Benchmarks continue firm trade in late afternoon session

Indian equity benchmarks continued its firm trade in the late afternoon session on account of flurry of buying by investors in blue-chips available at an attractive level amid a firming trend at other Asian markets, tracking weekend gains at the US markets, which mainly influenced the sentiment. Traders were seen piling positions in Metal, Capital Goods and Realty sector stocks. In scrip specific development, Bank of Baroda was trading firm after the bank at the time of announcing Q3 December 2015 results stated that its management is confident the bank will make profit in Q4 March 2016. The bank posted a quarterly net loss of Rs 3342 crore, compared to profit of Rs 124 crore quarter-on-quarter. The loss was driven by a 225 percent increase in provisions, which rose from Rs 1,891 crore in the previous quarter to Rs 6,164 crore.

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 7,150 and 23,500 levels respectively. The market breadth on BSE was positive in the ratio of 1977:543 while 111 scrips remained unchanged.

The BSE Sensex is currently trading at 23574.80, up by 588.68 points or 2.56% after trading in a range of 23197.67 and 23622.64. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 3.52%, while Small cap index up by 3.59%.

The gaining sectoral indices on the BSE were Metal up by 9.63%, Capital Goods up by 6.72%, Realty up by 6.05%, PSU up by 5.50%, Oil & Gas up by 4.17%.

The top gainers on the Sensex were Tata Steel up by 13.11%, Larsen & Toubro up by 8.94%, SBI up by 8.39%, Coal India up by 7.83% and Adani Ports & Special Economic Zone up by 7.16%.

On the flip side, Bharti Airtel down by 2.23% and Hindustan Unilever down by 0.91% were the top losers.

Meanwhile, government has asked public sector firms cash-rich Coal India, National Aluminium Co (Nalco), NMDC and MOIL, among half a dozen PSUs, to buy back shares worth about Rs. 25,000 crore and pay additional dividend than the mandated 30 per cent of net profit or 30 per cent of government's equity holding, whichever is higher. The share buyback is being proposed as disinvestment target looks set to be missed for the sixth consecutive year and 16th time since the stake sale began in early 1990s.

Besides, Nalco has been asked to consider buying back 25 per cent shares while the world's largest coal producer CIL has been asked to consider 10 per cent buyback. A 10 per cent share buyback has also been proposed in case of MOIL, NMDC and India Renewable Energy Development Agency among others. The firms identified for the share buyback have a cumulative cash balance of over Rs. 78,000 crore. Cash-rich PSUs like Coal India has also been asked to issue bonus shares.

Nalco would have to shell out Rs. 2,023 crore for the share buyback, for a 10 per cent buyback NMDC would have to cough up Rs. 3,120 crore. Besides, Coal India would have to spend Rs. 19,170 crore, for a 10 per cent share buyback the same for MOIL would be Rs. 309 crore.

For the current fiscal year, the government so far has mobilised just Rs. 13,330 crore from sale of stakes in PSUs as against the budgeted target of Rs. 69,500 crore. So far the big PSUs like ONGC, IOC, Oil India, GAIL, BPCL, HPCL and NTPC have paid about Rs. 5,763 crore in interim dividend for 2015-16 fiscal. Coal India is yet to declare dividend.

The CNX Nifty is currently trading at 7168.75, up by 187.80 points or 2.69% after trading in a range of 7056.80 and 7182.80. There were 44 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 22.21%, Vedanta up by 17.94%, Tata Steel up by 13.63%, Hindalco up by 11.41% and Larsen & Toubro up by 8.94%.

On the flip side, Bharti Airtel down by 1.99%, Hindustan Unilever down by 1.22%, Idea Cellular down by 0.64%, HDFC down by 0.08% and Hero MotoCorp down by 0.05% were the top losers.

The Asian markets were trading mostly in green; Taiwan Weighted increased 3.51 points or 0.04% to 8,066.51, FTSE Bursa Malaysia KLCI increased 9.71 points or 0.59% to 1,653.45, Jakarta Composite increased 18.56 points or 0.39% to 4,732.96, KOSPI Index increased 26.92 points or 1.47% to 1,862.20, Hang Seng increased 598.56 points or 3.27% to 18,918.14 and Nikkei 225 increased 1069.97 points or 7.16% to 16,022.58.

On the other hand, Shanghai Composite decreased 17.3 points or 0.63% to 2,746.20.

The European markets were trading in green; France’s CAC increased 99.62 points or 2.49% to 4,094.68, Germany’s DAX increased 225.11 points or 2.51% to 9,192.62 and UK’s FTSE 100 increased 99.97 points or 1.75% to 5,807.57.