Benchmarks trade jubilantly on firm Asian cues

Buoyed by firm regional cues, Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals, with frontline gauges recapturing their crucial 28,200 (Sensex) and 8,700 (Nifty) levels. Sentiment remained up-beat with the government listing the Constitutional Amendment Bill for introduction of GST in Rajya Sabha for consideration and passage this week. Some support also came. Traders took some encouragement with a survey of industry body Assocham stating that India Inc expects growth in sales and profitability to pick up by the year-end in sync with an uptick in the big macro picture.

Strong cues from Asian counters too aided sentiments with most of them trading higher on expectations that the US Fed won't hike rates after second quarter US GDP data came in lower-than-expected. Back home, steel stocks remained on buyers’ radar with the Union Minister for Steel Birender Singh stating that the Centre is making all efforts to boost steel production so that India could become the second largest steel producer in the world. Stocks of oil marketing companies remained in action, as Petrol price on Sunday was cut by Rs 1.42 a litre and diesel by Rs 2.01 per litre, the third reduction in rates this month on global cues.

The BSE Sensex is currently trading at 28232.77, up by 180.91 points or 0.64% after trading in a range of 28077.42 and 28265.27. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.09%, while Small cap index up by 0.81%.

The top gaining sectoral indices on the BSE were Metal up by 1.35%, Auto up by 0.98%, IT up by 0.87%, TECK up by 0.86% and PSU was up by 0.84%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were TCS up by 1.98%, Tata Steel up by 1.83%, Axis Bank up by 1.73%, Bajaj Auto up by 1.65% and Wipro up by 1.61%. On the flip side, ICICI Bank down by 2.26%, Lupin down by 0.56% and Hindustan Unilever down by 0.08% were the top losers.

Meanwhile, at a national-level meeting on regional connectivity scheme (RCS), organised by the Union Civil Aviation Ministry with airlines, airport operators, State governments and other stakeholders, the state governments have asked the Centre to include long-distance flights in its regional connectivity scheme. On the other hand airlines sought subsidies to be awarded for a longer period to make the plan a success.

The draft regional connectivity scheme provides subsidies to airlines for three years so that they offer Rs 2,500 as fares for an hour’s flight on limited seats on the regional routes, the airlines however demanded to get subsidy for a longer period. They also voiced their financial concerns.

Civil Aviation Secretary R.N. Choubey said that “We are examining all the suggestions with an open mind,” and added that all the States had unanimously” supported the regional connectivity scheme. All the routes connecting underserved or unserved airports within 200-800 km distance can become a part of the scheme. The government plans to come out with a full-fledged policy on the RCS by 15 August and, thereafter, would invite applications from the airlines for participation.

The government’s planned RCS, set up under the New Civil Aviation Policy (NCAP), 2016, aims to develop and connect underserved and unserved airports. Under the scheme, the government will provide 80 per cent of the subsidy to airlines by charging a levy on each departure from airlines operating on metro routes, while the remaining 20 per cent will come from States. For RCS-bound operators, States have to reduce value-added tax on aviation turbine fuel to 1%, besides providing police and fire services free of cost, and power, water and other utilities at minimal rates.

The CNX Nifty is currently trading at 8700.00, up by 61.50 points or 0.71% after trading in a range of 8650.80 and 8703.15. There were 46 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.10%, Hindalco up by 2.06%, Tata Steel up by 1.87%, HCL Tech up by 1.86% and TCS up by 1.86%. On the flip side, ICICI Bank down by 2.11%, Tech Mahindra down by 1.03%, Lupin down by 0.57%, Kotak Mahindra Bank down by 0.11% and Hindustan Unilever down by 0.07% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 10.8 points or 0.65% to 1,664.06, KOSPI Index gained 12.68 points or 0.63% to 2,028.87, Nikkei 225 rose 54.89 points or 0.33% to 16,624.16, Taiwan Weighted added 73.84 points or 0.82% to 9,058.25, Jakarta Composite soared 116.06 points or 2.22% to 5,332.05 and Hang Seng was up by 287.36 points or 1.31% to 22,178.73. On the flip side, Shanghai Composite was down by 37.1 points or 1.25% to 2,942.24.