Sensex, Nifty hover near highest point of the day

Indian equity benchmarks continued their firm trade hovering near the highest point of the day in the late morning session as investors and domestic institutions widened their bets amid mixed global cues. Select buying in beaten down stocks pushed equity benchmarks higher with NSE Nifty inching towards 8450 mark. The broader markets also traded in line with benchmarks on positive breadth. Short-covering by speculators ahead of January monthly derivatives contract expiry added to the upward move. The rupee opened higher against dollar on account of selling of American currency by banks and exporters. Traders took some support from 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. Also, there is buzz that the government is likely to set fiscal deficit target in the range of 3.3-3.4 percent of GDP for the financial year 2017-18 in the upcoming Budget or will target a fiscal deficit of 3.5 percent of GDP -- same as that of 2016-17.

Traders were seen piling position in Capital Goods, Consumer Durables and Power stocks, while selling was witnessed in IT, TECK and FMCG sector stocks. In scrip specific development, Gujarat State Fertilisers and Chemicals (GSFC) was trading under pressure on reporting 40 percent decline in net profit to Rs 61.17 crore for the December quarter of the current fiscal. Its net profit was Rs 103.66 crore in the October-December period of last fiscal. Karnataka Bank was trading in red after the bank on Monday reported a fall of 29.3 percent in net profit at Rs 68.52 crore for the third quarter ended December 31, 2016, as higher allocation to cover bad loans eroded benefits. The bank’s net profit in corresponding October-December quarter of 2015-16 stood at Rs 96.91 crore.  The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. January 2017 series to next month i.e. February 2017 series. The near month January 2017 derivatives contracts will expire on Wednesday i.e. January 25, 2017.

On the global front, Asian shares were trading mostly in green, even as US President Donald Trump formally withdrew from the Trans-Pacific Partnership (TPP) trade deal. The move was not a surprise as it was one of the promises made by Trump during his campaign. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,400 and 27,200 levels respectively. The market breadth on BSE was positive in the ratio of 1426:706, while 125 scrips remained unchanged.

The BSE Sensex is currently trading at 27240.98, up by 123.64 points or 0.46% after trading in a range of 27140.85 and 27254.39. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.25%, Consumer Durables up by 1.01%, Power up by 0.99%, PSU up by 0.91% and Metal up by 0.88%, while IT down by 0.55%, TECK down by 0.41% and FMCG down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.00%, Coal India up by 1.76%, Adani Ports & Special Economic zone up by 1.73%, HDFC up by 1.49% and Power Grid up by 1.40%.

On the flip side, Hindustan Unilever down by 1.93%, Bharti Airtel down by 1.27%, Infosys down by 0.92% and TCS down by 0.20% 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 8433.75, up by 42.25 points or 0.50% after trading in a range of 8398.15 and 8437.50. There were 43 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 2.66%, BHEL up by 2.26%, Coal India up by 1.99%, IndusInd Bank up by 1.97% and Larsen & Toubro up by 1.97%.

On the flip side, Hindustan Unilever down by 1.86%, HCL Technologies down by 1.67%, Bharti Airtel down by 1.41%, Infosys down by 1.12% and TCS down by 0.24% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 2.74 points or 0.09% to 3,139.51, FTSE Bursa Malaysia KLCI increased 6.49 points or 0.39% to 1,677.80, Jakarta Composite increased 29.6 points or 0.56% to 5,280.56, Taiwan Weighted increased 34.8 points or 0.37% to 9,458.85 and Hang Seng increased 76.5 points or 0.33% to 22,975.02.

On the other hand, Nikkei 225 decreased 83.47 points or 0.44% to 18,807.56 and KOSPI Index decreased 3.65 points or 0.18% to 2,062.34.