Markets recover from day’s low; Sensex above 29,000 mark

Recovering from day’s low, Indian benchmark indices were holding their head above water and trading up with modest gains of around 0.04-0.12%, on emergence of buying by funds and retail investors in selected stocks. Sentiments got some boost with reports that the government has begun the groundwork for creation of a secretariat to cater to the Goods and Services Tax (GST) Council, which will be constituted after Presidential assent for the Constitution Amendment Bill enabling implementation of the proposed tax. The government wants the institutional arrangements ready so that the GST Council can start deliberating the nuances of the law quickly. Confidence among investors also increased with the private report indicating that India is on the path of becoming a 'pivot' for high-tech world manufacturing even as global manufacturing growth is expected to remain low in 2016 due to weakened financial support for productive activities.  Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1439 crore on September 06, 2016. However, some market participants remained anxious and refrained from any buying activity, with both the indices (Sensex & Nifty) trading above their 52 weeks highs.  Meanwhile, banking stocks gained traction on the report that services sector data, which came out yesterday, showed there is still room for the Reserve Bank of India (RBI) to cut interest rates further. The easing of inflationary pressures leaves room for rate cut by the central bank. Stocks related to agriculture and irrigation edged higher on report that India’s apex rural-development bank National Bank for Agriculture and Rural Development (NABARD) will manage a Rs. 77,000 crore corpus as part of a Central government push to complete 99 unfinished irrigation projects across the country by 2019 and bring water to 76.03 lakh hectares.

On the global front, Asian markets trading mostly in green on Wednesday as investors turned optimistic after sluggish services sector further aided sentiment that the US Federal Reserve may hold back from raising interest rates at its September meeting. However, Japanese market declined after exporters and other cyclical shares were hit by a rising yen on dashed expectations for a near-term interest rate increase. Meanwhile, energy companies lead US stocks higher on Tuesday after a number of companies announced deals following the Labor Day holiday. Investors are also hoping for an agreement among oil producing countries that could limit production and send crude prices and company profits higher.

Back home, stocks from Realty, Metal and Banking counters were supporting the markets’ uptrend, while those from Oil & Gas, Power and Consumer Durables counters were adding to the underlying cautious undertone. In scrip specific development, Jindal Poly Films has slipped after consolidated net profit fell 39.3% to Rs 98.84 crore on 7.9% decline in net sales to Rs 1777.03 crore in Q1 June 2016 over Q1 June 2015. On the other hand, IL&FS Engineering and Construction has jumped after the company won an order worth Rs 173.13 crore from GAIL.

The market breadth remained optimistic as there were 1310 shares on the gaining side against 1015 shares on the losing side, while 140 shares remained unchanged.

The BSE Sensex is currently trading at 29011.99, up by 33.97 points or 0.12% after trading in a range of 28928.10 and 29067.84. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.14%, while Small cap index up by 0.60%.

The top gaining sectoral indices on the BSE were Realty up by 1.50%, Metal up by 0.90%, Bankex up by 0.71%, PSU up by 0.63% and IT up by 0.40%, while Oil & Gas down by 0.39%, Power down by 0.37% and Consumer Durables down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.47%, Tata Steel up by 1.97%, ICICI Bank up by 1.19%, Wipro up by 0.85% and ITC up by 0.82%. On the flip side, Asian Paints down by 1.68%, HDFC down by 1.43%, NTPC down by 0.92%, Bharti Airtel down by 0.92% and Hindustan Unilever down by 0.90% were the top losers.

Meanwhile, government is focusing on stopping imports of petroleum product in country and on developing alternative fuel like ethanol, methanol, bio-CNG from waste, which will boost the rural economy and also create huge employment. Road Transport and Highways Minister Nitin Gadkari has said that we are going to develop this country where our import of petroleum will be zero.

The minister stated that India at present is incurring a massive Rs 4.5 lakh crore on crude imports which was earlier Rs 7.5 lakh crore. He added that the socio-economic situation is not good, agriculture is facing acute problems and this alternative fuel economy is going to change socio-economic picture of agriculture and rural economy.

Gadkari further said that we have finalised standard norms for bio-diesel, bio-CNG, ethanol, electricity and the bureaucracy also needed to fast track decisions. He said that we can make ethanol from biomass that is cotton straw, wheat straw, rice straw and bagasse. Even from municipal waste we can make ethanol. Emphasizing on “waste to wealth”, he said manufacturing ethanol and biogas from waste could result in savings to the tune of Rs 5 lakh crore annually.

The CNX Nifty is currently trading at 8946.80, up by 3.80 points or 0.04% after trading in a range of 8919.60 and 8968.70. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 2.95%, SBI up by 2.27%, Tata Steel up by 2.03%, HCL Tech up by 1.83% and Indusind Bank up by 1.78%. On

the flip side, BHEL down by 2.46%, Asian Paints down by 1.92%, Yes Bank down by 1.79%, HDFC down by 1.69% and BPCL down by 1.42% were the top losers.
Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 0.01%, KOSPI Index increased 0.03%, Jakarta Composite gained 0.1%, Shanghai Composite jumped 0.41% and Taiwan Weighted was up by 0.84%. On the flip side, Nikkei 225 decreased 0.53% and Hang Seng was down by 0.05%.