Firm trade prevails at highest point of the day

Indian equity benchmarks continued their firm trade oscillating near the highest point of the day in the late morning session on account of fresh buying ahead of the RBI policy review scheduled on Tuesday. Firm Asian cues on easing fears about future of German giant Deutsche Bank also gave sentiment a leg-up. The sentiments were on optimistic note with India’s core sector output rising to 3.2% in August on the back of sharp rise in steel production and a pickup in cement, suggesting a lift in infrastructure and construction activity. Steel production rose 17% to a 37-month high, aided by the low base of last year. Foreign investors pumped in more than Rs 20,000 crore into the capital market in September, making it the highest net inflow in 11 months. The trend is likely to continue in coming weeks as regulator SEBI has decided to offer direct entry to well-regulated foreign investors for investing in corporate bonds. The rupee advanced against the US dollar at the Interbank Foreign Exchange on increased selling of the American currency by exporters and banks. The rally got another leg-up after Pakistan agreed to reduce tension on border amid escalating tension on Line of Control (LoC) after India conducted surgical strike. Foreign Affairs Advisor to Pakistan Prime Minister Sartaj Aziz confirmed that National Security Advisors of both the countries made contact after surgical strike. Traders were seen piling up positions in Realty, Auto and Oil & Gas stocks, while selling was witnessed in IT sector stocks. In scrip specific development, Jubilant Life Sciences was trading firm after the company received USFDA Approval For Ruby-Fill- Rubidium 82 generator and elution system.

On the global front, Asian stocks were higher, as investors mulled the possibility of a settlement between Deutsche Bank and the US Department of Justice. Japanese data showed confidence at big manufacturers was static in September amid a strong yen and sluggish demand at home and overseas. The mood was supported by a survey showing activity in China's manufacturing sector expanded again in September, which may indicate that recent positive momentum can be sustained.  Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,700 and 28,100 levels respectively. The market breadth on BSE was positive in the ratio of 1900:369, while 77 scrips remained unchanged.

The BSE Sensex is currently trading at 28164.58, up by 298.62 points or 1.07% after trading in a range of 27919.89 and 28175.90. 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 1.66%, while Small cap index was up by 1.97%.

The top gaining sectoral indices on the BSE were Realty up by 2.63%, Auto up by 2.33%, Oil & Gas up by 1.77%, PSU up by 1.77% and Metal up by 1.61%, while IT down by 0.31% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.82%, Adani Ports & Special Economic Zone up by 2.86%, Hero MotoCorp up by 2.86%, Mahindra & Mahindra up by 2.67% and Sun Pharma up by 2.06%.

On the flip side, TCS down by 0.65%, Infosys down by 0.56% and Wipro down by 0.24% were the top losers.

Meanwhile, working on new gas pricing formula approved by the government in October 2014, the price of locally produced natural gas which is used for generating power; making fertiliser and supplying compressed natural gas (CNG) has been reduced for the fourth consecutive time. The rate has been cut by 18 percent to $ 2.5 per million British thermal unit as compared to $3.06 per mmBtu currently for a 6-month period beginning from October 1. 

The price of domestic natural gas for the period 1 October 2016 to 31 March 2017 has been fixed at  $2.50 per mmBtu on Gross Calorific Value (GCV) basis. It will affect producers like state-owned Oil and Natural Gas Corp (ONGC) as well as central government whose earnings from royalty and income tax will dip by about Rs 800 crore during the remainder of the fiscal. Rates were last cut by 20% to $3.06 from 1 April. As per the formula approved by the Narendra Modi government in October 2014, gas price is to be revised every six months using weighted average or rates prevalent in gas- surplus economies of US/Mexico, Canada and Russia The price of gas between 1 October 2015 and 31 March 2016 was $3.81 per mmBtu and $4.66 in prior six month period.

Government also announced a sharp reduction in cap price based on alternate fuels for undeveloped gas finds in difficult areas like deepsea which are unviable to develop as per the existing pricing formula. The cap for October 1, 2016 top March 31, 2017 will be $5.3 per mmBtu, down from $6.61 in April 1 to September 30 period. The reduction in natural gas prices would mean lower raw material cost for CNG and natural gas piped to households (PNG) and would translate into reduction in retail prices.

The CNX Nifty is currently trading at 8711.45, up by 100.30 points or 1.16% after trading in a range of 8635.00 and 8715.70. There were 46 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 3.94%, Zee Entertainment up by 3.33%, Hero MotoCorp up by 2.93%, Adani Ports & Special Economic Zone up by 2.92% and Mahindra & Mahindra up by 2.71%.

On the flip side, TCS down by 0.82%, Bharti Infratel down by 0.53%, Wipro down by 0.49%, Infosys down by 0.40% and HCL Tech down by 0.38% were the top losers.

The Asian markets were trading in green; Jakarta Composite increased 55.49 points or 1.03% to 5,420.29, Taiwan Weighted increased 69.2 points or 0.75% to 9,236.05, Nikkei 225 increased 143.75 points or 0.87% to 16,593.59 and Hang Seng increased 258.3 points or 1.11% to 23,555.45.

China stock exchange, South Korea stock exchange and Malaysian stock exchange was closed on account of national holiday.