Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued their firm trade in the late morning session on account of buying in front line blue chip counters. The sentiments were on optimistic note tracking the regional counter parts after OPEC took an important step toward a cap on crude-oil output. Investors took some encouragement from Finance Minister Arun Jaitley’s statement, who reacting to 32-point jump on World Economic Forum’s Global Competitiveness Index in two years, has said that it shows India has covered a long distance and is well on its way to emerge as a major player in global economy. Some support also came after continuing its good run for the sixth day at a stretch, the rupee appreciated against the US dollar in early trade at the Interbank Foreign Exchange on continued selling of the greenback by exporters and banks amidst higher opening in the domestic equity market. Investors maintained a cautious approach with the RBI Deputy Governor SS Mundra’s statement that Banks may have to set aside more money as buffer against bad loans (non-performing assets) as recoveries are becoming difficult and resolutions few and far between. Mundra added that historical correlation between GDP growth and banks’ credit expansion is fast eroding due to proliferation of other institutions, and lenders will have to make a slew of changes to regain their share. Traders were seen piling up positions in Oil & Gas, Auto and Realty stocks, while selling was witnessed in FMCG sector stocks. In scrip specific development, ICICI Prudential Life Insurance was trading in red after debuting on the stock exchange becoming the first Indian insurer to get listed on stock exchanges. The IPO that ran between September 19 and September 21 was the biggest since the Coal India issue in 2010. The IPO was sold in the price band of Rs 300-334 and it was over-subscribed 10 times. MCX was trading firm after the Securities and Exchange Board of India (SEBI) allowed the commodity exchanges to launch options contracts in commodities. The market may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. September 2016 series to next month i.e. October 2016 series. The near month September 2016 derivatives contracts will expire today i.e. September 29, 2016.

On the global front, Asian stocks were higher, on account of overnight rally in oil prices amid reports that oil producers finally agreed to cut production levels. In China, the Shanghai Composite rose as liquidity flows in the market were watched ahead of a major holiday period next week. Downward pressure on China’s trade is growing due to various destabilizing factors. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,750 and 28,300 levels respectively. The market breadth on BSE was positive in the ratio of 1383:714, while 170 scrips remained unchanged.

The BSE Sensex is currently trading at 28374.73, up by 81.92 points or 0.29% after trading in a range of 28371.44 and 28475.57. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.28%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.08%, Auto up by 0.78%, Realty up by 0.77%, PSU up by 0.61% and Consumer Durables up by 0.52%, while FMCG down by 0.02% was the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 1.76%, ONGC up by 1.41%, Reliance Industries up by 1.40%, Mahindra & Mahindra up by 1.21% and Power Grid up by 1.15%.

On the flip side, Axis Bank down by 1.03%, Bharti Airtel down by 0.84%, Hindustan Unilever down by 0.76%, ICICI Bank down by 0.67% and ITC down by 0.55% were the top losers.

Meanwhile, in order to help the roll-out of the goods and services tax (GST), the Cabinet Committee on Economic Affairs (CCEA) has cleared IT project Saksham, a new indirect tax network for systems integration of the Central Board of Excise and Customs (CBEC). The total project cost is estimated around Rs 2,256 crore, which will be incurred over seven years and the upgrade of the IT systems will be carried out while keeping the existing taxpayer services running.

The government has stated that the project would facilitate extension of the Indian Customs Single Window Interface for Facilitating Trade (SWIFT) and other taxpayer initiatives under ‘Digital India’ and ease of doing business of the CBEC. The implementation strategy for the project will be to ensure readiness of CBEC's IT framework by April, 1, 2017, when GST is to be introduced.

Project Saksham will help in implementation of GST, extension of the Indian Customs Single Window Interface for Facilitating Trade (SWIFT) and other taxpayer-friendly initiatives under Digital India and Ease of Doing Business of CBEC. All taxpayers/importers/exporters/dealers under various indirect tax laws administered by CBEC-presently about 36 lakh- are likely to go up to over 65 lakh after introduction of GST. CBEC's IT structure needs to integrate with the Goods and Services Tax Network (GSTN) for processing of registration, payment and returns data sent to CBEC as well as act as a front-end for other modules like audit, appeal and investigation.

The CNX Nifty is currently trading at 8774.45, up by 29.30 points or 0.34% after trading in a range of 8770.75 and 8800.65. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.24%, Eicher Motors up by 1.80%, GAIL India up by 1.66%, Mahindra & Mahindra up by 1.51% and Reliance Industries up by 1.40%.

On the flip side, Axis Bank down by 1.07%, Aurobindo Pharma down by 0.79%, Hindustan Unilever down by 0.79%, ICICI Bank down by 0.61% and Bharti Airtel down by 0.59% were the top losers.

The Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 4.9 points or 0.29% to 1,669.86, Shanghai Composite increased 15.88 points or 0.53% to 3,003.73, KOSPI Index increased 16.66 points or 0.81% to 2,069.72, Jakarta Composite increased 42.06 points or 0.78% to 5,467.40, Hang Seng increased 84.49 points or 0.36% to 23,704.14, Taiwan Weighted increased 100.74 points or 1.1% to 9,295.26 and Nikkei 225 increased 260.5 points or 1.58% to 16,725.90.