Benchmarks trade slightly in the green in early deals

Indian equity benchmarks have made a cautious but positive start as investors got some confidence from Finance Minister Arun Jaitley’s statement where he pitched for a rate cut by the RBI, saying that the credit offtake is slow, infrastructure creation becomes slower, and the manufacturers find it difficult to afford costly capital, because it is going to add to each one of their costs. Sentiments also got some boost, as the Union Cabinet cleared ordinance on Land Acqusition Act including removal of consent clause for acquiring land for five areas of industrial corridors, PPP projects, rural infrastructure, affordable housing and defence. However, gains remained capped as traders remained concerned with the Reserve Bank of India’s (RBI) Financial Stability Report (FSR), stating that risks to India’s banking system continue to remain at elevated levels on concerns of further deterioration in the asset quality. The central bank has warned that banks’ bad loans will worsen if economy falters further.

Weakness in global markets too dampened the sentiment as the US markets ended mostly flat in last session. Trade remained choppy as many traders stayed on the sidelines amid a lack of major US economic data on the day. The Asian markets were trading mostly in the red at this point of time weighed down by commodity stocks, as the gold and crude oil slumped.

Back home, on the sectoral front, consumer durables, capital goods and realty witnessed the maximum gain in trade, while oil and gas, banking and metal remained the top losers on the BSE sectoral space. The broader indices however were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1141 shares on the gaining side against 669 shares on the losing side while 61 shares remain unchanged.

The BSE Sensex is currently trading at 27400.81, up by 5.08 points or 0.02% after trading in a range of 27336.33 and 27478.30. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.49%, while Small cap index up by 0.41%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.23%, Capital Goods up by 1.13%, Realty up by 0.88%, Power up by 0.71% and Infrastructure up by 0.63% while, Oil & Gas down by 0.70%, Metal down by 0.61% and Bankex down by 0.20% were the few losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.18%, Hindustan Unilever up by 0.84%, Sun Pharma Inds. up by 0.83%, BHEL up by 0.77% and NTPC up by 0.68%. On the flip side, Sesa Sterlite down by 1.49%, Reliance Industries down by 1.34%, Hindalco down by 0.83%, ONGC down by 0.66% and Hero MotoCorp down by 0.60% were the top losers.

Meanwhile, with an aim to fast track the reforms process, the government, after approving key reforms for coal and insurance sectors recently through ordinance route, may soon take the same route to pave the way for auction of iron ore and other minerals as the proposed amendments to the MMRDA Act have been pending since long. 

As mining sector is one of the chosen segments for the ‘Make in India’ programme,  the government has planned to circulate the new bill seeking promulgation of ordinance for bringing changes in Mines and Minerals (Development and Regulation) Act, 1957. A large number of mines have remained shut and the Mines Ministry is of the view that due to absence of a set of guidelines, the government is unable to take decisions. Meanwhile, the ordinance will pave the way for decision-making. 

Mines Ministry has prepared a draft amendment Bill and is now considering moving a proposal to the Cabinet to adopt the ordinance route as the Winter Session of Parliament is over. The Bill sought to introduce competitive bidding through the auction route for iron ore and other minerals and also focuses on attracting private investment and latest technology and eliminating delay in administration. Meanwhile, the provisions for the auction route for the allocation of mines and creation of District Mineral Fund for the welfare of the project-affected people would remain. The Ordinance would also provide for greater decentralization of power to states for allocation of resources. 

The CNX Nifty is currently trading at 8249.05, up by 2.75 points or 0.03% after trading in a range of 8230.30 and 8268.25. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 1.25%, BPCL up by 1.23%, DLF up by 1.07%, Zee Entertainment up by 0.94% and Jindal Steel & Power up by 0.84%. On the flip side, Sesa Sterlite down by 1.35%, Reliance Industries down by 1.30%, Hindalco down by 0.83%, ONGC down by 0.81% and PNB down by 0.77% were the top losers.

The Asian markets were trading mostly in the red; Hang Seng declined 221.95 points or 0.93% to 23,551.23, Nikkei 225 tumbled 206.89 points or 1.17% to 17,522.95, KOSPI Index decreased by 13.51 points or 0.7% to 1,914.35, Shanghai Composite dipped 12.74 points or 0.4% to 3,155.28, Straits Times slipped 4.34 points or 0.13% to 3,363.35 and FTSE Bursa Malaysia KLCI was down by 0.55 points or 0.03% to 1,767.86. On the flip side, Taiwan Weighted increased 1.63 points or 0.02% to 9,287.91 and Jakarta Composite was up by 6.52 points or 0.13% to 5,184.90.