Firm trade prevails in late afternoon session

Indian equity benchmarks continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters post RBI policy. The Reserve Bank of India (RBI) kept key interest rates steady which was on expected lines and was discounted by market participants. Some additional buying also came after India Meteorological Department (IMD) stated that monsoon is strengthening over the Arabian Sea and there have been favorable developments in the last 48 hours for bountiful rains in India. Traders were seen piling position in Realty, Bankex and FMCG sector stocks. Hectic buying activity was witnessed in metal stocks amid a global rally in base metal prices after the US dollar fell to a three-week low against a basket of global currencies. In scrip specific development, Shreyas Shipping & Logistics was trading firm as the company entered into a Vessel Sharing Arrangement (VSA) with Shipping Corporation of India (SCI) on two of the services connecting East coast of India and vice versa along with Persian Gulf with addition of new ports commencing with effect from June 09, 2016. Alphageo (India) was locked at upper circuit limit after it was issued various Letters of Award (LoA) of contracts by ONGC for acquisition of 2D seismic Data in un-appraised on land areas of Indian Sedimentary Basins of India as a part of the National Seismic Program by March 2019.

On the global front, the Asian markets were trading in green while the European markets traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,250 and 27,000 levels respectively. The market breadth on BSE was positive in the ratio of 1479:991 while 135 scrips remained unchanged.

The BSE Sensex is currently trading at 27054.68, up by 277.23 points or 1.04% after trading in a range of 26829.53 and 27082.41. There were 30 stocks advancing against 0 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index up by 1.03%.

The gaining sectoral indices on the BSE were Realty up by 1.84%, Bankex up by 1.78%, FMCG up by 1.53%, Capital Goods up by 1.48% and Metal up by 1.33%.

The top gainers on the Sensex were ICICI Bank up by 3.80%, SBI up by 3.44%, Hindustan Unilever up by 2.00%, ITC up by 1.97% and Larsen & Toubro up by 1.94%

Meanwhile, promising a transparent regulatory regime and greater ease of doing business, Union Oil Minister Dharmendra Pradhan kicked off the first road show for auctioning 46 discovered small oil and gas fields. He expressed confidence of getting good response for the blocks which are being
sold with least conditionalities and added that the bid round aims to boost the oil and gas production and is in line with the government mission of reducing import dependence by 2022 by 10 per cent from the present 78 per cent which the country meets through imports.

Pradhan said that the government is offering for bidding 67 discovered small fields in 46 contract areas spread over nine sedimentary basins on land and in shallow and deep water areas. Of the 46 small fields, 26 are on land, 18 offshore in shallow water and two in deep water. While 28 discoveries are in the Mumbai offshore, another 14 are in the east coast's Krishna Godavari basin. The fields offered hold 625 million barrels of in-place of oil and gas reserves of oil or oil equivalent gas of in-place reserves worth Rs 70,000 crore. The present auctions, to be conducted on simpler contractual terms together with pricing and marketing freedom, will be the first licensing round in over five years.

These blocks were originally discovered by ONGC and Oil India some 40 years ago, but surrendered these fields as they could not develop them because of huge overhead cost and uneconomic size. However, Pradhan said that these national exploration companies will not get compensation from the bidders at all. Bidding will open on July 15 and will end on 31st October 2016. In two months investors will be selected and contracts will be signed by January.

Pradhan added that the current auction and recently announced Hydrocarbon Exploration and Licensing Policy (HELP), are both significant improvements over the previous New Exploration Licensing Policy (NELP) regime. NELP was based on production sharing contract (PSC) which meant revenue sharing with government after cost recovery by the contractor. In March 2012, the last exploration licensing round was concluded which was the ninth round of bidding under NELP where a total of 256 blocks were awarded. Further, the next round of roadshows will be held in Bengaluru and Guwahati, while international roadshows will be conducted in London, Houston, Calgary in Canada, Dubai, Singapore and Perth in Australia.

The CNX Nifty is currently trading at 8290.80, up by 89.75 points or 1.09% after trading in a range of 8216.40 and 8294.05. There were 44 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were SBI up by 4.42%, ICICI Bank up by 4.13%, Ultratech Cement up by 2.88%, Hindalco up by 2.62% and Zee Entertainment up by 2.29%

On the flip side, BPCL down by 0.41%, Aurobindo Pharma down by 0.37%, Tech Mahindra down by 0.17%, Tata Power down by 0.13% and Bharti Infratel down by 0.12% were the top losers.

The Asian markets were trading in green; Shanghai Composite increased 1.95 points or 0.07% to 2,936.05, FTSE Bursa Malaysia KLCI increased 8.59 points or 0.52% to 1,657.58, Jakarta Composite increased 23.91 points or 0.49% to 4,919.93, KOSPI Index increased 25.79 points or 1.3% to 2,011.63, Taiwan Weighted increased 82.79 points or 0.96% to 8,679.90, Nikkei 225 increased 95.42 points or 0.58% to 16,675.45 an Hang Seng increased 298.02 points or 1.42% to 21,328.24.

The European markets were trading in green; UK’s FTSE 100 increased 42.03 points or 0.67% to 6,315.43, France’s CAC increased 49.76 points or 1.12% to 4,473.14 and Germany’s DAX increased 145.49 points or 1.44% to 10,266.57.