Benchmarks trim gains; trade continues in green

After getting a gap-up start, Indian equities have trimmed some gains but continue to trade in green in the late morning session on account of profit booking in frontline counters. The sentiments were on optimistic note from the early trade with law minister Sadananda Gowda’s statement that India plans to amend its arbitration law, setting time limits for courts and easing judicial rules to decide corporate disputes, as it seeks to attract more foreign investment. Some support also came with global credit rating agency Moody's Investors Service statement that the lower oil prices is expected to alleviate India's high inflation and spur economic growth. According to Moody's, lower oil prices, which is expected to sustained would in principle provide a significant boost to global growth. However, investors are concerned about economists saying that the new methodology pushing up the GDP forecast to 7.4 percent for the current fiscal is not in sync with key parameters such as tax collections and credit growth. Based on the new series, the Central Statistics Office has projected an economic growth rate of 7.4 percent for 2014-15, up from 6.9 percent a year ago. Some weakness may come as foreign funds continued to remain net sellers on domestic bourses. FPIs sold shares worth Rs 1261.19 crore on February 10, 2015.

Meanwhile, few traders remained on the sidelines and refrained from any buying activity ahead of a meeting of euro area finance ministers on Wednesday to renegotiate Greece’s bailout package. On global front, Asian stock markets were mostly higher as confidence grew that Greece would reach a new debt deal with its European creditors enabling it to stay in the euro currency bloc. Some support also came after China's central bank statement that it is ready to fight a downturn, while not taking excessive risks with credit creation. Back home, Indian rupee lost 11 paise to 62.30 against the Greenback in early trade due to a rise in the US dollar's value against other foreign currencies.

Back on street, stocks from Capital Goods, Power and Banking counters were supporting the markets’ uptrend, while those from Metal, Oil & Gas and Infrastructure counters were adding to the underlying cautious undertone. In scrip specific development, shares of National Aluminium Company have surged after reporting a more than double net profit at Rs 354 crore for the quarter ended December 31, 2014. On the other hand, shares of SRF have dipped after reporting a marginal one present year on year growth in net profit at Rs 72.62 crore for the third quarter ended December 31, 2014 due to increased depreciation and interest expenses.

The market breadth on BSE was positive, out of 2128 stocks traded, 1342 stocks advanced, while 723 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28440.20, up by 84.58 points or 0.30% after trading in a range of 28424.39 and 28563.83. There were 16 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.60%, while Small cap index was higher by 0.91%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.48%, Power up by 1.02%, Bankex up by 0.95%, Consumer Durables up by 0.80%, FMCG up by 0.40% while, Metal down by 0.23%, Oil & Gas down by 0.19%, INFRA down by 0.13%, Auto down by 0.12%, TECK down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.98%, Coal India up by 1.78%, ICICI Bank up by 1.77%, Axis Bank up by 1.57% and Sun Pharma  up by 1.37%. On the flip side, ONGC down by 2.01%, Bharti Airtel down by 1.95%, Sesa Sterlite down by 1.79%, Tata Motors down by 1.47% and BHEL down by 1.22% were the top losers.

Meanwhile, in what could be called the new government’s efforts to ease litigations and increase foreign funding, the Law minister Sadananda Gowda has said that India plans to amend its arbitration law, setting time limits for courts and easing judicial rules to decide corporate disputes, as it seeks to attract more foreign investment. The minister said that government is bringing a new litigation policy to ensure that departments do not sue each other and cases are settled through arbitration and reconciliation.

A government panel has suggested limiting courts’ authority to overrule arbitration awards and fixing time limits and fees to settle legal cases. The government earlier deferred plans to issue an executive order to amend the law, as it wanted the parliamentary approval. The next parliament session begins on February 23, with finance minister Arun Jaitley due to present his budget. Gowda said that Arbitration Act would be amended to ensure that cases were settled in India itself. Due to lack of infrastructure facilities, including manpower shortage, many go for arbitration outside India.

The minister has also said that the government also plans to set up separate commercial courts to speed the resolution of corporate disputes, a move that could unlock billions of dollars in investments. The Law Commission in its report on judicial reforms has recommended establishment of separate benches in the high courts for speedy disposal of cases related to commercial and financial matters.

The CNX Nifty is currently trading at 8603.65, up by 38.10 points or 0.44% after trading in a range of 8593.65 and 8631.20. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.25%, Power Grid up by 2.00%, ICICI Bank up by 1.89%, Coal India up by 1.86% and Axis Bank up by 1.62%. On the flip side, ONGC down by 1.97%, Zee Entertainment down by 1.93%, Cairn India down by 1.91%, Sesa Sterlite down by 1.77% and Bharti Airtel down by 1.75% were the top losers.

Asian markets were trading mostly in the green; Shanghai Composite increased 0.19%, FTSE Bursa Malaysia KLCI up by 0.5%, Straits Times rose 0.25%, KOSPI Index jumped 0.45%, Jakarta Composite gained 0.28% and Taiwan Weighted was up by 0.81%. On the flip side, Hang Seng decreased 0.76%.