Benchmarks add gains; Sensex surpasses 28,000 mark

Indian equity benchmarks added gains and are hovering near the highest point of the day in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on up-beat note on reports that Finance Minister Arun Jaitley will meet his counterparts in states to discuss proposed amendments to the GST Bill on Tuesday, with the likely listing of GST Bill in Rajya Sabha this week. Investors are keeping close eye on two leading central banks (US Federal Reserve and Bank of Japan) this week, as each institution meets just a month after the UK voted to leave the European Union. Traders were seen piling position in PSU, Bankex and Oil & Gas sector stocks. In scrip specific development, Equitas Holdings was trading in green after the microfinance lender reported 64 percent year-on-year jump in its net profit. Chennai-based Equitas Holdings posted a net profit of Rs 61 crore compared to Rs 37 crore in the corresponding quarter of last year, beating estimates. Agri-input firm Rallis India was trading in green after the company posted a fourfold jump in consolidated net profit for the quarter ended June 30.

On the global front, Asian markets were trading mostly in green while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,600 and 28,000 levels respectively. The market breadth on BSE was positive in the ratio of 1724:846 while 186 scrips remained unchanged.

The BSE Sensex is currently trading at 28060.64, up by 257.40 points or 0.93% after trading in a range of 27736.51 and 28060.68. 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 0.99%, while Small cap index was up by 1.06%.

The gaining sectoral indices on the BSE were PSU up by 1.92%, Bankex up by 1.66%, Oil & Gas up by 1.57%, Realty up by 1.45% and Consumer Durables up by 1.36%.

The top gainers on the Sensex were SBI up by 2.80%, Maruti Suzuki up by 2.55%, ICICI Bank up by 2.28%, HDFC up by 2.05% and ONGC up by 1.35%.

On the flip side, Dr. Reddy’s Lab down by 3.12%, Bajaj Auto down by 0.84%, GAIL India down by 0.35%, Tata Steel down by 0.31% and Axis Bank down by 0.29% were the top losers.

Meanwhile, India Inc’s has recorded 162 merger and acquisition (M&A) transaction worth $17.5 billion in the first six months of 2016, as M&A activity eased in line with a slowdown experienced in deal-making in the Asia-Pacific region, according to Mergermarket H1 India deal report. Compared to historical high in the same period a year ago, the deal count was 26.7% fewer and in value terms 4% lower compared to deals worth $18.2 billion in 2015. Technology, pharma, medical, biotech, energy, mining & utilities were the top sectors to see a significant decline in deal volume.

The report noted that technology was still one of the most active target sectors by deal count, despite dropping to 26 deals at $2.3 billion in the first half, compared to 42 transactions valued at $1.5 billion in the year-ago period. Construction sector occupied the largest market share of 20.5% by deal value, recording seven deals worth $3.6 billion in the first half of this year, compared to eight deals worth $0.8 billion in January-June period of 2015. Report added that India's inbound activity during the first six months of 2016 recorded 82 deals worth $8.9 billion, up 21.9% by value from the first half of 2015, when deals worth $7.3 billion were announced. Whereas, outbound activities bounced back from the two-year low seen in the January-June period of 2014, standing at $2.5 billion, up 97.5% on a year-on-year basis.

As per the report the long term momentum looks bullish and a substantial growth by deal volume and deal value will be anticipated as the Modi government has committed more infrastructure spending and relaxed FDI (foreign direct investment) rules in the construction sector. However, for now mega-deals would be rarely seen, as investors are waiting for construction projects to achieve stable cash flow. It further said that in the next six months, attention could be drawn to the construction and the renewables sectors. Following Brexit, Indian conglomerates may consider cashing in some of their overseas investments to brace for upcoming changes in policies and regulations.

The CNX Nifty is currently trading at 8622.85, up by 81.65 points or 0.96% after trading in a range of 8517.20 and 8623.40. There were 41 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 3.82%, SBI up by 2.91%, BHEL up by 2.63%, Maruti Suzuki up by 2.46% and ICICI Bank up by 2.41%.

On the flip side, Dr. Reddy’s Lab down by 2.95%, Bajaj Auto down by 0.89%, Hindalco down by 0.62%, Axis Bank down by 0.35% and GAIL India down by 0.34% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 1.98 points or 0.1% to 2,012.32, Shanghai Composite increased 3.01 points or 0.1% to 3,015.83, FTSE Bursa Malaysia KLCI increased 6.4 points or 0.39% to 1,663.82, Jakarta Composite increased 11.11 points or 0.21% to 5,208.36 and Hang Seng increased 29.17 points or 0.13% to 21,993.44.

On the other hand, Taiwan Weighted decreased 21.47 points or 0.24% to 8,991.67 and Nikkei 225 decreased 6.96 points or 0.04% to 16,620.29.

The European markets were trading in green; UK’s FTSE 100 increased 24.14 points or 0.36% to 6,754.62, France’s CAC increased 34.32 points or 0.78% to 4,415.42 and Germany’s DAX increased 101.76 points or 1% to 10,249.22.