Markets continue to trade in green as govt steps up reforms

Indian bourses continued to trade in green in the afternoon session as buying momentum in the equities persisted, however the gains were capped and marginal downfall from day's high levels was seen as selling appeared in FMCG, IT and oil and gas stocks. Though, most of the sectoral indices were trading in green with infra as a top gaining index up by around 2.25%. Continued buying by funds and investors after the Government had yesterday announced more reforms and planned to issue an ordinance to facilitate e-auction of coal blocks for private companies for captive use influenced the trading sentiment. Besides, revival of buying by foreign funds after remaining sellers for the past few sessions also provided support to the domestic benchmarks. Further, the government’s latest announcement to increase the validity of industrial licences to seven years from the existing validity period of three years also added to the optimistic sentiments. Buying was broad based with both small cap and mid cap indices trading up by over 0.55%.

Stone India has surged 13% to Rs 50 after the company said it received first export order from China. Shares of two-wheeler maker TVS Motor Company were trading higher by 3% at Rs 253, extending its 9% rally in past two days after the company said the foreign institutional investors (FIIs) stake in the company touches nine year high during September 2014 quarter.

On global front, Asian markets were trading in red with Nikkei 225 down 1.95% to and Jakarta Composite down 0.39%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,850 and 26,000 levels respectively. The market breadth on BSE was positive, out of 2,393 stocks traded, 1,379 stocks advanced, while 914 stocks declined on the BSE.

The BSE Sensex is currently trading at 26484.96, up by 55.11 points or 0.21% after trading in a range of 26472.96 and 26615.41. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.80%, while Small cap index up by 0.55%.

The gaining sectoral indices on the BSE were INFRA up by 2.25%, Power up by 1.63%, Metal up by 1.38%, Realty up by 1.22% and Consumer Durables up by 1.08%. On the other hand, Oil & Gas down by 0.66%, FMCG down by 0.26% and IT down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 4.21%, Sesa Sterlite up by 4.10%, BHEL up by 3.34%, Bharti Airtel up by 2.86% and Hindalco up by 2.09%. On the flip side, Coal India down by 2.13%, ONGC down by 2.02%, Mahindra & Mahindra down by 1.65%, ITC down by 0.82% and Sun Pharma Inds down by 0.82% were the top losers.

Meanwhile, With an aim to boost manufacturing sector in the country, the Government has increased the validity of industrial licences to seven years from the existing validity period of three years. The Department of Industrial Policy & Promotion (DIPP) notified that as a measure of 'ease of doing business', two extensions of two years each in the initial validity of three years of industrial licence shall be allowed up to seven years. The government is currently working to promote India as a manufacturing hub with Make in India’ campaign, aimed at ensuring investor-friendly environment for businessmen in the country.

Furthermore, the DIPP also decided to deregulate the annual capacity for defence items for industrial licence to encourage more companies to enter the sector and allow manufacturers to scale up. However, the licensee shall submit half yearly production return to DIPP and Department of Defence Production (DoDP).

To ensure faster clearances, all applications related to DIPP will be processed within 90 days and in case of defence manufacturing, the ministry of home affairs will give security clearance within three months. To promote indigenization of India's defence production and to cut imports bill, the government has enhanced FDI limit to 49% from 26% in August. It also allowed more than one Indian company to hold a 51% share in a defence production company.

The CNX Nifty is currently trading at 7895.85, up by 16.45 points or 0.21% after trading in a range of 7889.85 and 7934.50. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 5.42%, GAIL India up by 4.34%, Sesa Sterlite up by 4.04%, BHEL up by 3.66% and Bharti Airtel up by 2.86%. On the flip side, Coal India down by 2.26%, ONGC down by 2.09%, Mahindra & Mahindra down by 1.88%, Lupin down by 1.77% and BPCL down by 0.87% were the top losers.

Asian markets were trading in red, Straits Times up by6.52 points or 0.2% to 3,187.57. While, Nikkei 225 down 293.93 points or 1.95% to 14,817.30, Jakarta Composite down 19.88 points or 0.39% to 5,020.65, KOSPI Index down 14.78 points or 0.77% to 1,915.28, Taiwan Weighted down 8.5 points or 0.1% to 8,654.64, Shanghai Composite down 8.24 points or 0.35% to 2,348.49, FTSE Bursa Malaysia KLCI down 3.85 points or 0.21% to 1,799.29 and Hang Seng down 3.46 points or 0.01% to 23,066.80