Benchmarks trade jubilantly in early deals

Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals on Friday as investors opted to buy beaten-down but fundamentally strong stocks after three days of continues drubbing. Traders were also getting some support with Finance Minister Arun Jaitley announcing a high level committee, which will give its first recommendations on the issue of imposition of MAT on foreign investors. The committee would also look into few other tax issues, which are essentially legacy issues. However, traders will be reacting to the earnings and will be keeping a close eye on the movement of rupee, which slipped to its 20 months low in last session.

Global cues too remained supportive with the US markets recovering from their declining streak and managing a close in green in last session, ahead of the monthly jobs report on bargain hunting, following the recent pullback. Although, there was slight rebound in initial jobless claims in the week ended May 2nd. All the Asian markets were trading in green at this point of time, as investors’ awaited US labor data.

Back home, on the sectoral front, realty, auto and infrastructure witnessed the maximum gain in trade, while consumer durables remained the lone loser on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1476 shares on the gaining side against 333 shares on the losing side while 49 shares remain unchanged.

The BSE Sensex is currently trading at 26957.76, up by 358.65 points or 1.35% after trading in a range of 26814.38 and 27002.70. There were 26 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.43%, while Small cap index gained 1.62%.

The gaining sectoral indices on the BSE were Realty up by 2.59%, Auto up by 2.09%, INFRA up by 1.87%, Capital Goods up by 1.76% and Bankex up by 1.73% while, Consumer Durables down by 3.47% was the lone losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.23%, Mahindra & Mahindra up by 3.03%, ICICI Bank up by 2.86%, Bajaj Auto up by 2.31% and HDFC up by 2.29%. On the flip side, Hero MotoCorp down by 2.94%, Vedanta down by 0.46% and TCS down by 0.20% were the top losers.

Meanwhile, in a decision which would help in speedier clearance of foreign direct investments proposals, which is one of the key concerns of investors, the cabinet has given more teeth to Foreign Investment Promotions Board (FIPB) by enhancing its power to take decision on foreign investments worth Rs 3000 crore against Rs 1200 crore permitted in FDI policy, 2014. This decision is expected to clear the decks for many stalled proposals by expediting the approval process, resulting into increased foreign investment inflows.

However, for recommendations of FIPB on proposals involving total foreign equity inflow of more than Rs 3,000 crore would still require consideration of CCEA. According to the extant policy, all the proposals above Rs 1,200 crore had to be referred to the Cabinet Committee on Economic Affairs (CCEA), while the finance minister cleared the recommendations of the FIPB on proposals with total foreign equity inflow of and below Rs 1,200 crore.

Additionally, CCEA would also consider the proposals which may be referred to it by the FIPB / the Minister of Finance. Further, the FIPB Secretariat in the Department of Economic Affairs (DEA) will process the recommendations of FIPB to obtain the approval of Minister of Finance and the CCEA.

Notably, most of the sectors are presently under the automatic route, which means that FDI in these sectors would require intimation to RBI and no approval of FIPB/ CCEA. However, proposals in certain sensitive sectors like tea, mining, and telecom (beyond 49 percent FDI) still require to be routed through FIPB.

The CNX Nifty is currently trading at 8158.90, up by 101.60 points or 1.26% after trading in a range of 8123.45 and 8175.50. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.32%, Mahindra & Mahindra up by 2.91%, ICICI Bank up by 2.91%, HDFC up by 2.40% and Cipla up by 2.17%. On the flip side, Hero MotoCorp down by 3.01%, Grasim Industries down by 0.47%, TCS down by 0.32% and Vedanta down by 0.30% were the top losers.

Asian markets were trading in the green; KOSPI Index rose 1.03 points or 0.05% to 2,092.03, FTSE Bursa Malaysia KLCI increased 6.89 points or 0.38% to 1,811.99, Taiwan Weighted advanced 11.17 points or 0.12% to 9,715.28, Straits Times jumped 17.49 points or 0.51% to 3,450.27, Jakarta Composite surged 41.71 points or 0.81% to 5,192.20, Shanghai Composite soared 51.67 points or 1.26% to 4,163.88, Nikkei 225 added 106.4 points or 0.55% to 19,398.39 and Hang Seng was up by 194.57 points or 0.71% to 27,484.54.