Benchmarks trade in fine fettle in noon deals

Indian equities have maintained their upward journey after a massive run-up in previous session ahead of the futures & options (F&O) expiry for May series contracts later today. The equities have held on to their gains without any jitters of profit booking carrying forward a strong consolidation in noon deals. Sentiments remained bullish with key gauges recapturing their crucial 26,000 (Sensex) and 7,950 (Nifty) bastions. Domestic sentiment was buoyed as oil advanced to $50 a barrel for the first time this year as US industry data showed a decline in stockpile. The G7 summit in Japan to take stock of the global economy also infused a sense of confidence. Appreciation in Indian rupee too aided sentiments. The rupee firmed up by 4 paise to 67.29 against the dollar in noon deals on increased selling of the US currency by exporters and banks.

However, Asian markets were trading mostly in red at this point of time with Chinese market edging lower with sentiment frail after a series of disappointing economic data earlier this month and fears that policymakers may be taking a more cautious stance on further stimulus as debt levels grow. Back home, Capital goods index surged as government approved the country’s first ‘National Capital Goods Policy’, which seeks to treble the production of capital goods in 10 years to Rs 7,50,000 crore and raise employment in the sector almost four times to 30 million. Shares of oil exploration and production companies rose as crude oil prices gained.

The BSE Sensex is currently trading at 26064.79, up by 183.62 points or 0.71% after trading in a range of 25941.51 and 26069.52. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index up by 0.42%.

The gaining sectoral indices on the BSE were Capital Goods up by 6.67%, Auto up by 0.62%, Power up by 0.60%, Bankex up by 0.53%, IT up by 0.48% while, Realty down by 0.18%, Metal down by 0.17%, Consumer Durables down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 10.82%, BHEL up by 1.96%, Adani Ports &Special up by 1.78%, SBI up by 1.57% and ONGC up by 1.57%. On the flip side, Sun Pharma down by 1.18%, HDFC down by 1.01%, Tata Steel down by 0.65%, Asian Paints down by 0.63% and Cipla down by 0.47% were the top losers.

Meanwhile, the Securities and Exchange Board of India (Sebi) has announced to put in place stringent norms for high-frequency trades along with higher penalties for misuse, initiate strong action against auditors for lapses and expressed hope that P-Note users will start directly investing in the Indian market. Outlining the priorities for 2016-17, Sebi chairman U.K. Sinha said the regulator will also significantly reduce the number of listed entities over the course of this year and is planning to have an online platform for sale and purchase of mutual funds.

Sinha raising concern over misuse of the high-frequency or algo trade, said a strong set of norms will be in place in three to four months to ensure fair opportunity for trading entities. He said that “While Sebi is among the first regulators to have some kind of regulations in place on HFT (high- frequency trading), there is a need to make it stronger. We are working on that. It is not only about misuse of algo trade and co-location facilities, but also about fairness, and we are trying to address the issue. We are now looking to increase penalty for its misuse.” The regulator will soon float a discussion paper in this regard.

The watchdog plans to seek delisting of over 4,200 listed companies whose shares are not being traded actively, while promoters refusing to provide an exit opportunity to investors will face strict penal action.  As part of efforts to further strengthen the domestic markets and protect investor interests, Sebi is also eyeing more strong regulations for credit rating agencies, which, among others, will require such entities to disclose reasons for their actions.

Sinha close on the heels of making norms stricter for Participatory Notes (P-Notes), ruled out any concession for hedge funds with riskier profile in Indian markets, and expressed hope that P-Note users will start directly investing in the Indian market. He noted that their share in foreign portfolio investments has already fallen to a record low of 9.3%.

The CNX Nifty is currently trading at 7982.30, up by 47.40 points or 0.60% after trading in a range of 7948.50 and 7986.35. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 10.47%, Idea Cellular up by 4.52%, Ambuja Cement up by 2.65%, BHEL up by 2.00% and ONGC up by 1.71%. On the flip side, Bharti Infratel down by 1.63%, Sun Pharma down by 1.06%, HDFC down by 1.04%, Grasim Industries down by 1.04% and Tata Steel down by 0.82% were the top losers.

Asian markets were trading in red; Hang Seng decreased 23.24 points or 0.11% to 20,344.81, Jakarta Composite shed 8.32 points or 0.17% to 4,764.65, KOSPI Index slipped 3.45 points or 0.18% to 1,957.06, Taiwan Weighted fell 2.08 points or 0.02% to 8,394.12 and Shanghai Composite was down by 1.15 points or 0.04% to 2,813.93.

On the flip side, FTSE Bursa Malaysia KLCI rose 0.69 points or 0.04% to 1,631.65 and Nikkei 225 was up by 15.11 points or 0.09% to 16,772.46.