Benchmarks continue to trade in green in late morning session

Indian equity benchmarks continued to trade firm in late morning session on revival of buying by funds and retail investors after the government's decision to waive minimum alternate tax (MAT) on foreign investors for the period before April 1, 2015. Finance Minister Arun Jaitley said the government has accepted the recommendations of a panel set up to examine the issue, and said he would make the change permanent through legislation in the next Parliament session. At present, Sensex and Nifty were trading above the crucial 25,800 and 7,800 levels respectively, with gains of over 0.35 percent. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.69 percent and 0.93 percent, respectively. Some support also came with the statement of Chief Economic Adviser (CEA) Arvind Subramanian that slowdown in China is a historic opportunity for India as Chinese production becomes less profitable. India is a net importer country accordingly Chinese slowdown is an opportunity to relaunch growth in India. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 675.32 crore on September 01, 2014. Concerns over China's economy, coupled with a possibility of a rate hike in the US later this month, also weighed on the sentiment.

On the global front, Asian equity markets are trading mostly in green led by rebounded in Japanese market. The Japanese Nikkei climbed into positive territory, after opening lower in volatile trades following the weak cues overnight from global markets. Further, major U.S. benchmarks finished sharply lower Tuesday after the pessimistic factory data. Back home, Indian rupee appreciated by 8 paise to 66.14 against the US dollar in early trade on increased selling of the American currency by exporters and banks.

Back on street, stocks from Realty, FMCG and IT counters were supporting the markets’ uptrend, while those from Power, Oil & Gas and PSU counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Info Edge (India) surged after the Reserve Bank of India (RBI) approved hike in investment limit by overseas investors. On the flip side, shares of Hero MotoCorp have declined after two-wheeler maker reported 13.97% year-on-year decline in sales at 480,537 units in August.

The market breadth on BSE was positive, out of 2152 stocks traded, 1167 stocks advanced, while 897 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25821.68, up by 125.24 points or 0.49% after trading in a range of 25689.07 and 25939.37. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.69%, while Small cap index up by 0.93%.

The gaining sectoral indices on the BSE were Realty up by 1.90%, FMCG up by 1.79%, IT up by 1.58%, TECK up by 1.37% and Metal up by 0.26%, while Power down by 0.40%, Oil & Gas down by 0.31%, PSU down by 0.20% and Bankex down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.34%, ITC up by 2.30%, Lupin up by 2.24%, Reliance Industries up by 1.65% and Infosys up by 1.10%. On the flip side, ONGC down by 1.69%, Hero MotoCorp down by 1.61%, BHEL down by 1.54%, NTPC down by 1.25% and Bharti Airtel down by 1.07% were the top losers.

Meanwhile, Chief Economic Adviser (CEA) Arvind Subramanian has said that slowdown in China is a historic opportunity for India as Chinese production becomes less profitable. India is a net importer country accordingly Chinese slowdown is an opportunity to relaunch growth in India. Investment from Chinese company like Foxconn of Taiwan and Xiaomi suggest that companies based in China might now view India as a hedge against the slowdown.

Talking about the recently devalued Chinese Renminbi, Subramanian has stated that India has an unambiguous interest in supporting China's currency become the part of Special Drawing Rights (SDR) basket, or the supplementary foreign exchange reserves maintained by the International Monetary Fund, because essentially as the Chinese currency becomes more and more international, China will have to open up its economy which is good for the world, good for China. He also said that after which China will be less able to manipulate its currency, keep it low, which could be disadvantageous for China. So India has a strong stake in that the Chinese currency becomes internationalized.

Besides, he added that China should be able to get the geo-political benefits issuing from its currency becoming more international because the concrete economic result would be both an opening up and a tighter linking of the Chinese economy. Last month, in order to deal with current economic weaknesses, the Chinese central bank had lowered its daily reference rate by 1.9 percent, rocking currency markets globally and affecting the rupee.

The CNX Nifty is currently trading at 7825.10, up by 39.25 points or 0.50% after trading in a range of 7779.10 and 7862.55. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.12%, Ambuja Cement up by 3.08%, TCS up by 2.49%, Lupin up by 2.23% and ITC up by 2.19%. On the flip side, ONGC down by 1.79%, BHEL down by 1.75%, Hero MotoCorp down by 1.69%, NTPC down by 1.54% and Cairn India down by 1.48% were the top losers.

Asian markets were trading mostly in green; KOSPI Index was up by 0.3%, Shanghai Composite up by 0.85%, Hang Seng was up by 0.18%, Straits Times up by 0.51%, Jakarta Composite up by 0.04%, Taiwan Weighted up by 0.42% and Nikkei 225 up by 0.87%. On the flip side, FTSE Bursa Malaysia KLCI was down by 0.75%.