Benchmarks trade with traction in early deals; Nifty reclaims 8,400 mark

Indian equity benchmarks have made a gap-up start and are trading with traction in early deals on Tuesday, with frontline gauges recapturing their crucial 8,400 (Nifty) and 27,200 (Sensex) levels. Traders took some encouragement with SBI’s research report Ecowrap, which has said that the Government is likely to make sweeping recast of direct taxes in the ensuing Budget to give a boost to the economy following demonetization. Meanwhile, the Supreme Court paved the way for presentation of the Union Budget on February 1 as it dismissed a plea seeking its postponement in view of Assembly elections in five states.

On the global front, Asian markets were trading mostly in green at this point of time despite US President Donald Trump formally withdrawing from the Trans-Pacific Partnership (TPP) trade deal and talked of big border taxes. The US markets made a modestly lower closing in last session, amid renewed concerns about protectionist policies under new President Donald Trump.

Back home, appreciation in Indian currency too aided sentiments. The Indian rupee on Tuesday strengthened against the US dollar tracking the gains in the Asian currencies markets. Moreover, buying by domestic institutional investors in equities worth Rs 520 crore, too supported sentiments. Stocks from realty counters trading higher despite report from global rating agency Fitch that residential property sales in India are expected to witness at least 20-30 percent dip in 2017 due to demonetisation impact.

The BSE Sensex is currently trading at 27228.56, up by 111.22 points or 0.41% after trading in a range of 27140.85 and 27233.02. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.38%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.16%, PSU up by 0.90%, Power up by 0.88%, Oil & Gas up by 0.77% and Bankex up by 0.76%, while IT down by 0.46%, TECK down by 0.44% and FMCG down by 0.11% were the few losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.91%, Power Grid up by 1.52%, Tata Motors up by 1.33%, HDFC up by 1.20% and NTPC up by 1.18%. On the flip side, Hindustan Unilever down by 1.71%, Bharti Airtel down by 1.38%, Infosys down by 0.96%, TCS down by 0.34% and GAIL India down by 0.18% were the top losers.

Meanwhile, clearing the way for the presentation of the Union Budget on February 1, the Supreme Court (SC) has dismissed a public interest litigation (PIL) seeking its postponement ahead of the upcoming Assembly elections in five states, saying there was no illustration to support that the budget would influence voters mind in state elections. The states that go for election during the period are Uttar Pradesh, Uttarakhand, Manipur, Punjab and Goa.

A bench headed by Chief Justice J S Khehar refused to admit the plea and said there was not even a single concrete example that the presentation of Union Budget would influence the minds of electorate in state elections. Referring to constitutional provisions, the court said there are clear divisions of subjects, Union, State and concurrent, in the Constitution and the presentation of Union budget cannot be dependent on state polls which keep happening.

The PIL had said that the Centre be directed to present the Budget in the financial year 2017-18 which would commence from April 1, instead of the proposed February 1. It has also said the central government be restrained from declaring any relief, programme, financial budget until the states' elections are over as they would violate the Model Code of Conduct. The Election Commission had on 4 January come out with the schedule of Assembly elections to be held in the five states, including Uttar Pradesh.

However, the government defended its move to advance Budget presentation by a month saying it had made clear its intention on this way back in September 2016 so as to help begin the investment cycle right from the first day of the new fiscal that is April 1. The Centre has decided to convene the Budget Session of Parliament from January 31 to present the Budget for 2017-18 fiscal the very next day.

The CNX Nifty is currently trading at 8426.20, up by 34.70 points or 0.41% after trading in a range of 8398.15 and 8430.35. There were 45 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.85%, Yes Bank up by 1.56%, BHEL up by 1.52%, Power Grid up by 1.50% and NTPC up by 1.42%. On the flip side, Hindustan Unilever down by 1.87%, Bharti Airtel down by 1.44%, Infosys down by 1.08%, HCL Tech down by 1.01% and TCS down by 0.32% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite rose 3.03 points or 0.1% to 3,139.81; FTSE Bursa Malaysia KLCI increased 6.59 points or 0.39% to 1,677.90, Taiwan Weighted gained 17.35 points or 0.18% to 9,441.40, Jakarta Composite jumped 28.09 points or 0.53% to 5,279.06 and Hang Seng was up by 70.86 points or 0.31% to 22,969.38.

On the flip aide, Nikkei 225 decreased 45.81 points or 0.24% to 18,845.22 and KOSPI Index was down by 3.26 points or 0.16% to 2,062.73.