Benchmarks continue to hold their head above water

The local equity markets continue to trade in green in the noon session on account of sustained foreign fund inflows and persistent buying by domestic financial institutions as well as retail investors. Including Tuesday's inflows, FPIs have pumped in about Rs 40,100 crore in Indian equities so far this year, while DIIs have put in roughly Rs 10,600 crore.  Sentiments got some support with a Ficci survey that India's economy is likely to expand 7.8 percent during the current financial year on the back of good monsoons. The estimated median GVA (gross value added) growth for Q1 FY17 has been put at 7.6 percent. Also, with inflation likely to moderate following a good monsoon, Finance Minister Arun Jaitley stated that it is logical to hope for a rate cut by Reserve Bank of India (RBI) though the actual decision will have to be taken by the central bank. 

On the global front, Asian markets were trading mixed on Wednesday, following modest losses on Wall Street overnight, with investors awaiting US jobs numbers for further signs the Federal Reserve may raise rates as soon as September. The next key piece of U.S. economic data is coming on Friday with the August jobs report. Further, Japan’s Nikkei stock index gained traction, on the expectation that sluggish domestic data increased the prospect of further easing by the Bank of Japan.

Back home, stocks from Auto, Banking and Capital Goods counters were supporting the markets’ uptrend, while those from Metal, Power and Information technology (IT) counters were adding to the underlying cautious undertone. In scrip specific development, UltraTech Cement ha rallied after the Reserve Bank of India (RBI) allowed foreign investors to invest up to 30% in the cement major. However, Cox & Kings came under selling pressure after the company reported 23.68% fall in its consolidated net profit at Rs 108.07 crore for the quarter ended June 30, 2016 as compared to Rs 141.60 crore for the same quarter in the previous year.

The market breadth remained optimistic as there were 1258 shares on the gaining side against 1015 shares on the losing side, while 172 shares remained unchanged.

The BSE Sensex is currently trading at 28409.59, up by 66.58 points or 0.23% after trading in a range of 28363.10 and 28490.21. 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 0.46%, while Small cap index up by 0.29%.

The top gaining sectoral indices on the BSE were Auto up by 0.99%, Bankex up by 0.63%, Capital Goods up by 0.51%, Consumer Durables up by 0.46% and FMCG up by 0.09%, while Metal down by 0.57%, Power down by 0.15%, IT down by 0.14%, Realty down by 0.09% and PSU down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.00%, Hero MotoCorp up by 1.79%, Lupin up by 0.84%, Bajaj Auto up by 0.83% and HDFC up by 0.72%. On the flip side, ONGC down by 1.49%, NTPC down by 1.17%, TCS down by 0.91%, Tata Steel down by 0.87% and Coal India down by 0.81% were the top losers.

Meanwhile, government will soon be coming up with a draft vehicle scrapping policy, to scrap heavy vehicles that are more than 15 years old. The policy would provide benefit of Rs 4,000 crore to central government and the state governments will benefit to the tune of Rs 10,000 crore, offering a combined benefit of Rs 14,000 crore, also the automobile industry will see a growth of 22 per cent.

Minister for Road Transport and Highways, Nitin Gadkari said that he met Finance Minister Arun Jaitley and accordingly the proposed Voluntary Vehicle Fleet Modernisation Programme (V-VMP), which aims to scrap heavy vehicles that are more than 15 years old in the first phase, was being finalised and would be formulated in such a fashion that those surrendering their old vehicles will get some financial benefits and also added that those buying new vehicles will get some concessions from the state and central governments. The manufacturers too will give some benefits as their sales will go up.

Gadkari had earlier said the policy may provide benefits of Rs 2-3 lakh for every heavy vehicle to be scrapped. Scrapping of these heavy vehicles will be done at industrial clusters like Kandla - to be set-up under the government’s ambitious Sagarmala project. Minister further added that the benefits of the policy include curbing pollution, as 65 per cent of the vehicular pollution is caused by heavy vehicles like trucks and buses and it will also provide additional net revenue of over Rs 21,000 crore on account of automobile sales, besides crude oil savings of Rs 7,700 crore due to improved fuel efficiency. As per the Ministry, the proposed policy has the potential to reduce vehicular emission by 25-30 per cent and save oil consumption by 3.2 billion litres a year. Once the policy is finalised, it is estimated to result in domestic steel scrap generation worth Rs 5,500 crore to substitute imported scrap and would create huge employment.

The CNX Nifty is currently trading at 8776.50, up by 32.15 points or 0.37% after trading in a range of 8754.05 and 8801.50. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 3.86%, Tata Motors up by 2.97%, Indusind Bank up by 2.31%, Tata Motors - DVR up by 2.24% and Bharti Infratel up by 1.87%. On the flip side, ONGC down by 1.53%, Bosch down by 1.20%, NTPC down by 1.05%, Tata Steel down by 0.82% and Yes Bank down by 0.77% were the top losers.

Asian markets were trading mixed; Hang Seng rose 0.02%, Jakarta Composite increased 0.15%, Shanghai Composite gained 0.29% and Nikkei 225 was up by 1.14%. On the flip side, Taiwan Weighted decreased 0.46%, KOSPI Index slipped 0.48% and FTSE Bursa Malaysia KLCI was down by 0.21%.