Benchmarks continue firm trade in late afternoon session

Indian equity benchmarks continued their firm trade in a narrow range in the late afternoon session on account of buying in front line clue chip counters. The sentiments got some support after Cabinet approved changes in the GST Constitutional Amendment bill including doing away with the additional 1% tax by producing states and compensating all states for any revenue loss in the first five years post the GST rollout. Traders were seen piling position in Consumer Durables, Power and FMCG stocks while selling was witnessed in Capital Goods, Metal and IT sector stocks. In scrip specific development, Asian Paints was trading in green on reporting better-than-expected quarterly earnings aided by strong operational performance and retaining double digits growth in volume. Hectic buying activity was witnessed in Logistics Companies like Allcargo Logistics, Snowman Logistics, Gati, Arshiya and VRL Logistics amid rising hopes of passage of the long-pending Goods and Services Tax (GST) Bill in the ongoing monsoon session of Parliament. The market may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. July 2016 series to next month i.e. August 2016 series. The near month July 2016 derivatives contracts will expire today i.e. July 28, 2016.

On the global front, Asian markets were trading mostly in red while the European markets were trading mostly on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,600 and 28,100 levels respectively. The market breadth on BSE was negative in the ratio of 1435:1075 while 205 scrips remained unchanged.

The BSE Sensex is currently trading at 28114.65, up by 90.32 points or 0.32% after trading in a range of 28064.90 and 28151.99. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index was up by 0.72%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.56%, Power up by 0.98%, FMCG up by 0.69%, Auto up by 0.59%, Realty up by 0.37% while, Capital Goods down by 0.82%, Metal down by 0.61%, IT down by 0.08%, Oil & Gas down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 6.02%, Maruti Suzuki up by 4.06%, Power Grid Corporation up by 3.40%, Sun Pharma Industries up by 1.89% and Coal India up by 1.55%.

On the flip side, Tata Steel down by 2.78%, Larsen & Toubro down by 1.64%, Tata Motors down by 1.44%, Axis Bank down by 1.30% and Bharti Airtel down by 0.86% were the top losers.

Meanwhile, the government has raised the foreign shareholding limit in Indian stock exchanges from 5% to 15%, allowing overseas banks, insurers, stock and commodity exchanges and depositories to hold up to 15% stake in Indian stock exchanges. The move is aimed at attracting more foreign inflows in stock exchanges like BSE and the NSE; the higher foreign shareholding limit would also help BSE and NSE in their plans to list on exchanges. The decision is in line with an announcement made by finance minister Arun Jaitley in his budget speech of this year.

The decision was taken at a meeting of the cabinet, chaired by Prime Minister Narendra Modi, additionally the Cabinet also gave its nod for foreign portfolio investors to acquire shares through initial allotment, besides secondary market, in the stock exchanges. The move will help in enhancing global competitiveness of Indian stock exchanges by accelerating and facilitating the adoption of latest technology and global best practices, which will lead to overall growth and development of the domestic capital market.

The proposal of increasing foreign shareholding limit in domestic stock exchanges to 15 per cent from 5 per cent currently, was first made by capital market regulator Securities and Exchange Board of India (Sebi) in 2012, but was turned down by the Bimal Jalan committee set up to suggest amendments to Stock Exchange and Clearing Corporations (SECC) Regulations. In November last year, the finance ministry wrote to SEBI for its feedback on allowing an individual foreign shareholder to hold up to 15% in an exchange.

A number of foreign investors are already invested in the two leading Indian exchanges and the decision to hike the limit will help them enhance their exposure to the Indian markets. Singapore Exchange and Deutsche Boerse AG currently hold 4.9% each in BSE. While, in the NSE, the top foreign shareholders include Gagil FDI (Cyprus), GS Strategic Investments, SAIF II SE Investments Mauritius and Aranda Investments (Mauritius) Pte they hold 5% each.

The CNX Nifty is currently trading at 8639.10, up by 23.30 points or 0.27% after trading in a range of 8626.35 and 8656.80. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 6.29%, Asian Paints up by 5.90%, Maruti Suzuki up by 4.09%, Power Grid Corporation up by 3.28% and Eicher Motors up by 2.84%.

On the flip side, Tata Steel down by 2.85%, Tech Mahindra down by 2.02%, Tata Motors - DVR down by 1.86%, Larsen & Toubro down by 1.66% and BPCL down by 1.59% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 187.98 points or 1.13% to 16,476.84, Hang Seng decreased 44.65 points or 0.2% to 22,174.34, FTSE Bursa Malaysia KLCI decreased 6.35 points or 0.38% to 1,657.21 and KOSPI Index decreased 3.95 points or 0.2% to 2,021.10.

On the other hand, Shanghai Composite increased 2.32 points or 0.08% to 2,994.32, Taiwan Weighted increased 13.25 points or 0.15% to 9,076.64 and Jakarta Composite increased 13.66 points or 0.26% to 5,288.02.

The European markets were trading mostly in green; France’s CAC increased 12.65 points or 0.28% to 4,459.61, Germany’s DAX increased 14.8 points or 0.14% to 10,334.35, while UK’s FTSE 100 decreased 7.32 points or 0.11% to 6,743.11.