Benchmarks continue to trade firm in late morning session

After a robust start, Indian benchmark equity indices continue to trade in fine fettle in late morning deals on sustained buying activities by both funds and retail investors.  Sentiments remained up-beat as RBI surprised markets with a bigger-than-expected 0.50 per cent cut in repo rates to 6.75 per cent. The central bank also hiked limit for FPI investment in government bonds to 5 per cent of the outstanding stock by March, 2018, a move that will bring in an additional Rs. 1.2 lakh crore in G-Sec. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Some support also came with a report that India has become the top destination for FDI in the world. With $31 billion of foreign capital inflows, India has surpassed China and the US to take the pole position in attracting largest FDI in the first half of 2015. At present, Sensex and Nifty were trading above the crucial 25,950 and 7,850 levels respectively, with gains of over half a percent.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over 0.80%.

On the global front, Asian stock markets bounced higher Wednesday, led by gains in Japan where investors were buoyed by expectations for more economic stimulus. Traders are waiting for jobs data and the top U.S. central banker's remarks for clues about when the Federal Reserve will raise interest rates. Further, Wall Street eked out small gains on Tuesday, helped by a rebound in health care stocks. Back home, Indian rupee rose by 19 paise at 65.77 against the US Dollar in early trade after the Reserve Bank cut interest rates by 0.50 per cent on Tuesday.

Back on street, barring Banking, all the other BSE sectoral indices were trading in the green. Good buying was seen in Realty, Metal, FMCG and Teck stocks. In scrip specific development, shares of Eveready Industries have rallied after the Reserve Bank of India allowed foreign investors to invest up to 49% stake in the company under the Portfolio Investment Scheme. On the flip side, shares of Blue Star Infotech (BSIL) have declined after the company’s board decided to sell the entire information technology (IT) business of the company on a slump sale basis to Infogain.

The market breadth on BSE was positive, out of 2105 stocks traded, 1415 stocks advanced, while 606 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25969.97, up by 191.31 points or 0.74% after trading in a range of 25918.21 and 26044.60. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.89%, while Small cap index up by 0.97%.

The top gaining sectoral indices on the BSE were Realty up by 2.45%, Metal up by 2.13%, FMCG up by 1.37%, TECK up by 0.97% and Consumer Durables up by 0.85%, while Bankex down by 0.35% was the only losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 3.58%, Bharti Airtel up by 2.89%, Hindalco up by 2.79%, Hindustan Unilever up by 2.35% and Tata Motors up by 2.13%. On the flip side, GAIL India down by 1.70%, Axis Bank down by 1.10%, TCS down by 0.40%, SBI down by 0.33% and Vedanta down by 0.29% were the top losers.

Meanwhile, Government has approved 18 foreign direct investment (FDI) proposals amounting Rs 5,000 crore including Aegon Religare Life Insurance and Aditya Birla Nuvo on the recommendation of Foreign Investment Promotion Board (FIPB) which is headed by Economic Affairs Secretary Shaktikanta Das. The proposal of Aegon Religare Life Insurance, worth about Rs 560 crore was approved for increasing foreign partner stake in the joint venture. Out of a total of 31 proposals made by for foreign investments, only 18 were accepted as some proposals were rejected due to non-compliance of foreign investment policy.

Besides, FIPB also cleared FDI proposals of Sun Pharma Advanced Research, HDFC Capital Advisors and International Trade and Exhibitions India. However, five proposals were deferred including Reliance Globalcom. Meanwhile, 8 proposals were rejected including pharma firm Cipla which was rejected due to lack of required information. Also, the investment plans of Apollo Hospitals were rejected as it did not comply with the foreign investment policy.

India allows FDI in most of the sectors through automatic route but in certain segments considered sensitive for the economy and security the proposals have to be first cleared by FIPB. According to the data of Department of Industrial Policy and Promotion (DIPP), FDI inflows in August have registered an increase of 74% as compared to that of same period last fiscal. During 2014-15 fiscal, FDI grew 27 percent year-on- year to $30.93 billion compared to that of $24.29 billion in 2013-14.

The CNX Nifty is currently trading at 7888.05, up by 44.75 points or 0.57% after trading in a range of 7874.50 and 7924.25. There were 29 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 3.87%, Tata Steel up by 3.55%, Bharti Airtel up by 3.15%, Hindustan Unilever up by 2.52% and Hindalco up by 2.49%. On the flip side, Axis Bank down by 1.37%, Bank Of Baroda down by 1.26%, Kotak Mahindra Bank down by 1.24%, Tech Mahindra down by 1.08% and Yes Bank down by 1.07% were the top losers.

Asian markets were trading mostly in green, KOSPI Index was up by 0.76%, FTSE Bursa Malaysia KLCI up by 0.59%, Jakarta Composite up by 0.48%, Shanghai Composite up by 0.76%, Taiwan Weighted up by 0.17%, Hang Seng up by 1.69% and Nikkei 225 up by 2.96%. On the flip side, Straits Times was down by 0.1%.