Benchmarks magnify gains; Nifty nears 8,400 mark

Indian equity benchmarks extended early gains to continue firm trade in the late afternoon session, mainly due to sustained buying by investors and domestic financial institutions, also positive cues from other Asian markets kept supporting the markets. Investors mounted more bullish bets amid good progress in monsoon rains and economic reforms continued to support market sentiment. The rainfall deficit has reduced to 6 percent, sharply down from 18 percent in the first week of June. However, there was some cautiousness too with RBI Governor Raghuram Rajan, warning against expecting too much from central banks, stating that it is wrong on their part also to always claim a ‘bazooka’ left up their sleeves. On global front, Asian shares shrugged off early losses and edged higher on Monday.  Activity across much of the region was subdued ahead of the US Independence Day holiday, when financial and commodity markets will be closed.

Back home, the NSE Nifty and BSE sensex were trading near the psychological levels of 27400 and 8400. In scrip specific development, Bajaj Auto was down by about half a percent after reporting four percent decline in total sales in June at 3,16,969 units against 3,31,317 in the same month of 2015.

The BSE Sensex is currently trading at 27363.85, up by 218.94 points or 0.81% after trading in a range of 27293.53 and 27385.66. There were 24 stocks advancing against 6 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 1.19%.

The top gaining sectoral indices on the BSE were Realty up by 2.68%, PSU up by 1.94%, Oil & Gas up by 1.73%, Metal up by 1.62%, Capital Goods up by 1.41%, while FMCG down by 0.91% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports &SEZ up by 4.18%, ONGC up by 4.01%, Tata Motors up by 3.11%, ICICI Bank up by 2.27% and Coal India up by 2.02%. On the flip side, ITC down by 2.06%, Hindustan Unilever down by 0.81%, NTPC down by 0.77%, Dr. Reddys Lab down by 0.69% and Hero MotoCorp down by 0.23% were the top losers.

Meanwhile, government may not cut excise duty on petrol and diesel in the near term if it accepts the suggestion made in the approach paper, submitted by the Chief Economic Adviser (CEA) Arvind Subramanian last month, to the Finance Ministry for maintaining status quo when oil prices can climb by another $ 15 a barrel. CEA has suggested status quo on excise duties till oil prices climb to $ 65 per barrel, from the present $ 49 levels.

CEA stated in the approach paper, any rise in prices above $ 65 a barrel should be equally borne by the consumers and the government, consumers by way of paying higher retail rates and the government by cutting excise duty on the two auto fuels. If crude oil price were to average $ 65 a barrel from July to end of the year, half of the burden on the fiscal would be Rs 46,000 crore, or 0.3 per cent of GDP. Further he added that, every incremental $ 5 per barrel increase in global oil prices would translate into Rs 2-2.1 per litre increase in retail prices if the 50:50 burden sharing mechanism is followed.

India is dependent on imports to meet 80 per cent of its oil needs, it spent $ 63.96 billion on crude oil import in 2015-16, about half of $ 112.7 billion outgo in the previous fiscal. For the current fiscal, the import bill has been pegged at $ 66 billion at an average import price of $ 48 per barrel. Every rupee per litre increase in petrol price leads to 0.02 per cent rise in Wholesale Price Index (WPI) inflation and 0.07 per cent for the same amount of increase in diesel rates.

The CNX Nifty is currently trading at 8394.60, up by 66.25 points or 0.80% after trading in a range of 8372.65 and 8398.45. There were 39 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were BHEL up by 4.35%, Adani Ports &Special up by 4.31%,  ONGC up by 3.82%,  Tata Motors - DVR up by 3.71% and Tata Motors up by 3.14%. On the flip side, Bosch down by 2.36%, ITC down by 2.00%, NTPC down by 1.08%, Grasim Industries down by 1.04% and Kotak Mahindra Bank down by 0.82% were the top losers.

Asian markets were trading in green, KOSPI Index increased 7.98 points or 0.4% to 1,995.30, FTSE Bursa Malaysia KLCI jumped 9.03 points or 0.55% to 1,655.25, Taiwan Weighted surged 22.34 points or 0.26% to 8,760.58, Shanghai Composite was up by 53.46 points or 1.82% to 2,985.94, Nikkei 225 rose 93.32 points or 0.6% to 15,775.80, Hang Seng increased 301.67 points or 1.45% to 21,096.04.