Benchmarks trade jubilantly in early deals; Nifty regains 8,250 mark

Indian equity benchmarks have made a gap-up opening and are trading jubilantly with key gauges recapturing their crucial 26,900 (Sensex) and 8,250 (Nifty) bastion, mirroring strength in the global equities as near term worries over Brexit eased. Sentiments also remained up-beat after the Cabinet approved the recommendations of the 7th Pay Commission on Wednesday and traders took some encouragement with Parliamentary Affairs Minister Venkaiah Naidu’s statement that the government will seek to ensure that the bill on a pan-India goods and services tax (GST) will be passed in the upcoming session of parliament, scheduled from July 18 to August 12. Firm global cues too aided sentiments, back home, the Indian rupee strengthened to its one-week high against the US dollar in early deals. Buying in metal and mining stocks too supported sentiments after reports suggested that the Union Cabinet cleared the National Mineral Exploration Policy (NMEP). Auto shares remained on buyers’ radar on hopes that demand for vehicles post the approval of the seventh pay commission will increase.

The BSE Sensex is currently trading at 26972.85, up by 232.46 points or 0.87% after trading in a range of 26902.79 and 26981.11. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.86%, while Small cap index gained 0.93%.

The top gaining sectoral indices on the BSE were Auto up by 1.46%, Consumer Durables up by 1.27%, Capital Goods up by 1.20%, Power up by 1.09% and Realty up by 1.04%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Tata Motors up by 2.95%, Hero MotoCorp up by 1.85%, ICICI Bank up by 1.75%, NTPC up by 1.75% and Axis Bank up by 1.72%. On the flip side, HDFC Bank down by 0.10% were the top losers.

Meanwhile, rating agency India Ratings and Research in its latest report has said that the Ujwal Discom Assurance Yojana (UDAY) meant for revival of debt-ridden discoms will not have a destabilizing effect on fiscal consolidation at an aggregate level. It estimates that the aggregate fiscal deficit of states at 3.2 per cent of GDP in 2016-17 is expected to be marginally better than the 3.4 per cent in fiscal year 2016.

The report further suggested that at an aggregate level, the impact of UDAY is unlikely to pose a serious challenge to the fiscal consolidation paths of states. The aggregate impact of UDAY on the fiscal deficits of 13 states that have joined the scheme will be 0.47% of gross domestic product (GDP) in FY17 estimates India Ratings. However, it said that state finances of Andhra Pradesh, Haryana, Jharkhand, Punjab, Rajasthan and Uttar Pradesh will come under pressure due to the interest servicing of UDAY bonds.

As per the Ratings agency’s estimates, the states at the aggregate level are likely to miss the fiscal deficit target of 2.8% of GDP in FY17 by a wide margin, in spite of marginally better fiscal performance. Further, though the combined revenue account of the states are showing improvement over financial year 2016, will miss the budgetary target for the current fiscal year.

Furthermore, the agency believes that the capital expenditure of state and central government together can play a limited role in reviving the capex cycle. Besides, it also said that the impact of pay revision of state government employees in line with the recommendations of the Seventh Central Pay Commission will be felt only in 2017-18. The five states those have not yet joined the UDAY scheme despite incurring high distribution losses include Telangana, Madhya Pradesh Maharashtra, Tamil Nadu and West Bengal.

The CNX Nifty is currently trading at 8269.45, up by 65.45 points or 0.80% after trading in a range of 8253.25 and 8270.65. There were 49 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.12%, Tata Motors up by 3.05%, Tata Motors - DVR up by 1.79%, Hindalco up by 1.71% and ICICI Bank up by 1.71%. On the flip side, Bharti Infratel down by 0.57% and HDFC Bank down by 0.14% were the top lose

Most of the Asian counters trading in green, tracking overnight gains on Wall Street with Hong Kong stocks gaining the most with over 1.5% gains while Nikkei was up nearly 1% amid a softening yen, while trading in Chinese shares remained lacklustre with the benchmark Shanghai Composite trading slightly in red terrain.

FTSE Bursa Malaysia KLCI increased 10.35 points or 0.63% to 1,652.56, KOSPI Index gained 14.76 points or 0.75% to 1,971.12, Jakarta Composite jumped 44.27 points or 0.89% to 5,024.37, Taiwan Weighted rose 61.66 points or 0.72% to 8,648.22, Nikkei 225 added 132.49 points or 0.85% to 15,699.32 and Hang Seng was up by 326.28 points or 1.6% to 20,762.40. On the flip side, Shanghai Composite was down by 7.12 points or 0.24% to 2,924.47.