Benchmarks continue to trade in green in late morning session

After getting a gap-up start, Indian benchmark indices continue to trade in fine fettle in late morning deals on account of buying in frontline blue chip counters. Sentiments got some support with Finance Minister Arun Jaitley’s statement after a meeting of Empowered Committee of state FMs on the long awaited indirect tax reform that every state has either supported or accepted the idea of the pan-India Goods and Services Tax (GST) except Tamil Nadu. GST Empowered Committee Chairman Amit Mitra too has said that there was “general consensus” on the issue of dual control over taxation structure between the Centre and states. Besides, recovery in the rupee too triggered buying by investors. Indian rupee appreciated 8 paise to 67.19 against the US dollar in early trade on fresh selling of the American unit by exporters.  However, market participants remained nervous with the report that the monsoon has started off on a shaky note with a 22% rainfall deficit in mid-June, delaying crop planting and triggering a rise in the price of food, particularly vegetables.

On the global front, Asian markets were trading mostly in green on Wednesday after a succession of losses but fears Britain will leave the European Union are keeping traders on edge, while Shanghai swung back in green after index compiler MSCI again refused to include it in its list of key benchmarks. Further, US stocks fell for a fourth session in a row on Tuesday, marking the S&P 500 and the Dow Jones Industrial Average's longest losing streak since the market's low in February.

Back home, stocks from Capital Goods, Power and Oil & Gas counters were supporting the markets’ uptrend, while those from Metal counter were adding to the underlying cautious undertone. In scrip specific development, DCM Shriram gained after the company commissioned 420 TPD of additional Chlor-Alkali capacity at its Unit Shriram Alkali and Chemicals, Bharuch (Gujarat) as a first phase of its expansion project. Bharti Airtel too gained after the company joined hands with Singapore Telecommunications to deliver high-speed, secure data network coverage to Asia-Pacific, the Middle East, Africa, Europe and the US.

The market breadth on BSE was positive, out of 2340 stocks traded, 1496 stocks advanced, while 704 stocks declined on the BSE.

The BSE Sensex is currently trading at 26484.08, up by 88.37 points or 0.33% after trading in a range of 26446.59 and 26531.90. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.49%, while Small cap index gained 0.76%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.07%, Power up by 0.84%, Oil & Gas up by 0.74%, PSU up by 0.59%, TECK up by 0.54%, while Metal down by 0.41% was the sole losing index on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.63%, Hero MotoCorp up by 1.86%, Cipla up by 1.41%, Larsen & Toubro up by 1.21% and SBI up by 1.18%. On the flip side, ICICI Bank down by 0.86%, Coal India down by 0.81%, HDFC down by 0.42%, Axis Bank down by 0.39% and Dr. Reddys Lab down by 0.36% were the top losers.

Meanwhile, in the PSU reforms measures, NITI Aayog has submitted a roadmap to the Prime Minister's Office for closure and strategic sale of government stake in some public sector units. Under the roadmap, the Aayog has dealt with two sets of issues, one pertaining to decision regarding sick firms which have been making losses, while the second is disinvestment or strategic sale where government wants to reduce its stake.

Reportedly, NITI Aayog has submitted two separate lists of state-run companies, one comprising of sick PSUs which may be closed down and the other a list of firms which should be privatized. It has identified 32 loss-making companies for strategic disinvestment, including central public sector enterprises (CPSEs) such as Bharat Pumps & Compressors, Tyre Corporation of India, Central Inland Water Transport Corporation and Bengal Chemicals & Pharmaceuticals, among others. Of the 32 companies, 10 could see strategic disinvestment right away while for the other 22 the suggestion is to revive while retaining a subsequent option for strategic disinvestment.

Earlier, in his budget speech, Finance Minister Arun Jaitley had said that NITI Aayog will identify PSUs for strategic sale. He had said that a new policy for management of government investment in Public Sector Enterprises, including disinvestment and strategic sale, has been approved. We have to leverage the assets of CPSEs for generation of resources for investment in new projects

For the current fiscal year the government has set a disinvestment target of Rs 56,500 crore. Of the total budgeted proceeds, Rs 36,000 crore is estimated to come from minority stake sale in PSUs, and the remaining Rs 20,500 crore from strategic sale in both profit and loss-making companies.

The CNX Nifty is currently trading at 8132.65, up by 23.80 points or 0.29% after trading in a range of 8123.15 and 8147.60. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.45%, Hero MotoCorp up by 1.94%, BPCL up by 1.56%, Idea Cellular up by 1.55% and Cipla up by 1.28%. On the flip side, Bharti Infratel down by 2.05%, Aurobindo Pharma down by 0.99%, Coal India down by 0.91%, Eicher Motors down by 0.84% and Hindalco down by 0.69% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 0.08%, Taiwan Weighted increased 0.32%, Shanghai Composite surged 1.38%, Nikkei 225 added 0.51% and Hang Seng was up by 0.37%. On the flip side, KOSPI Index declined 0.05% and Jakarta Composite was down by 0.49%.