Benchmarks make positive start; Nifty reclaims 8500 level

With a positive start, Indian Equity markets have recovered most of the last session losses and are trading in fine fettle with the gains of around half a percent, on sustained buying by funds and retail investors. The sentiment got a boost on reports that Foreign portfolio investors (FPIs) bought shares worth a net Rs 142.34 crore on August 17, 2015, as per provisional data released by the stock exchanges. Some support also came after the Confederation of All India Traders (CAIT) called upon the Prime Minister to convene a special session of Parliament soon to pass the deadlocked GST Bill and has asked parties not to play a “political innings” on the issue. Meanwhile, UAE agreed to enhance its investments in India to $75 billion (about Rs 5 lakh crore) including through a dedicated infrastructure fund, while the two nations will also raise bilateral trade by 60 per cent in the next five years, in order to bolster economic ties.  Shares of tea and coffee companies were higher on reports the government is considering allowing foreign direct investment (FDI) in coffee plantation sectors.

On the global front, US markets ended higher after strong economic data of the housing sector and as investors bought recently battered shares in biotech and media. Asian markets were trading mostly in red with shares in Japan and China witnessing profit taking at higher levels.

Back home all the sectoral indices were trading in green lead by Consumer Durables, IT and TECK. The market breadth on BSE was positive in the ratio of 1310: 457 while 53 scrips remained unchanged. 

The BSE Sensex is currently trading at 28031.12, up by 152.85 points or 0.55% after trading in a range of 27945.79 and 28040.73. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.66%, while Small cap index gained 0.91%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.97%, IT up by 1.79%, TECK up by 1.48%, Capital Goods up by 0.78% and INFRA up by 0.66%, while there were no losses.

The top gainers on the Sensex were Infosys up by 2.46%, Tata Steel up by 2.05%, TCS up by 1.44%, Wipro up by 1.35% and Vedanta up by 1.28%. On the flip side, GAIL India down by 1.95%, Cipla down by 1.54%, Tata Motors down by 0.98%, Coal India down by 0.38% and Dr. Reddys Lab down by 0.16% were the top losers.

Meanwhile, the Finance Ministry has advanced the time for Budget preparation by over two months. For the 2016-17 Budget and the process will begin this month instead of October. In a statement, Finance Ministry said that “In consonance with the objective of the Government of India to have wider consultations with various stakeholders as well as to provide more time for planners, it has been decided to start the Budget exercise by middle of August, 2015 for the forthcoming financial year 2016-17.”

The ministry added that the Budget circular, which marks the beginning of Budget formulation exercise, is being issued by the Budget Division. This is for the first time that the government is beginning Budget preparations process seven months ahead of presentation. The Union Budget is traditionally unveiled on the last working day of February.

It also announced the issuance of Budget Circular, which marks the beginning of the Budget formulation exercise. Last year, this circular was issued on October 10. Such a circular fixes the time line for various Ministries to furnish information to the Finance Ministry. It talks about methods to be followed for revenue and expenditure estimates.The budget exercise, which normally starts during later part of October, involves consultations with several interest groups like industry, traders bodies and trade unions.  In addition, various government departments make expenditure proposals to the Finance Ministry. The budget for the next fiscal will be crucial and the finance ministry is apprehensive about the recommendations of the Seventh Pay Commission, which is likely to significantly increase the revenue expenditure of the government in the next fiscal, leaving it less money to spend on building capital assets.

The CNX Nifty is currently trading at 8511.35, up by 34.05 points or 0.40% after trading in a range of 8500.80 and 8520.55. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.12%, Infosys up by 2.09%, Tata Steel up by 1.88%, Asian Paints up by 1.57% and Tech Mahindra up by 1.48%. On the flip side, Cipla down by 2.30%, PNB down by 1.73%, GAIL India down by 1.70%, NMDC down by 1.67% and Bank Of Baroda down by 1.55% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite decreased 58.34 points or 1.46% to 3,935.33, Nikkei 225 decreased 52.45 points or 0.25% to 20,567.81, Jakarta Composite decreased 47.49 points or 1.04% to 4,537.90, Hang Seng decreased 38.86 points or 0.16% to 23,775.79, Taiwan Weighted decreased 14.01 points or 0.17% to 8,199.41and KOSPI Index decreased 12.12 points or 0.62% to 1,956.40.

On the flip side, Straits Times increased 6.26 points or 0.2% to 3,073.61 and FTSE Bursa Malaysia KLCI increased 9.05 points or 0.58% to 1,581.59.