Benchmarks continue firm trade in late afternoon session

Indian equity benchmarks continued its firm trade in the late afternoon session on account of buying in front line blue chip counters taking cues from global counterparts. The sentiments were on optimistic note as Finance Minister Arun Jaitley expressed the hope of passage of the Constitutional Amendment Bill for the Goods and Services Tax and the Insolvency Code in the forthcoming Budget Session of Parliament. He sought to play down worries on the government’s public debt, saying it’s in a comfortable position and the overall liabilities of the Centre are on a medium-term declining trajectory. Traders were seen piling position in Capital Goods, Consumer Durables and Metal sector stocks. Pharma stocks were trading under pressure after the United States government reportedly made it mandatory for Active Pharmaceutical Ingredients (API) to be manufactured locally. This decision is likely to significantly impact Indian pharmaceutical exporters as it will impact drug exports. In scrip specific development, Hexaware Technologies was trading firm as the company has reported Q4 December 2015 earning after trading hours yesterday. On a consolidated basis, the company’s net profit rose 22.8% to Rs 393.20 crore on 21% increase in revenue to Rs 3123.50 crore in the year ended December 2015 over the year ended December 2014.

On the global front, the Asian markets were trading mostly in green while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,400 and 24,300 levels respectively. The market breadth on BSE was positive in the ratio of 1308:1148 while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 24382.12, up by 158.80 points or 0.66% after trading in a range of 24279.21 and 24514.01. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was up by 0.23%, while Small cap index down by 0.01%.

The gaining sectoral indices on the BSE were Capital Goods up by 2.32%, Consumer Durables up by 1.77%, Metal up by 1.56%, IT up by 1.40%, TECK up by 1.27%.

The top gainers on the Sensex were ONGC up by 3.07%, Larsen & Toubro up by 2.94%, Asian Paints up by 2.42%, Infosys up by 2.41% and Adani Ports & Special Economic Zone up by 2.41%.

On the flip side, Lupin down by 2.92%, NTPC down by 2.21%, GAIL India down by 2.12%, Cipla down by 1.60% and SBI down by 1.60% were the top losers.

Meanwhile, in order to mobilize resources for undertaking various rail infrastructure projects in States, the Union Cabinet has approved formation of joint ventures companies between Indian railways and the state governments. The Cabinet chaired by Prime Minister Narendra Modi has decided that the joint venture companies would be formed with equity participation of ministry of railways and concerned state governments. Each joint venture would have an initial paid up capital of Rs 100 crore based on the size of projects. The Railway Ministry’s initial paid-up capital will be limited to Rs 50 crore for each State. Further, infusion of fund/equity for the purpose of the projects shall be done after approval of the project and its funding at the level of appropriate competent authority.

With a view of  growing demands for railway lines in various states and huge requirement of funds to execute them, JV companies will be now responsible for identifying projects, land acquisition and possible financing in addition to government funding and also monitoring.

Joint venture further can also form project-specific SPVs with equity holding by other shareholders like banks, ports, public sector undertakings, mining companies etc. This move will ensure greater participation of States in implementation of railway projects both in terms of financial participation and decision making process. This will also facilitate faster statutory approvals and land acquisition. Besides helping passengers, cement, steel and power plants would also get the necessary rail link for transporting raw material and finished products.

The CNX Nifty is currently trading at 7420.15, up by 58.35 points or 0.79% after trading in a range of 7382.55 and 7457.05. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 7.79%, Cairn India up by 6.51%, Tata Power up by 3.77%, Hindalco up by 3.38% and ONGC up by 3.19%.

On the flip side, Lupin down by 2.79%, Idea Cellular down by 2.56%, GAIL India down by 2.40%, Yes Bank down by 2.15% and NTPC down by 2.02% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 22.02 points or 1.35% to 1,655.32, KOSPI Index increased 25.59 points or 1.35% to 1,916.26, Shanghai Composite increased 41.78 points or 1.53% to 2,781.02, Jakarta Composite increased 66.43 points or 1.45% to 4,662.54 and Hang Seng increased 191.5 points or 1.01% to 19,183.09.

On the other hand; Nikkei 225 decreased 146.26 points or 0.85% to 17,044.99.

The European markets were trading in green; UK’s FTSE 100 increased 63.17 points or 1.08% to 5,900.31, France’s CAC increased 19.91 points or 0.47% to 4,246.87 and Germany’s DAX increased 57.68 points or 0.61% to 9,492.50.