Benchmarks extend gains; trade near intra-day high level

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high level on increased buying by funds and retail investors, tracking a rally at the other Asian markets following overnight gains at Wall Street. Back home, the government seems to be going on overdrive announcing various decisions including cabinet nod for 10 percent stake sale in Coal India, IPO of Cochin Shipyards, and clearance of 3% interest subsidy for exports. CCEA also empowered the National Highways Authority of India (NHAI) to revive 34 stalled projects. Direct subsidy to farmers for sugarcane sold to sugar mill was among the sweeteners announced that has supported the markets. The broader markets also gained strength with the BSE Midcap and Smallcap indices rising about a percent each. Sentiments remained up-beat with Chief Economic Adviser Arvind Subramanian’s statement that Inflation is completely under control and it is well within the target of the Reserve Bank. Besides, the rupee recovered by 24 paise to 66.06 against the dollar in early trade on increased selling of the US currency by exporters and banks, also supported upside.

On the global front, Asian share markets were trading mostly in green as investors welcomed new hints that the Federal Reserve could begin to raise interest rates as early as next month. Back on street, all BSE sectoral indices were trading in the green. Among them, Auto index gained the most by 1.42 per cent, followed by IT 1.27 per cent, Capital Goods 1.21 per cent and TECK 1.09 per cent. Meanwhile, shares of railway-related companies were trading higher after the government approved Rs 8,349 crore investments on rail freight lines in three states.

In scrip specific development, shares of Hero Motocorp surged after the company further consolidated its leadership, clocking over 1 million (10 lakh) units in retail sales during the festive season this year. On the other hand, shares of Dr Reddy’s Laboratories have dipped after the company has received a warning letter from the US Food and Drug Administration (US FDA) over quality control issues at three of its manufacturing facilities.

The market breadth on BSE was positive, out of 2215 stocks traded, 1512 stocks advanced, while 555 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25726.40, up by 243.88 points or 0.96% after trading in a range of 25603.10 and 25739.00. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.87%, while Small cap index gained 0.98%.

There were no losers on the BSE Sectoral front, however, prominent gainers were Auto up by 1.42%, IT up by 1.27%, Capital Goods up by 1.21%, TECK up by 1.09% and Bankex up by 1.07%.

The top gainers on the Sensex were Hero MotoCorp up by 3.36%, Bajaj Auto up by 2.40%, Maruti Suzuki up by 1.90%, ICICI Bank up by 1.83% and Larsen & Toubro up by 1.46%. On the flip side, Dr. Reddys Lab down by 2.77%, Sun Pharma down by 0.63%, Coal India down by 0.51%, Hindalco down by 0.39% and NTPC down by 0.04% were the top losers.

Meanwhile, the government has approved six foreign direct investment (FDI) proposals amounting Rs 1,810 crore based on the recommendations of Foreign Investment Promotion Board (FIPB) in its meeting held on October 30, 2015, including that of IIFL Holdings- the largest amounting to Rs 1,810.25 crore. The approval of IIFL Holdings, a NBFC company was sought for increasing the foreign equity from 50.16% to 80% by way of issuing shares to FIIs.

Among other proposals, FIPB also cleared proposals of Agile Electric Sub Assembly from manufacturing sector, Sharekhan and SeQuent Scientific. These proposals, however, will not involve any inflow of foreign investment and have more to do with restructuring of businesses. Further, it also cleared proposals of the US-based Monsoon Capital the Alternative Investment Trust (AIF) with investment of Rs 10 crore, while the proposal of Serap India of the manufacturing sector involves investment of Rs 25 lakh.

However, FIPB rejected proposal of a NBFC Volkswagen Finance which sought approval with 100% existing foreign equity for investment in Indian government treasury bills and / or Indian government securities and / or liquid mutual funds and / or high quality corporate debt securities.

FDI is permitted in most of the sectors through automatic route, but the segments which are considered sensitive for economy need to be first cleared from FIPB. The FIPB can recommend foreign investment proposals of up to Rs 3,000 crore to the finance minister for approval and the proposals worth above that are referred to CCEA.

The CNX Nifty is currently trading at 7803.35, up by 71.55 points or 0.93% after trading in a range of 7765.45 and 7809.55. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.27%, Bajaj Auto up by 2.59%, Tech Mahindra up by 2.27%, Zee Entertainment up by 2.00% and Maruti Suzuki up by 1.99%. On the flip side, Dr. Reddys Lab down by 2.51%, Idea Cellular down by 2.26%, Coal India down by 0.60%, Sun Pharma down by 0.58% and Hindalco down by 0.39% were the top losers.

Most of the Asian markets were trading in green barring Shanghai Composite which was tad lower by 0.04%. On the other hand, FTSE Bursa Malaysia KLCI was up by 0.15%, KOSPI Index up by 0.94%, Jakarta Composite up by 0.42%, Taiwan Weighted up by 1.15%, Nikkei 225 up by 1.18% and Hang Seng was up by 1.16%.