Benchmarks trades firm; Sensex surpasses 25,600 mark

Indian equity markets added gains and continued their firm trade in the late afternoon session on account of buying in front line blue chip counters taking cues from global counterparts. The sentiments also got some support after credit rating agency Fitch Ratings stated that India is better placed than many of its peers after the American central bank, the US Federal Reserve, raised its key interest rates. Traders were seen piling position in Metal, Power and Capital Goods sector stocks. In the scrip specific development, Aurobindo Pharma was trading firm after receiving approval from the US Food & Drug Administration (USFDA) for its anti-diarrheal and anti-inflammatory drugs. InterGlobe Aviation was trading in green after foreign brokerage firm initiated coverage on the company with an equal weight rating. It expects IndiGo to post strong earnings growth in near-term stating that it is among the world’s best run airlines and crude oil prices at a seven-year low to give additional boost.

On the global front, the Asian markets were trading in green, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,750 and 25,600 levels respectively. The market breadth on BSE was positive in the ratio of 1737:788 while 208 scrips remained unchanged.

The BSE Sensex is currently trading at 25608.67, up by 114.30 points or 0.45% after trading in a range of 25448.32 and 25659.32. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.09%, while Small cap index up by 1.27%.

The gaining sectoral indices on the BSE were Metal up by 1.92%, Power up by 0.96%, Capital Goods up by 0.86%, Realty up by 0.76%, PSU up by 0.74%.

The top gainers on the Sensex were Tata Steel up by 3.37%, Vedanta up by 1.85%, Hindalco up by 1.72%, SBI up by 1.56% and Sun Pharma up by 1.51%.

On the flip side, ONGC down by 1.79%, Axis Bank down by 0.77%, Lupin down by 0.67%, ITC down by 0.34% and Maruti Suzuki down by 0.17% were the top losers.

Meanwhile, considering the high demand of coal in the country than the current level of production and supply, the Cabinet Committee on Economic Affairs (CCEA) has given its approval for allotment of coal blocks to central and state public sector undertakings (PSUs) for the sale of the fossil fuel mainly to medium, small and cottage, under the provisions of the Coal Mines (Special Provisions) Act, 2015. This has ended the 41-year-old monopoly of the central government over mining and sale of coal.

This move is expected to improve domestic production of coal in order to meet growing demand of the economy, potentially cutting down imports. The move is likely to benefit the mineral-rich states to earn surplus revenue, which were until now earning royalty from private companies mining coal for captive use. Currently, states are allotted coal blocks but with specified end-use such as power production, steel and iron production etc.

The coal bearing States shall be getting additional revenue from such coal mines equal to the amount of royalty on the quantity of coal produced on a monthly basis during the lease period/life of the mine as well as one time upfront payment which is 10 percent of the intrinsic value of coal in the mine in three installments in the first year of allotment. It is expected that the incremental coal produced from such coal mines would cater to the unmet demand of the coal in the country, especially of medium, small and micro industries and bridge the gap between demand and supply considerably.

In the last fiscal year 2014-15, the domestic production of coal was 612.4 million tonnes (Provisional) ,as against a total consumption of 825.6 million tonnes (provisional).The gap between consumption and domestic supply is met through imports. Due to sustained efforts for increase in domestic production, import of coal that was showing positive growth since 2011-12, registered a negative growth of 12.2 percent during April-November 2015. However, the gap between the demand and the supply continues to be, large.

The CNX Nifty is currently trading at 7786.85, up by 35.95 points or 0.46% after trading in a range of 7737.55 and 7800.15. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.74%, Tata Power up by 3.39%, Yes Bank up by 3.07%, Hindalco up by 2.16% and Vedanta up by 1.78%.

On the flip side, Bosch down by 1.99%, ONGC down by 1.90%, Cairn India down by 1.49%, Idea Cellular down by 1.00% and Axis Bank down by 0.95% were the top losers.

The Asian markets were trading in green; KOSPI Index increased 8.56 points or 0.43% to 1,977.96, FTSE Bursa Malaysia KLCI increased 19.04 points or 1.17% to 1,653.17, Jakarta Composite increased 51.57 points or 1.15% to 4,535.02, Shanghai Composite increased 63.81 points or 1.81% to 3,580.00, Taiwan Weighted increased 135.01 points or 1.65% to 8,319.67, Hang Seng increased 170.85 points or 0.79% to 21,872.06 and Nikkei 225 increased 303.65 points or 1.59% to 19,353.56.

The European markets were trading in green; UK’s FTSE 100 increased 84.76 points or 1.4% to 6,145.95, France’s CAC increased 98.33 points or 2.13% to 4,723.00 and Germany’s DAX increased 216.63 points or 2.07% to 10,685.89.