Benchmarks continue to trade higher in tight range in noon deals

Indian equity benchmarks continue to trade in green though in a tight-band in afternoon deals with the Sensex moving over the 27,750 and the Nifty above 8,550 marks. Apart from blue chips, broader indices too participated in the gain with both mid cap and small cap indices trading up by around a percent each. Sentiment remained upbeat with a private report stating that India’s current account deficit is likely to stay below 1% of GDP this year, largely due to a sharp fall in the trade deficit as against last year. As per the report, the widening of the trade deficit will be watched closely, especially at a time when the services sector receipts and private transfers are under pressure. Appreciation in Indian rupee too was supporting the upbeat mood of the markets. The rupee appreciated by 17 paise at 66.73 against the dollar in noon deals as mixed U.S. economic data damped the outlook for U.S. interest-rate increases. Investors are keeping an eye on the government meeting on the goods and services tax (GST) for clarity on rates. The three-day meeting of the GST Council, comprising federal and state finance ministers, will decide the main tax rate and those for different sectors. In scrip specific development, Ashok Leyland gained 2.5 percent after unveiling the country's first electric bus, while Axis Bank rose nearly 1 percent after reducing its lending rates.

On the global front, the Asian markets were trading in green, 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.

The BSE Sensex is currently trading at 27769.69, up by 239.72 points or 0.87% after trading in a range of 27652.76 and 27790.49. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.00%, while Small cap index was gained 0.95%.

The top gaining sectoral indices on the BSE were Metal up by 1.30%, Realty up by 1.09%, Bankex up by 0.81%, FMCG up by 0.77%, Consumer Durables up by 0.73%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 2.75%, HDFC up by 2.60%, Adani Ports &Special up by 2.25%, ICICI Bank up by 2.09% and Reliance Industries up by 1.66%. On the flip side, ONGC down by 0.48%, Bharti Airtel down by 0.46%, Asian Paints down by 0.27% and Maruti Suzuki down by 0.13% were the top losers.

Meanwhile, global rating agency, CRISIL in its latest report has said that various reforms initiated by the government to ensure speedy approvals and clearances has aided the pace of construction of roads, which improved 40 per cent from an average 4.3 km per day in FY2014-15 to 6 km in FY2015-16 and is further likely to reach 11 km by FY2018.

The rating agency pointed the key policy reforms which include easing of the clearances process, ensuring 80 per cent land acquisition before the award of project, premium rescheduling, allowing developers to fully exit operational road projects, and introduction of the hybrid annuity model, aimed at reducing risk to increase private participation.

The rating agency’s analysis of 85 under-construction and 104 operational BOT and annuity projects awarded by the NHAI, which together span around 16,600 km, showed there has been a 13 per cent reduction in high-risk projects over the past fiscal. These risks pertain to completion of under-construction projects and debt servicing ability for operational ones. On reforms in land acquisition, CRISIL noted that of the 40 projects tendered by NHAI during 2015 and 2016 (calendar years), a large portion of the land was already in place at the time of tendering. As per the report, within the 85 under-construction BOT projects, there has been a 10 per cent reduction; however, as many as 4,600 km of projects are still in the high-risk category because delays in land acquisition and approvals increased costs by 20 per cent or Rs 11,000 crore and the financial health of sponsors remains weak.

Also, report said that the 104 operational projects shows a significant 18 per cent reduction in both length (to 2,700 km) and outstanding debt (to Rs 19,650 crore) of high-risk operational BOT projects compared with 2015. Consequently, 65 per cent of the operational portfolio has a debt service coverage ratio of over 1 times compared to 55 per cent a year back.

The CNX Nifty is currently trading at 8590.60, up by 70.20 points or 0.82% after trading in a range of 8555.90 and 8596.90. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.73%, HDFC up by 2.62%, Aurobindo Pharma up by 2.45%, Adani Ports &Special up by 2.35% and Zee Entertainment up by 2.06%. On the flip side, Bharti Infratel down by 1.91%, BPCL down by 1.34%, Idea Cellular down by 0.90%, ONGC down by 0.52% and Bharti Airtel down by 0.45% were the top losers.

The Asian markets were trading in green; FTSE Bursa Malaysia KLCI gained 7.4 points or 0.45% to 1,661.11, KOSPI Index increased 12.82 points or 0.63% to 2,040.43, Jakarta Composite jumped 28.93 points or 0.53% to 5,439.23, Shanghai Composite increased 34.4 points or 1.13% to 3,075.57, Taiwan Weighted was up by 46.36 points or 0.51% to 9,222.58, Nikkei 225 increased 63.49 points or 0.38% to 16,963.61 and Hang Seng gained 322 points or 1.4% to 23,359.54.