Markets trim gains; trade continues in green

Indian equity indices pared some of their initial gains in late afternoon session but continued to trade in green on the back of lower level buying. Sentiments came under pressure after the Fitch ratings in its latest report lowered India's Gross Domestic Product (GDP) growth forecast to 6.9% in FY17 from 7.4% on demonetisation. The rating agency said that economic activity will be hit in 4Q16 by the cash crunch created by withdrawal and replacement of bank notes that account for 86% of the value of currency in circulation. Market participants also remained cautious ahead of important domestic macro data like India's GDP, fiscal deficit and eight core industrial output data on November 30. On the global front, European stocks were trading flat on Tuesday as investors focused on talks between OPEC members and the political uncertainty ahead of a key referendum in Italy amid the absence of positive catalysts.

The BSE Sensex is currently trading at 26452.59, up by 102.42 points or 0.39% after trading in a range of 26357.56 and 26587.07. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.73%, while Small cap index was up by 0.92%.

The top gaining sectoral indices on the BSE were Auto up by 2.32%, Consumer Durables up by 1.04%, Realty up by 0.89%, Capital Goods up by 0.38% and Metal up by 0.16%, while IT down by 0.36%, Bankex down by 0.19%, Oil & Gas down by 0.17%, TECK down by 0.03% and PSU down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 4.10%, GAIL India up by 2.49%, Asian Paints up by 2.39%, Hero MotoCorp up by 2.13% and Mahindra & Mahindra up by 2.07%. On the flip side, Axis Bank down by 1.09%, Power Grid down by 0.92%, Sun Pharma down by 0.88%, Infosys down by 0.63% and TCS down by 0.48% were the top losers.

Meanwhile, domestic rating agency ‘ICRA Ratings’ in its latest report on Power Sector has stated that the government’s revised emission norms for thermal power projects (TPPs), which were notified in December last year, are expected to cut emissions from these big emitters by as much as 40 per cent. It has said that they are set to impact operational coal-based capacity of 187 GW and under-development capacity of 74 GW.

ICRA further said that compliance to these norms within the given timeline will be challenging, since the companies are apprehensive about the cost recoverability and timely approvals for such a cost under the change in law by the regulators. The coal-based power projects are required to invest in additional equipment capital expenditure to comply with the revised emission norms. ICRA estimates that this would entail a capital investment of Rs. 0.6 crore to Rs. 1 crore per MW, based on the ageing of the plant, amounting to an aggregate capex requirement of about Rs. 1.2 trillion1 which is likely to materialise over the next 2-3 year period, assuming implementation delays.

ICRA however, expects that the move will boost the domestic capital goods sector (power generation equipment) over the medium term, which has been hit by a slowdown in fresh orders. The MoEF has stipulated the existing TPPs to follow the revised standards by December 2017 and new projects starting their operations from January 2017 are required to comply with these norms from the commissioned date.

The revised standards seek to reduce the emission of particulate matter, sulphur dioxide, oxides of nitrogen and mercury. The revised norms also aim to reduce water consumption by all existing TPPs to 3.5 m3/MWh and require new plants commissioned on or after January 1, 2017 to keep their water consumption levels below the maximum of 2.5m 3/MWh and ensure zero waste water discharge.

The CNX Nifty is currently trading at 8173.50, up by 46.60 points or 0.57% after trading in a range of 8128.70 and 8197.35. There were 33 stocks advancing against 17 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Eicher Motors up by 5.86%, Idea Cellular up by 4.29%, Maruti Suzuki up by 4.21%, Bosch up by 2.98% and Asian Paints up by 2.68%. On the flip side, BPCL down by 1.11%, Tech Mahindra down by 1.09%, Hindalco down by 1.01%, Axis Bank down by 0.97% and Sun Pharma down by 0.89% were the top losers.

Asian markets were trading mostly in red; Hang Seng slipped 93.5 points or 0.41% to 22,737.07, Nikkei 225 dropped 49.85 points or 0.27% to 18,307.04, Taiwan Weighted decreased 29.86 points or 0.32% to 9,192.38 and FTSE Bursa Malaysia KLCI was down by 1.79 points or 0.11% to 1,626.87. On the other hand, KOSPI Index rose 0.26 points or 0.01% to 1,978.39, Shanghai Composite increased 5.92 points or 0.18% to 3,282.92 and Jakarta Composite was up by 33.67 points or 0.66% to 5,148.24.

European markets were trading mostly in red; UK’s FTSE 100 decreased 22.86 points or 0.34% to 6,776.61 and Germany’s DAX was down by 20.17 points or 0.19% to 10,562.50, while France’s CAC increased 5.53 points or 0.12% to 4,515.92.