Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued their firm trade, hovering near the highest point of the day in the late morning session on account of buying in frontline blue chip counters. The sentiments were on optimistic note with DIPP Secretary Ramesh Abhishek’s statement that implementation of the goods and services tax (GST) is bound to be a game changer for India’s manufacturing sector and will enhance ease of doing business in the country. Indian rupee opened higher against the US dollar at the Interbank Foreign Exchange (Forex) market as bankers and exporters took to selling of American currency and flat but positive opening of domestic equity markets. Some buying also crept in with reports that foreign investors have pumped in Rs 5,790 into the country’s capital markets within a fortnight this month, driven by global and domestic factors. Foreign portfolio investors (FPIs) bought shares worth a net Rs 660.59 crore on Friday, as per provisional data released by the stock exchanges. However, all eyes will be now on the central banks this week, with the US Federal Reserve’s two-day meet starting on Tuesday and the Bank of Japan meeting on the same day. Traders were seen piling up positions in Oil & Gas, PSU and Metal stocks, while selling was witnessed in Realty sector stocks. In scrip specific development, Heritage Foods was trading in green on reports that Future Group is in advanced talks to acquire the retail business of the company, a deal which would give Kishore Biyani sway over a network of more than 100 grocery outlets in Hyderabad, Chennai and Bengaluru.  South India Projects was trading in green as the company has entered into contract worth 180,000 euro with PrexensSas, a company incorporated in France to provide its services related to software development.

On the global front, Asian markets were trading mostly higher as investors’ returned from long weekends. A report from the Bank for International Settlements (BIS) highlighted that excessive credit growth in China is signaling an increasing risk of a banking crisis in the next three years. An early warning of financial overheating - the credit-to-GDP gap - hit 30.1 in China in the first quarter of this year. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,800 and 28,600 levels respectively. The market breadth on BSE was positive in the ratio of 1358:824, while 144 scrips remained unchanged.

The BSE Sensex is currently trading at 28697.25, up by 98.22 points or 0.34% after trading in a range of 28552.55 and 28714.77. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.56%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.77%, PSU up by 0.71%, Metal up by 0.69%, Consumer Durables up by 0.64% and IT up by 0.63% while, Realty down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.21%, TCS up by 1.08%, ONGC up by 1.07%, Mahindra & Mahindra up by 1.02% and Asian Paints up by 1.00%.

On the flip side, Maruti Suzuki down by 0.99%, Bajaj Auto down by 0.94%, HDFC down by 0.61%, Axis Bank down by 0.43% and Wipro down by 0.41% were the top losers.

Meanwhile, calling for a complete overhaul of the factory inspection system, the industry body Confederation of Indian Industry (CII) has said that the excessive number of inspections in India weighs down on the competitive advantage and the ‘ease of doing business’ of Indian businesses. It said that system needs a complete overhaul to bring India among the top 50 countries in terms of ‘ease of doing business’ in the next two years.

The industry body in its white paper titled ‘Inspections and Regulatory Enforcements for Micro Small and Medium Enterprises (MSMEs) in India’ pointed that a manufacturing company in India has to comply with around 70 laws and regulations. It further said that 40 inspectors and government officials visit factories on an average “with the ulterior motive to fleece the company promoters and owners.

The white paper furthers stated that inspections in India have been found to be excessive, duplicate and complicated, imposing significant costs on businesses, especially MSMEs,” the paper noted. While most inspections are selected locally, “without any objective criteria”, inspectors act “over-zealously” and make “extortionist demands from factories,gaming companies leverage the benefits of speed, efficiency aligned with its testing and development goals.

CII while urging the central government to encourage the states to pursue a process for simplification of labour laws and compliance, called for an integrated inspection system and emphasized on need to inculcate a risk-based approach in the inspection system which will rationalise the number of inspections and weed out the redundancy and duplicity.

The CNX Nifty is currently trading at 8813.75, up by 33.90 points or 0.39% after trading in a range of 8774.20 and 8822.35. There were 35 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.48%, Tech Mahindra up by 1.29%, Indusind Bank up by 1.27%, ICICI Bank up by 1.23% and Zee Entertainment up by 1.21%.

On the flip side, Bharti Infratel down by 1.72%, Maruti Suzuki down by 1.06%, Bajaj Auto down by 0.95%, Axis Bank down by 0.70% and Bosch down by 0.60% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 16.97 points or 0.85% to 2,016.33, Shanghai Composite increased 17.26 points or 0.57% to 3,020.11, Jakarta Composite increased 41.86 points or 0.79% to 5,309.63, Taiwan Weighted increased 242.42 points or 2.72% to 9,144.72 and Hang Seng increased 244.72 points or 1.05% to 23,580.31.

On the other hand, FTSE Bursa Malaysia KLCI decreased 0.06 points or 0% to 1,652.93. Japan stock exchange was closed on account of ‘Respect for the Aged Day’ holiday.