Benchmarks continue firm trade; Nifty holds 8700 mark

Indian equity benchmarks continued their positive trade in the late morning session on account of buying in frontline blue chip counters. The sentiments were on optimistic note with NITI Aayog Vice-Chairman Arvind Panagariya’s statement that India can become a $10 trillion economy in the next 15 years, from the existing $2 trillion, like China did in last one and a half decade. The rupee rose against the US dollar in early trade today at the forex market on increased selling of the American currency by banks and exporters. Besides, sustained foreign fund inflows, weakness of the dollar against other currencies overseas after last week’s softer-than-forecast US jobs data, and a higher opening in the domestic equity market boosted the rupee value against the dollar. Some support also came after credit rating agency CRISIL in its latest report said that revenues of companies in key sectors such as automobiles, IT services, power, steel products, telecom services, pharmaceuticals and FMCG are expected to grow 7% in the July-September 2016 quarter, compared with a marginal 2% in the year ago period. However, some cautiousness prevailed, as the World Bank in a new report has said that India, the world's largest remittance recipient in 2015, may receive a remittance of $65.5 billion this year, a drop of 5% due to weak economic growth in remittances-source countries and cyclic low oil prices. Investors have started eyeing the macro data scheduled to be announced through the week starting with factory output numbers later in the day. Currency fluctuations globally and change in oil price movement would also be keenly watched. Traders were seen piling up positions in Consumer Durables, Metal and FMCG stocks, while selling was witnessed in Realty sector stocks. In scrip specific development, Tata Steel was trading in green on reports that the company is believed to be edging closer to striking a new deal over the 15-billion-pound pension pot that stands in the way of an agreement over of its UK steelworks.

On the global front, Asian shares were trading mostly in green; as markets saw less chance of a victory by Republican nominee Donald Trump in his US presidential bid. A second debate with Democrat Hillary Clinton came and went with little immediate impact on investor thinking. Japan’s Governor Haruhiko Kuroda stated that a further cut to the Bank of Japan’s short-term interest rate is possible or its new yield curve target rates if needed. 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 1514:766, while 107 scrips remained unchanged.

The BSE Sensex is currently trading at 28116.76, up by 55.62 points or 0.20% after trading in a range of 28083.39 and 28216.64. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.44%, Metal up by 1.39%, FMCG up by 0.50%, Auto up by 0.44% and IT up by 0.37%, while Realty down by 0.67% was the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.94%, Cipla up by 1.90%, GAIL India up by 1.73%, Asian Paints up by 1.38% and Maruti Suzuki up by 0.81%.

On the flip side, HDFC down by 0.93%, Bharti Airtel down by 0.89%, ONGC down by 0.64%, Adani Ports & Special down by 0.28% and NTPC down by 0.24% were the top losers.

Meanwhile, the World Bank in its latest report on remittances has said that India, the world’s largest remittance recipient in 2015, may receive a remittance of $65.5 billion this year, a drop of 5 per cent due to weak economic growth in remittances-source countries and cyclic low oil prices. Despite the drop this year, India is likely to top the list of countries receiving remittance. In 2015, India has received about $69 billion in remittances.

As per the report, in 2016, remittance flows are expected to decline by 5 per cent in India, followed by China $65.2 billion. Pakistan positioned at number five is estimated to receive $20.3 billion. Remittance to South Asia is expected to decline by 2.3 per cent in 2016, following a 1.6 per cent decline in 2015. Remittances from the Gulf Cooperation Council (GCC) countries continued to decline due to lower oil prices and labour market ‘nationalization’ policies in Saudi Arabia. Further, it said against a backdrop of tepid global growth, remittance flows to low and middle income countries (LMICs) seem to have entered a ‘new normal’ of slow growth. In 2016, remittance flows to LMICs are projected to reach $442 billion, marking an increase of 0.8 per cent over 2015.

The World Bank said that low oil prices continued to be a factor in reduced remittance flows from Russia and the GCC countries. In addition, structural factors have also played a role in dampening remittances growth. It further said that remittances continue to be an important component of the global economy, surpassing international aid and this ‘new normal’ of weak growth in remittances could present challenges for millions of families that rely heavily on these flows and in turn, can seriously impact the economies of many countries around the world bringing on a new set of challenges to economic growth.

The CNX Nifty is currently trading at 8718.15, up by 20.55 points or 0.24% after trading in a range of 8708.60 and 8745.80. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were ACC up by 2.58%, Hindalco up by 2.41%, Tata Steel up by 2.03%, Cipla up by 1.83% and GAIL India up by 1.76%.

On the flip side, HDFC down by 0.89%, Bharti Airtel down by 0.85%, BPCL down by 0.50%, ONGC down by 0.49% and Zee Entertainment down by 0.35% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.64 points or 0.1% to 1,667.02, KOSPI Index increased 4.16 points or 0.2% to 2,057.96 and Shanghai Composite increased 35.97 points or 1.2% to 3,040.67.

On the other hand, Jakarta Composite decreased 4.46 points or 0.08% to 5,372.69. Hong Kong Stock Exchange, Tokyo Stock Exchange and Taiwan Stock Exchange were closed on account of National holiday.