Strong trade continues in markets; Nifty breaches 8,550 mark

After getting a magnificent start, Indian benchmark indices enlarge their gains in early trade and continue to maintain it till noon session, on account of sustained buying in frontline blue-chip counters, amid firm trade in other regional markets. Besides, mixed US economic data damped the outlook for US interest-rate increase in December. However, investors remained cautious ahead of China’s release of quarterly growth data and a policy meeting of the European Central Bank later in the week. On the domestic front, sentiments remained buoyant with private report stating that India’s current account deficit is likely to stay below 1 per cent of GDP this year, largely due to a sharp fall in the trade deficit as against last year. Some support also came with Global rating agency Moody’s stating that the draft bill to establish a new regime for resolution of troubled banks in India is credit positive as it will help to enhance overall stability of the financial system. Meanwhile, market participants will be keeping an eye on the crucial three-day meeting of the all-powerful GST Council, starting today, which will decide on the tax rate and sort out issues like compensation formula for rollout of the new indirect tax regime from April 1, 2017.

On the global front, Asian market were trading firm on Tuesday, thanks to a rebound in oil prices and the dollar consolidated recent gains although underlying risk appetite was cautious on concerns over capital outflows and weak data, especially from China. A below-par reading on Monday on manufacturing in New York offset news that overall factory production grew for the third time in four months. Investors globally expect US interest rates will rise by the end of the year, the figures tempered expectations for future hikes. Meanwhile, as campaigning for the US presidential elections enters its home stretch and concerns about the Chinese economy deepen after last week’s weak trade data, risk aversion is broadly on the rise - forcing investors to cut positions after a strong rally in risky assets in the third quarter of 2016.

Back home, stocks from Metal, Realty and Banking counters were supporting the markets’ uptrend, while those from Oil & Gas counters were adding to the underlying cautious undertone. In scrip specific development, DHFL has surged after the company reported bettter-than-expected 29% year on year growth in net profit at Rs 233 crore for the second quarter ended September 30, 2016 (Q2FY17). Moreover, Aarti Industries has jumped after the company’s board approved buyback of shares at a price of Rs 800 per share via the tender offer route.

The market breadth remained optimistic as there were 1717 shares on the gaining side against 737 shares on the losing side, while 152 shares remained unchanged.

The BSE Sensex is currently trading at 27776.48, up by 246.51 points or 0.90% after trading in a range of 27652.76 and 27781.41. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.02%, while Small cap index up by 0.96%.

The top gaining sectoral indices on BSE were Metal up by 1.31%, Realty up by 1.14%, Bankex up by 1.03%, Capital Goods up by 0.83% and FMCG up by 0.78%, while Oil & Gas down by 0.01% was the sole losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 2.65%, ICICI Bank up by 2.38%, HDFC up by 2.30%, Adani Ports &Special up by 1.95% and Reliance Industries up by 1.66%. On the flip side, Bharti Airtel down by 0.58%, ONGC down by 0.45%, Asian Paints down by 0.41%, Maruti Suzuki down by 0.09% and TCS down by 0.08% were the top losers.

Meanwhile, the government is expected to impose anti-dumping duty on imports of a chemical used in the foam industry from three countries - China, Japan and Korea, in a move to protect the domestic industry from cheap in-bound shipments.

The Directorate General of Anti-dumping and Allied Duties (DGAD) started the anti-dumping investigation concerning imports of 'Toluene DiIsocyanate (TDI)' originating in or exported from the three countries. In its investigation it said that there is sufficient prima facie evidence that the normal value of the chemical in these countries is significantly higher than the ex-factory export price, indicating prima facie that the subject goods are being dumped into the Indian market by the exporters from the three countries.

The investigation was started following a complaint from Gujarat Narmada Valley Fertilisers and Chemicals and the period of investigation is April 2015 to March 2016 (12 months). The injury investigation period will, however, cover the periods 2012-15 also. TDI is a clear liquid and is used for production of flexible polyurethane foam, furniture cushion, industrial gaskets, protective pads for sports & medical use, automobile seats, furniture, lining, and packing of electronic items, frozen foods, medicines and audio-video computer CD's.

The CNX Nifty is currently trading at 8592.10, up by 71.70 points or 0.84% after trading in a range of 8555.90 and 8594.15. There were 43 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.60%, Zee Entertainment up by 2.41%, HDFC up by 2.38%, ICICI Bank up by 2.38% and Eicher Motors up by 2.10%. On the flip side, Bharti Infratel down by 1.71%, Idea Cellular down by 1.38%, BPCL down by 0.96%, Bharti Airtel down by 0.70% and ONGC down by 0.59% were the top losers.

All the Asian markets were trading in green; KOSPI Index gained 0.47%, FTSE Bursa Malaysia KLCI increased 0.45%, Shanghai Composite jumped 1.09%, Nikkei 225 rose 0.34%, Taiwan Weighted added 0.51%, Jakarta Composite strengthened 0.53% and Hang Seng was up by 1.4%.