Benchmarks trade slightly in the green in early deals

Indian equity benchmarks have made a positive start on Wednesday as investors opted to buy beaten down but fundamentally strong stocks after the last session’s massacre. Meanwhile, in a customary pre-budget consultation with finance minister Arun Jaitley, India Inc has pitched for reduction in corporate tax rate, aggressive disinvestment of government stake in public sector units, higher personal income tax exemption limits and a massive increase in public expenditure to boost growth. However, gains remained capped as traders remained cautious on concerns over falling crude oil prices and political uncertainty in Greece. Meanwhile, foreign institutional investors were net sellers in Indian equities worth Rs 1,570.76 crore on January 6, 2015, as per provisional stock exchange data.

On the global front, the US markets extended their decline and major averages despite some recovery in latter part of the trade, ended lower by about a percent, mainly on decrease in the crude oil prices and as US service sector grew at a notably slower rate in December. The Asian markets after slow starts are slightly showing some improvement and most of the indices in the region were trading in the green at this point of time.

Back home, on the sectoral front, oil and gas, FMCG and consumer durables witnessed the maximum gain in trade, while metal, power 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 1150 shares on the gaining side against 733 shares on the losing side while 66 shares remain unchanged.

The BSE Sensex is currently trading at 27001.63, up by 14.17 points or 0.05% after trading in a range of 26876.58 and 27050.00. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index up by 0.48%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.65%, FMCG up by 0.59%, Consumer Durables up by 0.55%, IT up by 0.47% and TECK up by 0.41% while, Metal down by 0.29%, Power down by 0.12%, Auto down by 0.05%, Bankex down by 0.05% and Capital Goods down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.17%, Reliance Industries up by 1.43%, NTPC up by 1.36%, Coal India up by 0.99% and TCS up by 0.75%. On the flip side, GAIL India down by 3.03%, Tata Motors down by 1.62%, ICICI Bank down by 1.61%, BHEL down by 1.61% and Dr. Reddys Lab down by 0.80% were the top losers.

Meanwhile, In a major encouragement for new infrastructure projects development, the government removes arbitrary environmental clearance to facilitate infrastructure projects. In its recently released notification, the environment ministry has notified that building of large industrial sheds, schools, colleges and hostels of up to 150,000 square metres are now exempted from seeking a prior green nod for construction.

The government's decision will help to boost the infrastructure development in the country as  this green hurdle had made it difficult to build any plant over 5 acres of land and had forced some investors to explore alternate production hubs with lesser red tape. The new norms would also help businesses build larger factories that enjoy economies of scale much faster. However, the Ministry cleared that new buildings must ensure environment management by putting in place systems for rainwater harvesting, solid and liquid waste management. Further, as per the new norms, investors may use recycled materials such as fly ash bricks' for building new factories. 

Earlier, in 2013, the previous government had notified that building a factory was tantamount to undertaking a construction project and stipulated a prior environment clearance for any such industrial building with a built-up area of over 20,000 square metres. This regulation had jeopardized several greenfield and brownfield investment plans of large manufacturing players including MNC auto makers Maruti Suzuki as getting such a clearance takes two years in a best-case scenario.

The CNX Nifty is currently trading at 8147.25, up by 19.90 points or 0.24% after trading in a range of 8098.00 and 8150.65. There were 28 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 3.46%, Kotak Mahindra Bank up by 3.10%, Asian Paints up by 2.16%, Reliance Industries up by 1.66% and NTPC up by 1.58%. On the flip side, GAIL India down by 2.67%, Cairn India down by 1.59%, BHEL down by 1.48%, Tata Motors down by 1.48% and ICICI Bank down by 1.44% were the top losers.

Most of the Asian equity indices were trading in the green; Shanghai Composite rose 0.49 points or 0.01% to 3,351.93, KOSPI Index added 2.47 points or 0.13% to 1,884.92, Straits Times strengthened 24.21 points or 0.74% to 3,306.16, Jakarta Composite increased 26.26 points or 0.51% to 5,195.32, Taiwan Weighted surged 46.87 points or 0.52% to 9,095.21, Nikkei 225 gained 62.46 points or 0.37% to 16,945.65 and Hang Seng was up by 168.54 points or 0.72% to 23,653.95. On the flip side, FTSE Bursa Malaysia KLCI was down by 4.61 points or 0.27% to 1,711.97.