Benchmarks continue to trade in green in late morning session

Indian bourses continued to trade in green in late morning session on the back of value-buying in select blue-chip stocks. The sentiments got some support with Minister of State for Finance Jayant Sinha’s statement that the government has the fiscal space to be able to absorb additional financial burden on account of OROP, without having any impact of the fiscal deficit target, which is 3.9 percent. Also, Prime Minister Narendra Modi meeting Indian corporate leaders along with RBI governor and lenders later today could be of great interest for markets, especially given the sliding equity markets, falling domestic currency and sluggish global economic growth. Investors hoping that the meeting may provide some concrete measures to prop up the economy, and offer some solace to the struggling markets. However, growing uncertainty over the Federal Reserve's decision to hike interest rates for the first time in a decade has been weighing on market sentiments. Indian markets, along with other emerging market indexes, have been hit hard by a global rout sparked in China. Indian markets are expected to remain volatile before the crucial US Fed meet, which is scheduled for September 16-17.

On the global front, China stocks extended losses Tuesday and pressured the rest of Asia, after Chinese exports and imports fell more than expected in August. The region was hit Monday with fresh worries about China's economy after officials revised down the country's growth rate for last year. Also on investors' minds is a U.S. jobs report Friday that stirred up concerns that the central bank there may raise interest rates soon. Currencies across Asia continued to slide Tuesday, with some hitting fresh multiyear lows. Back home, Indian rupee recovered by 8 paise to 66.74 against the dollar in early trade, snapping its three-day losing streak on fresh selling of the US currency by banks and exporters.

Back on street, stocks from Power, Banking and Metal counters were supporting the markets’ uptrend, while those from Consumer Durables, FMCG and Oil & Gas counters were adding to the underlying cautious undertone. In scrip specific development, Shares of JSW Energy have gained on reports that the company is to acquire Bina Thermal Power from Jaiprakash Power Ventures for Rs 3,500 crore. Furthermore, Crompton Greaves has rose after the company bagged a 3-year contract from the French distribution network operator ERDF, which manages 95% of the electricity distribution network in France, to provide maintenance and repair services to 4,500 high power transformers.

The market breadth on BSE was negative, out of 2211 stocks traded, 633 stocks advanced, while 1484 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24934.61, up by 40.80 points or 0.16% after trading in a range of 24842.05 and 25018.90. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.64%, while Small cap index down by 0.94%.

The top gaining sectoral indices on the BSE were Power up by 1.31%, Bankex up by 1.19%, Metal up by 0.58%, PSU up by 0.42% and Capital Goods up by 0.41% while, Consumer Durables down by 2.48%, FMCG down by 1.19%, Oil & Gas down by 0.23%, Realty down by 0.12% and Auto down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 4.51%, ICICI Bank up by 2.37%, NTPC up by 2.35%, Tata Steel up by 2.01% and Hindalco up by 1.54%. On the flip side, Cipla down by 3.37%, Hindustan Unilever down by 3.21%, Lupin down by 2.34%, Bharti Airtel down by 1.97% and Dr. Reddys Lab down by 1.91% were the top losers.

Meanwhile, the government has ruled out the possibility of additional financial burden of Rs 8,000-10,000 crore due to One Rank One Pension (OROP) scheme hurting the fiscal consolidation programme, saying there was 'space' to absorb it Minister of State for Finance Jayant Sinha has said that 'We have the fiscal space to be able to absorb this without having any impact of the fiscal deficit target of 3.9 percent. We have taken that into account as we have prepared the OROP scheme'.  

Last week, the government had announced that it will implement OROP under which a uniform pension would be given to armed forces personnel retiring at the same rank with the same length of service and pension for defence personnel would be revised every five years. The scheme would be implemented from July 1, 2014. The arrears would be paid in four half-yearly installments. However, all widows, including war widows, will be paid in one installment. There are estimated 6.5 lakh war widows and over 27 lakh ex-defence personnel who will benefit from the OROP scheme.

Jayant Sinha also stated that the actual payout in arrears for implementation of the scheme from July 1, 2014 as well as the recurring burden is being worked out. For the current year, the outgo is estimated at Rs 8,000-10,000 crore. In the current financial year, the government aims to restrict fiscal deficit at 3.9 percent of GDP. As per the fiscal consolidation road map, the fiscal deficit is to be brought down to 3 percent of GDP by 2017-18.

The CNX Nifty is currently trading at 7574.20, up by 15.40 points or 0.20% after trading in a range of 7539.50 and 7599.30. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 5.03%, Tata Power up by 3.56%, Yes Bank up by 3.04%, NTPC up by 2.62% and ICICI Bank up by 2.43%. On the flip side, Cipla down by 3.51%, Hindustan Unilever down by 3.49%, Cairn India down by 3.16%, Lupin down by 2.38% and Bharti Airtel down by 2.03% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 was down by 1.71%, Shanghai Composite down by 1.54%, Straits Times down by 0.68%, Jakarta Composite down by 0.42%, KOSPI Index down by 0.63% and FTSE Bursa Malaysia KLCI down by 0.22%. On the flip side, Taiwan Weighted was up by 0.19% and Hang Seng was up by 0.34%.