Benchmarks trade slightly above water in noon deals

Erasing most of their initial gains, Indian equity benchmarks somehow managing to keep their head above water in noon deals as traders opted to book profit at higher levels ahead of Index of Industrial Production data for January to be released later in the day. Depreciation in Indian rupee dampened sentiments. The rupee depreciated 11 paise to 67.18 against the US currency in early trade today due to higher demand for the dollar from importers. However, some support came with IMF's financial counselor Jose Vinals statement that India needs to address the stress emanating from leveraged corporate balance sheets and asset quality woes of state-run banks to sustain the recovery process, even as the country is best placed among emerging markets.

On the global front, most of the Asian equity indices, paring their initial losses, recovered from day’s low and entered into green terrain as investors opted to buy beaten down but fundamentally strong stocks. Back home, banking stocks remained under pressure, as the Credit rating agency Crisil downgraded eight PSBs including Bank of India and Canara Bank, following deterioration in their asset quality and also revised the outlook on five of them to negative. However, the realty sector stocks remained on buyers’ radar with Rajya Sabha passing the much-awaited real estate bill. According to the bill, builders will have to deposit a minimum of 70% collections from buyers in a separate escrow account to cover cost of construction and land.

The BSE Sensex is currently trading at 24657.40, up by 34.06 points or 0.14% after trading in a range of 24552.26 and 24817.80. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.01%, while Small cap index down by 0.26%.

The top gaining sectoral indices on the BSE were FMCG up by 0.77%, Oil & Gas up by 0.47%, Energy up by 0.42%, IT up by 0.38% and Realty up by 0.31%, while Metal down by 0.81%, Basic Materials down by 0.56%, Bankex down by 0.45%, PSU down by 0.36% and Power down by 0.35% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 1.79%, TCS up by 1.36%, ITC up by 0.90%, Hindustan Unilever up by 0.78% and Dr. Reddys Lab up by 0.75%. On the flip side, Tata Steel down by 1.38%, ONGC down by 0.92%, Sun Pharma down by 0.77%, Mahindra & Mahindra down by 0.57% and NTPC down by 0.51% were the top losers.

Meanwhile, state-owned oil marketing companies (OMCs) have said that the central government’s announcement on providing liquefied petroleum gas (LPG) connections to 50 million households below the poverty line (BPL) under Pradhan Mantri Ujjwala Yojana scheme in three years mean a lot of challenge. The Cabinet Committee on Economic Affairs has approved the scheme - Pradhan Mantri Ujjwala Yojana. It has been allocated Rs 8,000 crore.

The scheme would provide financial support of Rs 1,600 for each LPG connection. The identification of eligible families, as proposed in the Budget for 2016-17, will be in consultation with states. Further, the investments would be required on various fronts LPG import facilities, logistics and additional bottling. OMCs will have to make additional investments to ensure that the targets are met in three years.

Out of the three OMCs, Hindustan Petroleum Corporation (HPC) has said that it would be spending around Rs 2,000 crore in setting up an LPG import facility (Rs 500 crore) and seven to 10 more bottling units for Rs 700-1,000 crore. The company is looking for the land to build a new LPG bottling plant of 60 million tonnes (mt) per annum. Bharat Petroleum Corporation (BPC) plans to build an LPG import terminal at West Bengal’s Haldia, for Rs 800 crore. The company has acquired 35 acres for the purpose and plans to complete the project in three years.  BPC has infrastructure in the western and southern regions but the problem will be in the eastern region. Indian Oil Corporation, the nation’s largest OMC, is constructing an LPG import facility of 600,000 tonnes per annum at Paradip, Odisha, for Rs 690 crore.

The CNX Nifty is currently trading at 7491.40, up by 5.25 points or 0.07% after trading in a range of 7460.60 and 7543.95. There were 20 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 1.68%, Bosch up by 1.46%, Zee Entertainment up by 1.38%, BPCL up by 1.30% and TCS up by 1.21%. On the flip side, Kotak Mahindra Bank down by 1.71%, Tata Steel down by 1.57%, Tech Mahindra down by 1.44%, Vedanta down by 1.36% and Hindalco down by 1.13% were the top losers.

Asian equity indices were trading mostly in green; KOSPI Index rose 2.08 points or 0.11% to 1,971.41, FTSE Bursa Malaysia KLCI gained 4 points or 0.24% to 1,694.91, Taiwan Weighted increased 45.44 points or 0.52% to 8,706.14, Nikkei 225 jumped 86.52 points or 0.51% to 16,938.87 and Hang Seng was up by 161.93 points or 0.81% to 20,146.35.

On the flip side, Shanghai Composite decreased 22.74 points or 0.81% to 2,781.99 and Jakarta Composite was down by 4.61 points or 0.1% to 4,788.59.