taiwan Weighted was up by 102.26 points or 1.12% to 9,235.66.

On the flip side FTSE Bursa Malaysia KLCI declined by 2.81 points or 0.15% to 1,844.49 and Shanghai Composite was down by 4.14 points or 0.18% to 2,292.41.