Benchmarks continue firm trade in late morning session

After getting a gap-up start, benchmark equity indices continue to trade in fine fettle in late morning deals on the back of fresh buying by funds and retail investors. The market seintiments were lifted by overnight gains on Wall Street that was driven by strong US housing data. Besides, a further decline in crude prices heading towards six-year low on slowdown of growth in the Japanese economy, the world's third-biggest oil consumer has lifted the sentiments. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 142.34 crore on August 17, 2015. However, gained capped with the report that Rating agency Moody’s Investors Service lowered India’s growth forecast to 7 per cent for 2015, from 7.5 per cent projected earlier, citing monsoon concerns and cautioned that further risks to growth stems from slow pace of reforms. At present, Sensex and Nifty were trading above the crucial 28,000 and 8,500 levels respectively, with gains of over 0.50 percent. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.8 percent and 1.1 percent, respectively.

On the global front, Asian stocks were trading mostly in red with shares in Japan and China witnessing profit taking at higher levels while FTSE Bursa Malaysia KLCI and Straits Times were trading higher. Overnight, US stocks rose after strong economic data boosted the housing sector and as investors bought recently battered shares in biotech and media. Back home, all sectoral indices were trading in the positive territory with BSE IT index up 2.27% followed by Teck, Consumer Durables and Capital Goods indices trading higher by over a percent. Furthermore, shares of tea and coffee companies were trading higher by up to 9% each on the bourses in morning trades on reports that the government is considering allowing foreign direct investment (FDI) in coffee plantation sectors. In scrip specific development, Shares of Adani Ports and Special Economic Zone have surged after the company entered into an agreement with the Kerala government for building Rs 7,525 crore Vizhinjam seaport project. Moreover, shares of Reliance Communications have gained after the company received non-binding bids from a number of interested buyers for the sale of a majority stake in Reliance Infratel, its tower unit.

The market breadth on BSE was positive, out of 2353 stocks traded, 1535 stocks advanced, while 724 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28021.27, up by 143.00 points or 0.51% after trading in a range of 27945.79 and 28040.73. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.80%, while Small cap index up by 1.15%.

The top gaining sectoral indices on the BSE were IT up by 2.27%, TECK up by 1.84%, Consumer Durables up by 1.22%, Capital Goods up by 1.19% and Auto up by 0.80%, while there were no losers on the sectoral space.

The top gainers on the Sensex were Infosys up by 2.91%, Tata Steel up by 2.88%, SBI up by 2.53%, TCS up by 2.15% and Wipro up by 1.82%. On the flip side, GAIL India down by 2.60%, Cipla down by 0.97%, Coal India down by 0.95%, NTPC down by 0.55% and HDFC Bank down by 0.55% were the top losers.

Meanwhile, Inviting investors from United Arab Emirates (UAE), Prime Minister Narendra Modi has said that India has an investment opportunity of $1 trillion, in sectors like infrastructure, energy, real estate etc., and urged UAE’s businessmen to come to invest in India and together make the 21st century ‘Asia’s Century’. Modi further stated that his government would take all necessary steps to address concerns of the businessmen from UAE and erase “deficit of 34 years”, he also assured to send commerce Ministry to try and find solutions to the problems faced by some UAE investors. He also stated that his government has got some problems in legacy and his immediate priority would be to kickstart the things which were stalled by the 'indecisiveness and lethargy' of the past governments.

Besides, Prime Minister has said all major global institutions agree that India is the world’s fastest growing economy and it has enormous development potential. He also said that UAE’s power and India’s potential can make the dream of an Asian Century a reality. Furthermore, He pointed several sectors including insurance, railways, defence manufacturing that have been opened up for foreign investment in India.

UAE’s investors have said they want steps like single window clearance and cited cumbersome and complex processes for doing business in India. Furthermore, they underlined the government needs to be a strategic partner to create a conducive business environment for the investors who need safety of their investments. To these, Modi assured that these problems will be resolved. The issue assumes significance as a number of investors, including some from the Middle-East region; have in the past faced problems on account of taxation and policy related issues.

Listing out investment areas, Modi highlighted that India needs technology, speed and quality construction when it comes to housing. Low-cost housing is very important for Indian.  In the agriculture sector, India needs cold storage network and warehousing network where UAE businesses have another advantage.

The CNX Nifty is currently trading at 8524.40, up by 47.10 points or 0.56% after trading in a range of 8500.80 and 8525.75. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.06%, SBI up by 2.61%, BPCL up by 2.52%, Tata Steel up by 2.43% and TCS up by 2.27%. On the flip side, GAIL India down by 2.56%, NMDC down by 2.07%, Coal India down by 0.99%, Idea Cellular down by 0.92% and Cipla down by 0.73% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite was down by 1.46%, Nikkei 225 down by 0.25%, Jakarta Composite down by 1.04%, Hang Seng down by 0.16%, Taiwan Weighted down by 0.17% and KOSPI Index down by 0.62%. On the flip side, Straits Times was up by 0.2% and FTSE Bursa Malaysia KLCI was up by 0.58%.