Markets pare some early gains in afternoon session

Indian equity benchmarks continued to trade in green in the afternoon session as buying momentum in the equities persisted, however a marginal downfall from day's high levels was seen as some selling appeared in IT and consumer durables stocks. Good global cues and positive economy related announcements on domestic front encouraged the domestic benchmarks to extend the gains and most of the sectorial indices were trading in green with capital goods as the top gaining index up by over 1.14%. Sentiments got a boost as Finance Minister Arun Jaitley stated that economy is set to clock a 6.5% growth next year and then take off to reach 8-9% in the years to come. Investors were also seen piling up positions in PSU, power and tech stocks. However, sell-off continued in broader indices with both mid cap and small cap indices trading down by over 0.30%.

Shares of Shemaroo Entertainment, extending its previous day’s 24% rally in past two trading sessions, has zoomed 15% to Rs 285, after the foreign institutional investors (FIIs) bought stake in the company via open market. Tata Motors has rallied 3% to Rs 584, extending its previous day’s 3% surge on domestic bourses, after the company has launched the Bolt, a hatchback, starting at Rs 4.64 lakh. The company has already received 1,500 bookings for the car.

On global front, most of the Asian markets were trading in green with Shanghai Composite up by 0.39% and Nikkei 225 up by 0.90% after the European Central Bank launched a landmark bond-buying stimulus programme that buoyed investors’ risk appetite, drove bonds higher and left the euro pinned near 11-year lows. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,800 and 29,000 levels respectively. However, the market breadth on BSE was negative, out of 2,641 stocks traded, 896 stocks advanced, while 1,649 stocks declined on the BSE.

The BSE Sensex is currently trading at 29184.46, up by 178.44 points or 0.62% after trading in a range of 29165.56 and 29408.73. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.31%, while Small cap index down by 0.67%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.14%, Auto up by 1.09%, Bankex up by 0.62%, INFRA up by 0.55% and FMCG up by 0.40%. On the other hand, IT down by 0.50%, Consumer Durables down by 0.37%, PSU down by 0.11%, Power down by 0.08% and TECK down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.58%, Mahindra & Mahindra up by 2.90%, Larsen & Toubro up by 2.20%, Tata Motors up by 2.06% and HDFC Bank up by 1.96%. On the flip side, GAIL India down by 1.96%, Infosys down by 0.94%, BHEL down by 0.85%, TCS down by 0.54% and Coal India down by 0.52% were the top losers.

Meanwhile, A high level panel has suggested that government's food subsidy bill can come down by over Rs 30,000 crore a year by reducing coverage of beneficiaries to 40 percent under the food law and outsourcing major work of Food Corporation of India (FCI)  to state governments and private players. The eight member panel, headed by Shanta Kumar, has submitted its report on restructuring FCI to Prime Minister Narendra Modi.

The panel has recommended direct cash transfer of Rs 3,000 per person a year as food subsidy and Rs 7,000 per hectare as farm input subsidy besides revising minimum support price (MSP) policy with more focus on pulses and oilseeds. It also suggested revising the National Food Security Act, which the UPA government had rolled out in 2013 as the coverage of beneficiaries is higher and not targeted well.

Further, the panel has suggested giving cash transfer in 52 cities having 1 million or more population in two years and also asked the government to give deficit states the option of either supplying grain or cash transfer. The committee is of the view that lowering the coverage of beneficiaries under the food law to 40 percent, from 67 percent, to cover more BPL families and increase the quantity of foodgrains supply to 7 kg per person from the existing 5 kg.

On restructuring the FCI, the panel suggested that despite FCI is in operation for last 50 years, only 6% of the nine crore farmers are getting the MSP and most poor people are not receiving subsidised grain under PDS due to leakages of upto 40-60 percent. Therefore, there is need to restructure the corporation. Finance Ministry had allocated Rs 1.15 lakh crore for food subsidy this year, of which Rs 92,000 crore is for FCI.

The CNX Nifty is currently trading at 8804.10, up by 42.70 points or 0.49% after trading in a range of 8795.40 and 8866.40. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 3.69%, Mahindra & Mahindra up by 2.90%, Larsen & Toubro up by 2.25%, Tata Motors up by 1.99% and HDFC Bank up by 1.96%. On the flip side, PNB down by 2.30%, GAIL India down by 1.86%, Bank of Baroda down by 1.21%, Lupin down by 1.03% and BHEL down by 0.98% were the top losers.

Asian Markets were trading in green, Shanghai Composite up by 12.89 points or 0.39% to 3,356.23, KOSPI Index up by 15.27 points or 0.79% to 1,936.09, FTSE Bursa Malaysia KLCI up by 18.43 points or 1.03% to 1,800.18, Straits Times up by 42.26 points or 1.25% to 3,412.55, Jakarta Composite up by 66.35 points or 1.26% to 5,319.53, Taiwan Weighted up by 101.43 points or 1.08% to 9,470.94, Nikkei 225 up by 156.01 points or 0.9% to 17,485.03and Hang Seng up by 273.67 points or 1.12% to 24,796.30.