Markets trade near day’s high on sustained buying activities

Going from strength to strength, local equity markets were trading near day’s high point with gains of around three tenths of a percent that lifted both Sensex and Nifty above psychologically crucial 28,050 and 8,500 levels respectively on sustained buying activities by funds and retail investors for second consecutive sessions thanks to positive global cues. Meanwhile, broader indices also contributing to the rally rather outpacing larger counterparts were trading with gains in the range of 0.60-0.1.20%.

On the global front, Asian equities were largely buoyant on Tuesday tracking a more than 1% jump on Wall Street overnight after Beijing unleashed new policy moves to shore up a wobbly property market. According to a statement on the People's Bank of China, the required down payment for second homes was lowered to 40 percent from 60 percent. In addition, select homeowners who have held a property for two years or more will be exempted from a sales tax, the finance ministry later announced.

Closer home, with the buying being broad-based, most of the sectoral indices on BSE were trading in positive territory, among those stocks from Oil & Gas, Auto and Healthcare counters were outperforming rest of the counterparts. On the flip side, much of the drubbing was witnessed by stocks from Information Technology, Technology and Capital Goods counters which were the top losers of the session. In stock-specific activity, bank stocks rose after the Reserve Bank of India allowed banks to utilise upto 50% of countercyclical provisioning buffer/floating provisions for making specific provisions for non-performing assets. Meanwhile, non banking companies stocks were trading mixed after Reserve Bank of India proposed new norms for regulation of non-banking financial companies. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1442:562; while 24 shares remained unchanged.

The BSE Sensex is currently trading at 28067.95, up by 92.09 points or 0.33% after trading in a range of 28026.27 and 28111.38. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.67%, while Small cap index up by 1.22%.

The gaining sectoral indices on the BSE were Oil & Gas up by 2.11%, PSU up by 1.09%, Auto up by 1.05%, Metal up by 0.97% and Consumer Durables up by 0.94% while, IT down by 0.39%, TECK down by 0.29%, Capital Goods down by 0.13% and FMCG down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 3.29%, Reliance Industries up by 2.31%, GAIL India up by 2.19%, Sesa Sterlite up by 1.96% and Dr. Reddys Lab up by 1.95%. On the flip side, NTPC down by 0.88%, Infosys down by 0.84%, ITC down by 0.73%, TCS down by 0.73% and HDFC Bank down by 0.51% were the top losers.

Meanwhile, Credit Rating agency, Moody’s in its report recently underscored that government-approved measures to revive and improve the utilization of stranded gas-based power generation plants in the country, are credit positive for banks since they have substantial credit exposure to such plants. This report comes a week after central government approved a financial support to the private companies to help them use costly LNG for generating electricity, in a move which will revive Rs 60,000 crore of stranded power projects.

The global credit rating agency pointed that biggest beneficiaries of these measures of government will be IDBI Bank, State Bank of India and ICICI Bank. The agency highlighted that power generation plants, which use re-gasified liquefied natural gas (RLNG) as their fuel base have been facing significant availability and pricing challenges since actual domestic production of LNG have been significantly lower than the assumptions made when the plants were set up.

Moreover, it highlighted that importing LNG at prevailing prices has proved difficult because it escalates generation costs, which, in turn, raises prices that is beyond the reach of buyers. Among Moody's rated banks, IDBI Bank has an especially high exposure to gas-based power plants and would be the key beneficiary of these measures. Meanwhile, SBI and ICICI Bank which have exposure to Ratnagiri Power Plant, which is the largest gas-based power plant in India also would benefit from this move.

The CNX Nifty is currently trading at 8520.10, up by 27.80 points or 0.33% after trading in a range of 8499.85 and 8535.10. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were BPCL up by 4.19%, Tata Power up by 3.70%, Reliance Industries up by 2.24%, GAIL India up by 2.13% and Dr. Reddys Lab up by 2.07%. On the flip side, Ultratech Cement down by 1.50%, NTPC down by 1.08%, Zee Entertainment down by 1.04%, TCS down by 0.96% and Infosys down by 0.81% were the top losers.

Asian markets were trading mostly higher; with FTSE Bursa Malaysia KLCI trading higher by 6.66 points or 0.37% to 1,828.49; KOSPI Index trading higher by 10.99 points or 0.54% to 2,041.03; Hang Seng trading higher by 56.96 points or 0.23% to 24,912.08; Jakarta Composite trading higher by 58.89 points or 1.08% to 5,497.55; Taiwan Weighted trading higher by 64.57 points or 0.68% to 9,586.44.

On the flip side, Nikkei 225 edge lower by 204.41 points or 1.05% to 19,206.99; Shanghai Composite slid by 38.67 points or 1.02% to 3,747.90 and Straits Times declined by 7.26 points or 0.21% to 3,447.00.