Indian equity markets sustain gains; Nifty comfortably sails past 8700 mark

Indian frontline equity indices are trading on a steady note on Thursday’s noon trades, maintaining over half a percent gain, as investors continue to pile up hefty positions in frontline blue chip counters, amid positive global cues. Good gains in Wall Street overnight and a fairly steady trend in Asian markets buoyed up sentiment on the Indian bourses. Sensex gained more than 150 points, while Nifty holding its 8,700 mark. Sentiments got further stimulation from Prime Minister Narendra Modi’s statement that India was the fastest growing economy and that it can play a major role in providing strength to global economy that is facing slowdown.  However, gains remained capped as the GST Council’s third round of deliberations ended without a decision on the rates structure after most States objected to a proposal to levy an additional cess on demerit goods.  The GST Council will meet again on November 3-4 to take decision on the Goods and Services Tax rates, which will have four slabs. Meanwhile, Moody's Investors Service said PPP model in India's infrastructure needs to be developed further to attract more private investment in the sector that would help propel growth. While the country's PPP mechanism has seen reasonable success in some sectors over the last 20 years, the level of activity has been low in the last four fiscal years due to challenges.

On the global front, Asian markets were trading mostly higher on Thursday, propelled by strong US earnings and oil prices near a 15-month high, as the third and final US presidential debate before the November 8 election got underway. Oil traded near a 15-month high after an unexpected drop in American stockpiles. Investors are focused on whether ECB President Mario Draghi will give any indication of, if and when the central bank may begin tapering its bond purchase programme. Meanwhile, US stocks registered small gains, helped by better-than-expected earnings and rising oil prices. 

Back home, stocks from Banking, Realty and Metal counters were supporting the markets’ uptrend, while those from Oil & Gas, information technology (IT) and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, RBL Bank has rallied after the bank reported a healthy 34% year on year (YoY) jump in net profit after exceptional item at Rs 89.89 crore for the quarter ended September 30, 2016. Moreover, Aptech hit a fresh 52-week high of Rs 186, in early trade after the company reported nearly three-fold jump in consolidated net profit of Rs 7.17 crore for the quarter ended September 30, 2016.

The market breadth remained optimistic as there were 1571 shares on the gaining side against 862 shares on the losing side, while 187 shares remained unchanged.

The BSE Sensex is currently trading at 28145.83, up by 161.46 points or 0.58% after trading in a range of 28031.57 and 28212.50. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index gained 0.77%.

The top gaining sectoral indices on the BSE were Bankex up by 1.55%, Realty up by 1.25%, Metal up by 1.16%, Consumer Durables up by 0.89% and Power up by 0.50%, while Oil & Gas down by 0.22%, IT down by 0.07%, FMCG down by 0.03% and Capital Goods down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 4.57%, Adani Ports &Special up by 2.63%, SBI up by 1.65%, HDFC up by 1.41% and Axis Bank up by 1.33%. On the flip side, ITC down by 0.38%, Hindustan Unilever down by 0.24%, Cipla down by 0.15%, HDFC Bank down by 0.14% and Sun Pharma Inds. down by 0.13% were the top losers.

Meanwhile, in a bid to steer the over $100 billion steel industry out of the rut, government is working on a new steel policy to strengthen the sector and ensure that the growth is evenly spread across all the related sectors. Steel Minister Chaudhary Birendra Singh has said that “We are in favour of a new steel policy and I am already on the job.”

The minister said that India led the world in growth in production and consumption last year, which has continued so far in 2016 as well. But, we need to ensure that this growth continues and for that we have to plan accordingly and come out with a policy that ensures that not only steel, but the related sectors such as iron ore, etc also grow.

Earlier, the government’s think-tank Niti Aayog too had pitched for a “new and dynamic steel policy” to bring the industry back on track as well as meet the target of 300 million tonnes (MT) capacity by 2025. Aayog in a Working Paper on the sector had said that there is need for a new and dynamic steel policy. Seeing the current situation of the steel sector, it may be unlikely to achieve the targets envisaged in National Steel Policy 2012 i.e. a capacity of 300 MT and production of 275 MT by 2025.

The Aayog felt that there is a need to examine the entire value chain associated with the industry, from raw materials to production of finished products, to discover the bottlenecks in the sector. Beside, Aayog had also said that banks and transport unions have to be consulted and brought onboard in formulating a new policy to ensure availability of long-term finance at competitive rates and smooth, efficient transportation of materials at uniform prices, respectively.

The CNX Nifty is currently trading at 8709.35, up by 50.25 points or 0.58% after trading in a range of 8687.75 and 8727.00. There were 35 stocks advancing against 15 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were ICICI Bank up by 4.79%, Idea Cellular up by 3.60%, Bharti Infratel up by 3.20%, Adani Ports &Special up by 2.87% and Hindalco up by 2.22%. On the flip side, HCL Tech. down by 1.51%, Aurobindo Pharma down by 0.35%, Ultratech Cement down by 0.34%, ITC down by 0.25% and Cipla down by 0.24% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 0.11%, Jakarta Composite gained 0.04%, Taiwan Weighted increased 0.36%, Hang Seng added 0.54% and Nikkei 225 was up by 1.2%. On the flip side, KOSPI Index decreased 0.04% and Shanghai Composite was down by 0.03%.