Markets maintain upbeat mood in afternoon session

Indian equity indices maintained the upbeat mood in the afternoon session supported by positive global cues along with gains in Metal, Auto and Consumer Durables sector stocks. Sentiments were optimistic on hopes that the RBI's decision to withdraw the incremental CRR requirement will give banks more room to cut lending rates sharply. Sentiments remained up-beat after Finance Minister Arun Jaitley has said that the government’s surprise move to withdraw high-denomination bank notes of Rs 500 and Rs 1,000 may create a disruption in the short term but in the long run will lead to a cleaner economy and better GDP growth as banks will have more funds to lend.  Some support also came after Standard and Poor's (S&P) in its latest report stated that India will be less affected by changes in growth and monetary policy in the new set-up under Donald Trump administration due to its large domestic economy. Besides, appreciation in Indian rupee also aided the sentiment. Extending its gains for the third day in a row, the rupee strengthened by 22 paise to 67.41 against the US dollar in early trade at the Inter-bank Foreign Exchange on continued selling of the American currency by exporters and banks.

On the global front, Asian markets were trading mostly in green, following the record gains overnight on Wall Street and on expectations that the European Central Bank will extend its asset purchase program at its monetary policy meeting later in the day. Back home, in scrip specific development, Wipro rose over a percent after collaborating with Microsoft Accelerator to provide opportunities to Indian startups to grow their business.

The BSE Sensex is currently trading at 26636.76, up by 399.89 points or 1.52% after trading in a range of 26357.35 and 26644.95. There were 29 stocks advancing against 1 stock declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.29%, while Small cap index was up by 1.30%.

The top gaining sectoral indices on the BSE were Metal up by 2.85%, Auto up by 2.49%, Consumer Durables up by 1.68%, IT up by 1.44% and FMCG up by 1.38%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 4.34%, Tata Motors up by 3.75%, Adani Ports &Special up by 3.03%, Maruti Suzuki up by 2.81% and Bajaj Auto up by 2.51%. On the flip side, NTPC down by 0.52% were the top losers.

Meanwhile, in order to introduce a separate regulatory framework and Act for off-highway equipment, the government is going to bring legislation for construction equipment manufacturing (CEM). The proposed legislation similar to the Central Motor Vehicle Rules which soon be placed before Parliament for its enactment, will be for regulations for construction equipment which are not wheeled and for use of spurious parts. 

Department of Heavy Industry Secretary Girish Shankar has said that they have to introduce a friendlier tax structure to introduce a separate regulatory framework and Act for off- highway equipment and they have already drafted a legislation for CEM. He also said that the government is setting up the experience centre for advanced manufacturing as 4.0 industrial revolutions is already there.

He elaborated that the legislation is required because the industry has to gear itself towards quality and adoption of the right technology and discourage use of spurious spare parts. He added that his ministry has also proposed allowing the use of external commercial borrowing (ECB) to finance domestic equipment, excluding construction equipment in future FTAs, including locally produced construction equipment in export market access incentives and developing a dedicated R&D and advanced test facility.

Shankar added that the demand for construction services is expected to rise manifolds due to several factors like massive expansion of the infrastructure sector, industrialization, urbanization rise in disposable incomes and various government. He also said that in the next three years they are going to invest around 1 trillion $ in infrastructure sector.

The CNX Nifty is currently trading at 8220.00, up by 117.95 points or 1.46% after trading in a range of 8151.75 and 8225.50. There were 47 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.43% and Tata Motors - DVR up by 4.07% and Tata Motors up by 3.60% and Bosch up by 3.34% and Hindalco up by 3.23%. On the flip side, Bharti Infratel down by 1.76%, NTPC down by 0.61%, Aurobindo Pharma down by 0.58% and Dr. Reddys Lab down by 0.20% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 5.72 points or 0.35% to 1,638.19, Jakarta Composite added 12.14 points or 0.23% to 5,277.51, KOSPI Index was up by 39.18 points or 1.97% to 2,031.07, Hang Seng gained 76.45 points or 0.34% to 22,877.37, Taiwan Weighted increased 111.97 points or 1.21% to 9,375.86 and Nikkei 225 was up by 268.78 points or 1.45% to 18,765.47. On the flip side, Shanghai Composite decreased 1.56 points or 0.05% to 3,220.68.