Benchmarks trim gains; trade continues in green

After getting a gap-up start, Indian equities trimmed gains but continued to trade in green in the late morning session on account of profit booking in frontline counters. The sentiments were distrustful after rupee lost against the dollar, on fresh demand for the American currency from banks and importers. However, Realty stocks saw strong buying action after government's decision to lower built-up area and minimum capital requirements which need to be met by construction companies before accepting any foreign investments. Meanwhile, some support crept into Dalal Street with the Reserve Bank of India deputy governor H. R. Khan’s statement that the central bank is reasonably comfortable with the current account deficit because of lower oil prices. Meanwhile, in its effort to boost confidence among taxpayers, the government has set up a High Level Committee (HLC) to interact with trade and industry and identify areas where clarity on tax laws is needed. At present, Sensex and Nifty were trading above the crucial 28,500 and 7,550 levels respectively, with gains of over 0.19%.

On global front, Asian markets rallied amid fresh signs of resilience in the U.S. economy, while the euro wallowed near two-year lows before a much-anticipated European Central Bank meeting that could open the door to more stimulus. The improved mood was helped by the Dow and S&P rising to record highs overnight after private payrolls and services sector data underscored the US economy’s resilience.

Back home, stocks from Power, Capital Goods and Auto counters were supporting the markets’ uptrend, while those from FMCG and information technology (IT) counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Sanghvi Forging and Engineering have shined after the company has received fresh orders worth Rs 11 crore from the oil and gas and power sectors. On the other hand, Shares of SAIL were down ahead of the partial stake sale by the government on December 5, 2014. The government has offered to sell up to 206,526,264 equity shares of the face value of Rs 10 each, representing 5% of the total paid up equity share capital of SAIL.

The market breadth on BSE was positive, out of 2336 stocks traded, 1269 stocks advanced, while 982 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28547.36 up by 104.65 points or 0.37% after trading in a range of 28808.78 and 28493.98. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index gained 0.56%.

The gaining sectoral indices on the BSE were FMCG up by 2.53%, Oil & Gas up by 0.44%, Realty up by 0.36%, Auto up by 0.31% and Capital Goods up by 0.28% while, Consumer Durables down by 0.35%, INFRA down by 0.22%, TECK down by 0.14%, Metal down by 0.13% and IT down by 0.10% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 4.41%, Cipla up by 2.70%, Sesa Sterlite up by 1.13%, ONGC up by 1.06% and ICICI Bank up by 0.90%. On the flip side, Tata Power down by 1.16%, Axis Bank down by 1.12%, BHEL down by 0.83%, HDFC down by 0.64% and GAIL India down by 0.58% were the top losers.

Meanwhile, Realty sector which has been grappling with fund scarcity since last some time, is likely to get fresh lease of life with government relaxing FDI policy for the sector by easing exit norms and reducing built-up area and capital needs.

The revised norms relating to Construction Development Sector notified by the Department of Industrial Policy and Promotion (DIPP), states that investor will be permitted to exit on completion of the project or after development of trunk infrastructure i.e. roads, water supply, street lighting, drainage and sewerage.

The new policy, which has done away with the 3-year lock-in period for repatriation of investment has also reduced the minimum floor area requirement to 20,000 sq mt from 50,000 sq mt earlier. It also brought down the minimum capital requirement to $5 million from $10 million. While in case of development of serviced plots, the condition of minimum land of 10 hectares has been completely removed.

For affordable homes, the government has exempted the conditions of minimum floor area and capital requirement if an investee/joint venture companies commit at least 30 per cent of the total project cost for low-cost housing. The government is expecting the new measures to result in enhanced inflows into the construction development sector and result in creation of much needed low cost affordable housing in the country and development of smart cities.

The CNX Nifty is currently trading at 8551.65 up by 14.00 points or 0.16% after trading in a range of 8626.95 and 8531.70. There were 18 stocks advancing against 32 declining on the index.

The top gainers on Nifty were ITC up by 4.38%, BPCL up by 1.19%, Cipla up by 1.17%, ONGC up by 1.16% and Sesa Sterlite up by 1.02%. On the flip side, Indusind Bank down by 1.62%, DLF down by 1.58%, Zee Entertainment down by 1.51%, Tata Power down by 1.38% and Axis Bank down by 1.17% were the top losers.

Asian markets were trading mostly in green, Straits Times gained 0.29%, KOSPI Index was up by 0.86%, Shanghai Composite surged by 1.62%, Jakarta Composite up by 0.18%, Taiwan Weighted was higher by 0.57%, Hang Seng increased 0.52% and Nikkei 225 was up by 0.81%. On the other hand, FTSE Bursa Malaysia KLCI declined by 0.30%.