Markets continue to trade in upbeat mood; Nifty nears 8,700 level

Going from strength to strength, local equity markets continued to trade in upbeat mood in the noon session on the back of sustained buying activities by both funds and retail investors. The sentiments also got a boost with the Reserve Bank of India stating that the near-term growth outlook for India seems brighter than last fiscal and the economy is likely to expand at 7.6 percent in 2016-17. It has also said that a better than anticipated agricultural performance and the possibility of allowances under the 7th Pay Commission's award being paid out in the fourth quarter of 2016-17 provide upsides to this projection. Further, higher Asian cues and sustained FII buying also supported the market sentiment. In scrip specific development, Ramky Infrastructure soared 8.5 percent on winning NHAI contracts worth Rs. 1,646 crore for developing two highway projects in Jharkhand, while Ashoka Buildcon lost half a percent on reporting a 33 percent decline in Q1 net profit.

On the global front, Asian markets were trading mostly in green on doubts the Federal Reserve would hike interest rates as soon as September, restraining the dollar, while investors continued to count on more policy stimulus elsewhere in the world.

The BSE Sensex is currently trading at 28159.33, up by 256.67 points or 0.92% after trading in a range of 28010.66 and 28162.99. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.87%, while Small cap index was up by 1.02%.

The top gaining sectoral indices on the BSE were Auto up by 1.48%, IT up by 1.19%, Bankex up by 1.14%, Consumer Durables up by 1.06% and Metal up by 1.06%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Maruti Suzuki up by 2.97%, Bajaj Auto up by 2.97%, GAIL India up by 2.16%, Sun Pharma Inds. up by 2.10% and ICICI Bank up by 1.74%. On the flip side, Bharti Airtel down by 1.99%, Adani Ports &Special down by 0.40% and Reliance Industries down by 0.05% were the top losers.

Meanwhile, the government has initiated the process of operationalising the Rs 5,500-crore Rebate of State Levies (ROSL) scheme from September 20, 2016. The main objective of the scheme is to provide for reduction of state levies in addition to the duty drawback scheme, through the scheme for ROSL on export of garments on an average basis only. The scheme is in line with the recognised economic principle of 'zero rating' of export products and in recognition of the fact that at present only central levies are rebated by way of the drawback scheme.

Under this scheme, the revenue department will compensate exporters for state levies. Currently, the exporters get compensated for duty drawback during manufacturing of products for exports. The new incentives, which include enhanced duty drawback coverage with refund of state levies not being refunded so far, additional funding under the Technology Upgradation Fund Scheme (TUFS) and additional contribution towards the Employee’s Provident Fund (EPF) by the government, will help Indian exporters fight competition from countries such as Bangladesh.

The rebate will be disbursed from budgetary allocation of Ministry of Textiles using the Customs EDI System. The scheme also aims to boost India’s garment exports thereby facilitating augmenting of investment and creation of more employment in the garment sector.

The CNX Nifty is currently trading at 8688.05, up by 80.60 points or 0.94% after trading in a range of 8642.25 and 8688.95. There were 46 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 3.10%, Tech Mahindra up by 3.06%, Bajaj Auto up by 2.83%, Grasim Industries up by 2.69% and Bosch up by 2.33%. On the flip side, Bharti Airtel down by 2.29%, BHEL down by 0.53%, Adani Ports &Special down by 0.44%, Idea Cellular down by 0.32% and Reliance Industries down by 0.05% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted increased 0.39 points or 0% to 9,110.56, FTSE Bursa Malaysia KLCI was up by 1.6 points or 0.1% to 1,683.20, Shanghai Composite gained 4.18 points or 0.14% to 3,074.21, KOSPI Index increased 7.39 points or 0.36% to 2,039.74 and Hang Seng was up by 197.63 points or 0.87% to 23,018.97. On the flip side, Jakarta Composite decreased 26.42 points or 0.49% to 5,344.35and Nikkei 225 decreased 12.13 points or 0.07% to 16,725.36.