Markets extend last session gains with a positive opening

Extending their northward journey for second consecutive day, Indian equity benchmarks have made a positive start and are trading higher by half a percent in early deals with frontline gauges surging above their crucial 25,800 (Sensex) and 7,900 (Nifty) levels amid firm global cues. The US markets ended higher led by gains in Apple shares after Warren Buffett's Berkshire Hathaway Inc in a regulatory filing disclosed that it holds a stake in Apple worth around $1 billion, while Asian markets were trading higher following the overnight rally on Wall Street and higher commodity prices. Crude oil prices rose further in Asian trades after hitting six-month highs overnight, indicating strong investors' sentiments. On the domestic front, Sentiment on the street improved with Finance Minister Arun Jaitley exuding confidence in getting the GST Bill passed in the upcoming monsoon session. Jaitley has said that he has spoken to the chief ministers of all states, including those ruled by the UPA and the Congress, and they are a “strong supporter” of the idea. The sentiments were further supported by Indian rupee appreciating 13 paise to 66.67 against the dollar in early trade on Tuesday at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks.

All the sectoral indices on the BSE were trading in fine fettle led by Oil & Gas, Realty, TECK, PSU and Bankex. The market breadth on BSE was positive in the ratio of 1043:507, while 66 scrips remained unchanged.

The BSE Sensex is currently trading at 25800.01, up by 146.78 points or 0.57% after trading in a range of 25741.19 and 25830.06. There were 24 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index gained 0.36%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.49%, Realty up by 1.03%, TECK up by 0.64%, PSU up by 0.64% and Bankex up by 0.57%, while there were no losers. 

The top gainers on the Sensex were Axis Bank up by 2.15%, ONGC up by 2.07%, HDFC up by 1.15%, Bharti Airtel up by 1.10% and ITC up by 0.94%. On the flip side, Hindustan Unilever down by 0.67%, Tata Steel down by 0.34%, Wipro down by 0.27%, HDFC Bank down by 0.21% and Adani Ports &Special down by 0.16% were the top losers.

Meanwhile, the Reserve Bank of India (RBI), in consultation with the Ministry of Finance, Government of India has proposed to permit investment by foreign portfolio investors (FPIs) in unlisted debt securities and securitised debt instruments. The central bank in a draft circular has said that FPIs can invest in the primary issues of non-convertible debentures/bonds by a public company issued in demat form. But, the relaxation would come with a condition that borrowing companies cannot use such bond proceeds for real estate activities, purchase of land, investing in capital market or on-lending to other entities. The custodian banks of FPIs shall ensure compliance with this condition based on an undertaking from the issuing company.

The draft also says that FPIs can also invest in select cluster of debt instruments passed on to other borrowers, known as 'Securitised Debt Instruments' in market parlance. It said that FPIs can invest in any certificate or instrument issued by a special purpose vehicle (SPV) set up for securitisation of asset/s where banks, financial institutions or non-banking finance companies are originators; and any certificate or instrument issued and listed in terms of the SEBI ‘Regulations on Public Offer and Listing of Securitised Debt Instruments, 2008’.

As per earlier rules, FPI were permitted to invest only in listed or to-be-listed debt securities, while investment in unlisted debt securities was permitted only in case of companies in the infrastructure sector. Investment by FPIs in securitised debt instruments was not permitted.

RBI has placed the draft circular implementing the proposal for comments/feedback. It was announced in the Union Budget 2016-17 that in order to aid in development of corporate bond market, investment basket of foreign portfolio investors (FPIs) will be expanded to include unlisted debt securities and pass through securities issued by securitisation special purpose vehicles (SPVs).

The CNX Nifty is currently trading at 7907.80, up by 47.05 points or 0.60% after trading in a range of 7891.20 and 7914.10. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.22%, BPCL up by 2.18%, Axis Bank up by 2.15%, Yes Bank up by 1.22% and HDFC up by 1.20%. On the flip side, Eicher Motors down by 0.90%, Bosch down by 0.85%, Bank Of Baroda down by 0.77%, Hindustan Unilever down by 0.67% and Tata Motors - DVR down by 0.56% were the top losers.

Asian markets were trading mostly in green, FTSE Bursa Malaysia KLCI increased 8.72 points or 0.54% to 1,629.93, Taiwan Weighted increased 35.32 points or 0.44% to 8,102.92, Hang Seng increased 73.72 points or 0.37% to 19,957.67 and Nikkei 225 increased 130.09 points or 0.79% to 16,596.49

On the flip side, Shanghai Composite decreased 10.42 points or 0.37% to 2,840.44, Jakarta Composite decreased 5.81 points or 0.12% to 4,725.75 and KOSPI Index decreased 0.99 points or 0.05% to 1,966.92.