Benchmark indices trade off day’s high; Nifty holds 7100 mark

Key benchmark indices are trading off the day’s high in late morning trade as investors opted to take some of their profit at higher levels. However, markets still managed to trade above their crucial 7,100 (Nifty) and 23,400 (Sensex) bastions on hopes that Reserve Bank Governor Raghuram Rajan will cut repo rate. Sentiments got a boost after Finance Minister Arun Jaitley retained FY17 fiscal deficit target at 3.5 per cent of GDP despite increasing expenditure for rural and infrastructure spending.  Finance Minister has assured that the development agenda will not be compromised and a committee will be set up to review the working of fiscal responsibility and Budget management.  Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Hardening further for the third straight day, Indian rupee rose 13 paise against the dollar in morning trade on sustained selling of the US currency by banks and exporters. Some support also came with the report that the growth in the eight core sectors jumped to a three-month high of 2.9 per cent in January due to sharp pick-up in coal, cement and electricity generation. Furthermore, manufacturing business conditions in India continued to improve, with new orders, exports, output and purchasing activity all rising in February. At 51.1 in February, unchanged from January's reading, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI), pointed to a second consecutive monthly improvement in business conditions across the sector.

On the global front, Asian markets were trading mostly in green, with sentiment bolstered by China's monetary easing and downbeat manufacturing and service surveys that raised hopes of additional measures, although lackluster U.S. and European data kept alive concerns about global growth momentum. Meanwhile, Wall Street shrugged off the higher oil prices and finished lower on Monday, with MSCI's global stocks index logging its fourth straight losing month. Downbeat US data revived concerns about the strength of the economy. Contracts to buy previously owned US homes fell to their lowest level in a year in January, while the Chicago Purchasing Manager Index - a leading indicator of the US economy - contracted to 47.6 in February.

Back home, all BSE sectoral indices were trading in the green. Among them, FMCG index gained the most by 3.91 per cent, followed by IT 2.25 per cent, TECK 2.32 per cent and Banking 2.20 per cent. In scrip specific development, Shares of Larsen & Toubro (L&T) have gained after the company’s construction arm -- L&T Constructions won orders worth Rs 2,213 crore across its various businesses. Furthermore, BEML has rallied after the company has bagged order valued at Rs 900 crore for the supply of metro coaches to Kolkata East-West Metro Line.

The market breadth on BSE was positive, out of 2042 stocks traded, 1583 stocks advanced, while 391 stocks declined on the BSE. 

The BSE Sensex is currently trading at 23480.72, up by 478.72 points or 2.08% after trading in a range of 23133.18 and 23549.95. 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 1.34%, while Small cap index up by 1.70%.

The gaining sectoral indices on the BSE were FMCG up by 3.91%, IT up by 2.55%, TECK up by 2.32%, Bankex up by 2.20%, Auto up by 1.94%

The top gainers on the Sensex were ITC up by 8.32%, ICICI Bank up by 5.26%, Maruti Suzuki up by 4.02%, GAIL India up by 3.99% and Hero MotoCorp up by 3.71%. On the flip side, ONGC down by 1.49%, Tata Steel down by 0.76%, HDFC down by 0.52%, Hindustan Unilever down by 0.46% and Dr. Reddys Lab down by 0.31% were the top losers.

Meanwhile, with an aim to attract foreign investments, Finance Minister Arun Jaitley in budget FY17 has proposed a significant liberalization of Foreign Direct Investment (FDI) norms in the sectors such as insurance, pension, ARC’s and stock exchanges. It was announced that the basket of eligible FDI instruments will be expanded to include hybrid instruments subject to certain conditions.

FDI in insurance and pension sectors will be allowed through automatic route for up to 49 per cent from the earlier 26 per cent subject to the guidelines on Indian management and control, to be verified by the regulators. Besides, 100 per cent FDI in Asset Reconstruction Companies (ARCs) will be permitted through automatic route from 49 per cent earlier.

Foreign portfolio investors (FPIs) will be allowed up to 100 per cent of each tranche in securities receipts issued by ARCs subject to sectoral caps. Further, the existing 24 per cent limit for investment by FPIs in central public sector enterprises, other than banks, listed in stock exchanges, will be increased to 49 per cent to obviate the need for prior approval of government for increasing the foreign portfolio investment.

Jaitley further stated that the investment limit for foreign entities in Indian stock exchanges will be enhanced to 15 per cent from 5 per cent on par with domestic institutions. This will improve global competitiveness of Indian stock exchanges and accelerate adoption of best-in-class technology and global market practices.  Additionally FDI will also be allowed beyond the 18 specified NBFC activities in the automatic route in other activities which are regulated by financial sector regulators. Earlier, the government has relaxed the FDI policy in sectors, including defence, railway, medical devices and civil aviation.

The CNX Nifty is currently trading at 7131.75, up by 144.70 points or 2.07% after trading in a range of 7035.10 and 7151.65. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were ITC up by 8.44%, ICICI Bank up by 5.29%, Maruti Suzuki up by 4.27%, Zee Entertainment up by 4.12% and Hero MotoCorp up by 3.76%. On the flip side, ONGC down by 1.52%, Cairn India down by 1.02%, Tata Steel down by 0.88%, Hindustan Unilever down by 0.52% and HDFC down by 0.49% were the top losers.

Asian markets were trading mostly in green, Shanghai Composite was up by 0.2%, Jakarta Composite up by 0.05%, Nikkei 225 up by 0.41%, FTSE Bursa Malaysia KLCI up by 0.47%, Taiwan Weighted up by 0.85% and Hang Seng up by 0.55%. On the flip side, KOSPI Index was down by 0.18%.