Markets continue to trade firm in early noon session

Indian equity benchmarks continued to trade firm in early noon session on the back of buying in front line blue chips counters amid firm global cues. Sentiments were up beat after India’s January manufacturing PMI expanded to 51.1 against 49.9 in the month of December. Investors also got some support with the statement of NITI Aayog Vice-Chairman Arvind Panagariya that India is expected to get on to a double-digit growth in the next 2-3 years if reform process continues. However, investors remained cautious ahead of RBI monetary policy review tomorrow. Meanwhile, broader markets are outperforming with the BSE Midcap and Smallcap indices trading up by 0.60% and 0.81% respectively. Market breadth was positive with 1498 gainers and 874 losers on the BSE.

On the global front, Asian markets were trading mixed, with major indices in Japan and South Korea extending gains after the Bank of Japan's (BOJ) surprise move to adopt negative interest rates on Friday sent stocks higher from Tokyo to New York. Back home, both the sensex and nifty were trading above the crucial 24,900 and 7,550 level, respectively. In scrip specific development, shares of L&T were trading higher after the engineering major reported a 19% increase in consolidated net profit for the third quarter on the account of improved execution of projects in its overseas.

The BSE Sensex is currently trading at 24932.02, up by 61.33 points or 0.25% after trading in a range of 24846.24 and 25002.32. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.60%, while Small cap index up by 0.81%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.41%, FMCG up by 0.97%, IT up by 0.94%, TECK up by 0.94% and Realty up by 0.46%, while Bankex down by 0.61%, PSU down by 0.48%, Power down by 0.19%, Auto down by 0.08% and Oil & Gas down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 4.32%, Adani Ports & Special Economic zone up by 3.41%, Cipla up by 2.95%, Asian Paints up by 1.92% and Bharti Airtel up by 1.76%. On the flip side, ICICI Bank down by 3.02%, Maruti Suzuki down by 2.38%, SBI down by 2.08%, Axis Bank down by 1.56% and Sun Pharma down by 1.20% were the top losers.

Meanwhile, government has raised excise duty on petrol and diesel, the third increase in duties in the month of January, to mop up over Rs 3,200 crore in additional revenue, netting in all Rs 17,000 crore in three months. The duty on petrol has been raised by Re 1 per litre, while that on diesel by Rs 1.50 per litre. The hike did not result in any increase in retail selling price of the two fuels as it was adjusted against the reduction in rates that may have been possible because of the slide in international oil prices. This is the third hike in excise duty in January as the government made use of the slump in oil prices to shore up resources at a time when its disinvestment kitty is likely to fall way short of target.

As per the notification of the Central Board of Excise and Customs (CBEC), the total levy on unbranded petrol will be Rs 21.48 per litre as against Rs 20.73 currently, after including additional and special excise duty. On unbranded or normal diesel, total excise duty after including special excise duty will be Rs 17.16 per litre as compared to Rs 15.66 at present.  Basic excise duty on unbranded or normal petrol has been increased from Rs 8.48 per litre to Rs 9.48 and the same on unbranded diesel from Rs 9.83 to Rs 11.33. The basic excise duty on branded petrol has been raised from Rs 9.66 per litre to Rs 10.66 and the same on branded diesel from Rs 12.19 to Rs 13.69 per litre.

The three hikes in excise duty in January take to five the number of times tax rates on the two fuel have been raised this fiscal. If the government would not have raised these duties, consumer price of petrol and diesel should have been lower by 11.77 a litre and Rs 13.30 per litre, respectively. In excise collections from the petroleum sector in 2014-15, the government had collected Rs 99,184 crore, which stood at Rs 33,042 crore in the first quarter of the current fiscal.

Prior to this, the government had on January 16 hiked the excise duty on petrol by Rs 0.75 per litre and Rs 2 on diesel to mop up over Rs 3,700 crore in additional revenue. Before that the government on January 2 had hiked the excise duty on petrol by Rs 0.37 per litre and Rs 2 on diesel to mop up a little less than Rs 4,400 crore.

The CNX Nifty is currently trading at 7586.90, up by 23.35 points or 0.31% after trading in a range of 7556.80 and 7600.45. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 4.40%, Adani Ports &Special up by 3.49%, Cipla up by 2.97%, Tech Mahindra up by 2.65% and Ambuja Cement up by 2.51%. On the flip side, ICICI Bank down by 2.98%, Maruti Suzuki down by 2.34%, SBI down by 2.06%, Axis Bank down by 1.69% and Vedanta down by 1.53% were the top losers.

Asian markets were trading mixed; KOSPI Index increased 8.53 points or 0.45% to 1,920.59, Taiwan Weighted increased 11.75 points or 0.14% to 8,156.96 and Nikkei 225 increased 359.33 points or 2.05% to 17,877.63, while Hang Seng decreased 82.72 points or 0.42% to 19,600.39, Shanghai Composite decreased 36.78 points or 1.34% to 2,700.82 and Jakarta Composite decreased 26.96 points or 0.58% to 4,588.21.