Benchmarks trade on steady note in late morning session

Indian equity benchmarks continued their steady trade in late morning session as investors hopes Reserve Bank of India (RBI) will reduce interest rates in its policy review scheduled later in the day. Positive cues from global markets also aided sentiment. Oil prices fell on persistent doubts a planned crude production cut led by OPEC and Russia would be deep enough to end a supply overhang that has dogged markets for over two years. The rupee opened higher against the dollar amid selling of the greenback. The rupee rose to a near-three-week high against the dollar amid rising risk appetite as the euro shrugged off concerns over the fallout of the referendum in Italy. Rate cut hopes have increased since the government decision to withdraw high denomination currency notes. The street will be keenly watching the commentary on inflation and growth, and will look for clarity on Market Stabilisation Scheme (MSS) and CRR measures announced recently. Some support came with Fitch Ratings in its latest report titled ‘2017 Outlook: Emerging Asia Sovereigns’ has said that there is scope for monetary easing in India as retail inflation is holding below the 5 percent target. Fitch said that inflation of 4.2 percent in October 2016 was below the intermediate target of 5 percent by March 2017 and within the medium-term target range of 4 percent (+/-) 2 percent. Traders were seen piling position in Oil & Gas, PSU and Realty stocks, while selling was witnessed in IT, TECK and FMCG sector stocks. In scrip specific development, LT Foods was trading firm on signing joint venture agreement for south India rice business. Future Consumer, the food and FMCG arm of Future Group, has entered into a Joint Venture Agreement (JVA) on December 06, 2016 with LT Foods and Genoa Rice Mills (Genoa), for undertaking the business of manufacturing, marketing, sales, sourcing and distribution of ‘Sona Masoori / regional South Indian rice’. Sun Pharmaceutical Industries was trading in red on reports that the US health regulator has issued 14-page 483 observation letter after the inspection of Halol unit, Gujarat.

On the global front, Asian shares were trading mostly in green, tracking the positive cues overnight from Wall Street. The yuan fell against the dollar Wednesday after the People’s Bank of China set a weaker fixing at 6.8808. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,150 and 26,400 levels respectively. The market breadth on BSE was positive in the ratio of 1312:737, while 110 scrips remained unchanged.

The BSE Sensex is currently trading at 26437.07, up by 44.31 points or 0.17% after trading in a range of 26408.77 and 26469.93. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.05%, PSU up by 0.98%, Realty up by 0.71%, Auto up by 0.63% and Power up by 0.50%, while IT down by 0.30%, TECK down by 0.13% and FMCG down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 1.78%, Bharti Airtel up by 1.32%, HDFC up by 1.30%, Hero MotoCorp up by 1.08% and Power Grid up by 0.82%.

On the flip side, Sun Pharma down by 4.12%, TCS down by 0.89%, Lupin down by 0.65%, Axis Bank down by 0.37% and ITC down by 0.35% were the top losers.

Meanwhile, public sector companies or PSUs are likely to invest Rs 3 lakh crore in hydrocarbon sector in 3 years. Department of Industrial Policy and Promotion (DIPP) secretary Ramesh Abhishek has said that the government expects foreign direct investment in the hydrocarbon sector to pick up but the key driver will continue to be the public sector companies, which will invest Rs 3 lakh crore over the next three years.

Abhishek further said that in the last two and a half years our FDI policy has been hugely liberalised and the result has been positive. He added that the sector attracted 40 per cent more FDI in the past two and a half years than in the previous corresponding period. He said in last two and a half years we have attracted $ 129 billion of FDI, but there is a huge need for investment given that India is the third largest consumer of energy in the world.

Sashi Mukundan, Chairman CII National Committee on Hydrocarbons and BP India too had said that investment in exploration, development of discovered reserves, enhanced oil recovery schemes and technology will be Rs 2.5 lakh crore to Rs 3 lakh crore by 2022 and said that decisions like giving pricing freedom to gas produced from difficult fields like deepwater will help unlock 10-15 trillion cubic feet of reserves.

The CNX Nifty is currently trading at 8158.65, up by 15.50 points or 0.19% after trading in a range of 8149.90 and 8170.70. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 2.62%, BPCL up by 2.01%, Adani Ports & Special Economic Zone up by 1.86%, Eicher Motors up by 1.79% and Bharti Airtel up by 1.40%.

On the flip side, Sun Pharma down by 4.16%, Zee Entertainment down by 1.99%, Aurobindo Pharma down by 1.05%, HCL Tech down by 0.77% and Tech Mahindra down by 0.60% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.74 points or 0.17% to 1,632.47, Shanghai Composite increased 7.12 points or 0.22% to 3,206.77, Taiwan Weighted increased 8.95 points or 0.1% to 9,259.72, Hang Seng increased 67.6 points or 0.3% to 22,742.75 and Nikkei 225 increased 103.34 points or 0.56% to 18,463.88.

On the other hand, Jakarta Composite decreased 39.33 points or 0.75% to 5,233.64 and KOSPI Index decreased 0.37 points or 0.02% to 1,989.49.