Benchmarks add strength; trades in green

Indian equity benchmarks added strength and erased losses to trade above neutral line in the late morning session on account of buying in frontline blue chip counters. Today, the last trading session of the Samvat year 2072 marks the beginning of the November series of derivatives contracts. The subdued start of the new series got support with Finance Minister Arun Jaitley’s statement that the economic situation in Asia is not as pessimistic as the rest of the world, and it has a higher growth potential. Though, he also said India will have to undergo rapid urbanization in the next two decades and conceded that management or urban infrastructure, especially of water will become a serious challenge. Separately, demonstrating a sense of confidence among global investors, latest data from the Securities and Exchange Board of India (SEBI) showed that more than 1,300 new foreign portfolio investors (FPIs) have registered with capital markets regulator SEBI in April-August of 2016-17, showing a sign of their willingness to be part of India’s growth story. In the last fiscal, a total of 2,900 FPIs had received approval from SEBI. The number of FPIs with SEBI approval increased to 5,626 at the end of August from 4,311 in March-end, reflecting an addition of 1,315 such investors. FPI investors consider India as a preferred and stable market, given its macro-economic stability, long-term growth prospects and ongoing economic and social reforms.

Investors however maintained a cautious approach with report that foreign institutional investors continued to remain sellers in Indian equities with net sales of Rs 470 crore on Thursday, as per provisional stock exchange data. Investors will be eyeing the quarterly results whereby in all a total of 101 companies would announce September quarter results scheduled for today. The list includes Bajaj Auto, Grasim Industries, Eicher Motors, Colgate-Palmolive, IDFC, Marico, Nestle India, Strides Shashun and UPL. Through the week, 475 BSE-listed companies are scheduled to announce their September quarter results. The Q2FY17 earning has been mixed so far. Though Auto, Pharma and Energy firms have put up a good showing, major disappointments have come from Private Banks, IT, FMCG and Cements. Traders were seen piling position in Metal, Auto and Realty stocks, while selling was witnessed in FMCG sector stocks. In scrip specific development, Noida Toll Bridge, a toll operator for Delhi-Noida road better known as DND Flyway, continued its slide following an order by the Allahabad High Court to make the flyway toll free. The court pronounced its judgment on Wednesday in response to a public interest litigation filed in 2012 by Federation of Noida Resident Welfare Association.

On the global front, Asian shares were trading mostly in red. Japan’s core consumer prices fell for a seventh straight month and household spending slumped in September, endorsing the central bank’s view it will take some time for inflation to accelerate to its 2 percent target as the economy stagnates. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,600 and 27,900 levels respectively. The market breadth on BSE was positive in the ratio of 1494:651, while 185 scrips remained unchanged.

The BSE Sensex is currently trading at 27977.04, up by 61.14 points or 0.22% after trading in a range of 27789.84 and 27991.74. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.96%, while Small cap index was up by 0.91%.

The top gaining sectoral indices on the BSE were Metal up by 1.90%, Auto up by 1.27%, Realty up by 0.84%, PSU up by 0.83% and Consumer Durables up by 0.64%, while FMCG down by 0.02% was the sole losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.58%, Coal India up by 2.32%, Dr. Reddy’s Lab up by 1.81%, Tata Steel up by 1.39% and Adani Ports & Special Economic Zone up by 1.33%.

On the flip side, ICICI Bank down by 1.20%, Cipla down by 0.89%, Bharti Airtel down by 0.87%, Asian Paints down by 0.76% and GAIL India down by 0.72% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has said that situation in Asia is not as pessimistic as the rest of the world, as there is still a lot of growth potential and that is why the Asian growth rate is much higher as compared to the other global growth rate. 

Talking about India though Jaitley said that in the next two decades India will have to go for rapid urbanization and conceded that management or urban infrastructure, especially of water will become a serious challenge with more and more people shifting to cities. He also said that today, they have 31 per cent of population in urban areas and over the next two decades the figure is going to increase significantly. He added that when this figure increases over the next two decades, we will see urban India really becoming a nerve-centre or hub of growth.

About elements of urban infrastructure, he said that power supply will increase considering growth in the sector and there is substantial improvement in roads. He added that power supply and roads will continue to improve but the availability of water may become a serious challenge.  Giving the example of Delhi and Mumbai, he said that key urban centres in States also act as engines of growth. 

As for the global economy, Jaitley felt that it has seen a far more serious challenge in the last few years. Overall, he said that while there is a lot of generic talk about using all the tools available with the government, monetary or fiscal, structural changes to prepare India in this time of poor global growth, but there are few ideas on how to actually do so.

The CNX Nifty is currently trading at 8645.45, up by 30.20 points or 0.35% after trading in a range of 8581.75 and 8649.40. There were 35 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 6.21%, Tata Motors - DVR up by 2.91%, Coal India up by 2.64%, Tata Motors up by 2.58% and Zee Entertainment up by 2.35%.

On the flip side, ICICI Bank down by 1.35%, BPCL down by 1.27%, Cipla down by 1.13%, Bharti Airtel down by 0.97% and GAIL India down by 0.79% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 121.01 points or 0.52% to 23,011.34, Taiwan Weighted decreased 19.74 points or 0.21% to 9,279.81, KOSPI Index decreased 5.18 points or 0.26% to 2,018.94, Jakarta Composite decreased 3.98 points or 0.07% to 5,412.86 and Shanghai Composite decreased 0.53 points or 0.02% to 3,111.82.

On the other hand, FTSE Bursa Malaysia KLCI increased 0.82 points or 0.05% to 1,669.85 and Nikkei 225 increased 111.49 points or 0.64% to 17,447.91.