Benchmarks trade jubilantly in early deals; Sensex crosses 28,100 mark

Indian equity benchmarks are trading jubilantly in early deals on Wednesday, with frontline gauges recapturing their crucial 28,100 (Sensex) and 8,650 (Nifty) levels. The State Finance Ministers have endorsed the Constitution Amendment Bill for the Goods & Services Tax with some tweaks, giving the NDA government the upper hand in hardball negotiations with the Congress. Some support also came with report that Foreign Portfolio Investors (FPIs) bought shares worth net Rs 670.89 crore yesterday, as per provisional data released by the stock exchanges.

On the global front, Asian markets were trading mostly in green at this point of time, with the Japanese market rebounding after three straight session of fall, as the yen retreated amid speculation over the outlook for Japanese stimulus. However, the US markets ended mostly flat in the last session with traders reluctant to make any bet ahead of Wednesday’s Federal Reserve decision, even though the Fed is widely expected to leave interest rates unchanged.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Aviation stocks flying high on report that the air traffic in India grew by a strong 22 per cent between January and June. Air traffic grew at double-digit pace in June, with airlines reporting robust occupancy figures.

The BSE Sensex is currently trading at 28186.74, up by 210.22 points or 0.75% after trading in a range of 27973.37 and 28190.40. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.77%, while Small cap index up by 0.82%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.33%, Bankex up by 1.20%, PSU up by 1.19%, Auto up by 1.09% and Power up by 1.01%, while Healthcare down by 0.92% was the lone loser on the BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 2.67%, Maruti Suzuki up by 2.58%, HDFC up by 2.04%, Tata Motors up by 1.68% and GAIL India up by 1.54%. On the flip side, Dr. Reddys Lab down by 9.23%, Bajaj Auto down by 0.79%, Tata Steel down by 0.72% and Lupin down by 0.18% were the top losers.

Meanwhile, ahead of the mega telecom spectrum auction, domestic Credit Rating agency ICRA has said that the sector’s contribution towards non-tax revenues of the government in the current fiscal is likely to be the highest in the past five years due to the auction, which is likely to take place in September this year.

The rating agency in its latest report has said that though the spectrum auctions have not been a regular feature, nevertheless they have contributed Rs 1,59,000 crore over the last seven years. Overall, the communication sector has contributed at the least 14 per cent to the non-tax  revenues of the GoI each year, and we expect the contribution to remain healthy going forward.  It added that the telecom industry would contribute at least Rs 55,000-60,000 crore to the non-tax revenue receipts of the Indian government for each of the next 10 years, excluding any cash flows from other levies and assuming no change in spectrum usage charge (SUC) calculations. The sector occupies a critical position in the economy and license fees and a spectrum usage charges are the primary constituents of the communications sector's contribution to the non-tax revenues of the government.

According to ICRA, in the past seven years, the telecom sector has contributed about Rs 3 lakh crore to the non-tax revenues of the government, amounting to 24 per cent of the total non-tax revenue receipts. Out of the Rs 3 lakh crore contributions, SUC has contributed Rs Rs 38,000 crore, growing at 12 per cent per annum.
However, it has also said that the government is likely to miss revenue target of Rs 98,995 crore from telecom services budgeted for the current financial year even though its contribution will be sizeable in FY17, though the sector will contribute to the tune of Rs 5-6 lakh crore over period of next 10 years.

The CNX Nifty is currently trading at 8655.90, up by 65.25 points or 0.76% after trading in a range of 8593.85 and 8658.00. There were 45 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.26%, Maruti Suzuki up by 2.99%, ICICI Bank up by 2.92%, BHEL up by 2.51% and HDFC up by 1.99%. On the flip side, Dr. Reddys Lab down by 9.67%, Bajaj Auto down by 0.93%, Yes Bank down by 0.60%, Tata Steel down by 0.58% and Lupin down by 0.17% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 1.15 points or 0.07% to 1,662.57, Taiwan Weighted gained 27.12 points or 0.3% to 9,051.91, Jakarta Composite increased 67.81 points or 1.3% to 5,292.21 and Nikkei 225 was up by 364.28 points or 2.22% to 16,747.32.
On the flip side, Shanghai Composite declined 49.37 points or 1.62% to 3,000.79, Hang Seng decreased 31.28 points or 0.14% to 22,098.45 and KOSPI Index was down by 5.45 points or 0.27% to 2,021.89.