Indian equities continue to trade in green in late morning session

Indian equity markets were trading on a positive note in late morning session as investors continued to build positions across the counter. The frontline indices were trading with over half a percent gains and were hovering over the psychological 7,900 (Nifty) and 26,550 (Sensex) levels. The momentum is bullish, not only in large cap but also in mid and small cap too. Sentiment on the street improved as the Government had yesterday announced more reforms and recommended the promulgation of an ordinance to facilitate e-auction of coal blocks for private companies for captive use and allot mines directly to state and central PSUs. Also, there will be buzz in India Inc as the government has further extended the validity of industrial licences to as much as seven years from three, to encourage domestic manufacturing. Besides, revival of buying by foreign funds after remaining sellers for several sessions also supported the upside. The provisional data released by the stock exchanges after trading hours October 20, 2014, showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,040.08 crore on that day.

On the sectoral front, stocks from Infrastructure, Metal and Power counters were supporting the markets’ uptrend, while those from Oil & Gas and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, shares of BGR Energy Systems have surged after the company bagged orders worth Rs 250 crore in the electrical sub-stations segment of its electrical projects division. on the other hand, Zee media has declined after the company reported net loss of Rs 12.8 crore in the July-September quarter of 2015 fiscal compared to the net profit of Rs 4.27 crore in the same quarter last fiscal.

On global front, Asian share markets were mostly lower following a mixed morning session as investors digested a raft of key data from China. On the other hand, the US markets extended the uptrend on bargain hunting, with the Nasdaq and the S&P 500 closing higher for the third consecutive session. Back home, Indian rupee appreciated by 8 paise to 61.28 against the Greenback in early trade, extending gains for the third straight day, on sustained selling of the dollar by exporters and banks. The market breadth on BSE was positive, out of 2107 stocks traded, 1356 stocks advanced, while 675 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26590.16 up by 160.31 points or 0.61% after trading in a range of 26615.41 and 26472.96. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.07%, while Small cap index gained 0.79%.

The gaining sectoral indices on the BSE were Infrastructure up by 2.34%, Metal up by 2.13%, Power up by 2.11%, Realty up by 1.37% and Bankex up by 1.29%, while Oil & Gas down by 0.32% and FMCG down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 5.79%, GAIL India up by 4.41%, BHEL up by 3.29%, Hindalco up by 3.15% and NTPC up by 2.61%. On the flip side, Coal India down by 1.77%, ONGC down by 1.64%, ITC down by 0.74%, Mahindra & Mahindra down by 0.63% and Dr. Reddys Lab down by 0.51% were the top losers.

Meanwhile, in a big move towards coal sector reforms, the government has planned to issue an ordinance to facilitate e-auction of coal blocks for private companies and allot mines directly to state and central PSUs for captive use.

The new auction-based system will replace the earlier controversial policy of allotting coal blocks based on recommendations of a panel of bureaucrats, which the Supreme Court had struck down last month as arbitrary. The Supreme Court had last month quashed allocation of 214 coal blocks to various companies since 1993, a move which threatened a nascent economic recovery.

The government has cleared that auction process would be transparent and completed in three to four months and entire revenue generated from auction will be given to the state governments where the mines are located. The biggest beneficiaries would be the eastern states like Jharkhand, Odisha, West Bengal and Chhattisgarh.

Further, the government highlighted that any convicted company whose allocations were cancelled by the apex court would not be allowed to participate in the e-auction. At present, only steel, power and cement companies are allowed to own mines for their own use. Meanwhile, the government also stressed that in future it may allow commercial use of mines, a move that would enable private companies to get into trading coal and break the monopoly of public sector Coal India. Currently, CIL is only company allowed to sell coal and accounts for over 80 percent of the domestic production. 

The CNX Nifty is currently trading at 7,928.95 up by 49.55 points or 0.63% after trading in a range of 7,934.50 and 7,889.85. There were 35 stocks advancing against 15 declining on the index.

The top gainers on Nifty were Sesa Sterlite up by 6.25%, Jindal Steel & Power up by 6.05%, GAIL India up by 4.23%, IDFC up by 3.69% and BHEL up by 3.31%. On the flip side, Coal India down by 2.05%, ONGC down by 1.63%, Lupin down by 0.74%, ITC down by 0.71% and Mahindra & Mahindra down by 0.64% were the top losers.

Asian markets were trading mostly in the red; Nikkei 225 tumbled by 1.66%, Hang Seng dropped 0.25%, KOSPI Index eased 0.89%, Jakarta Composite contracted 0.39%, Shanghai Composite fell 0.35%, FTSE Bursa Malaysia KLCI declined by 0.21% and Taiwan Weighted was down by 0.08%. On the flip side, Straits Times was up by 0.21%.