Benchmarks extend gains supported by Power and Capital Goods

Indian equity benchmarks extended early gains in the afternoon session, hovering near intra-day high level on increased buying by funds and retail investors. The frontline gauges were trading comfortably above the crucial 8,400 (Nifty) and 27,200 (Sensex) mark. Sentiments got a boost on optimism ahead of the annual budget to be unveiled next week. 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. Some support also came with the report 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 to stimulate demand. Meanwhile, rupee strengthened by 7 paise to 68.14 against the dollar in early trade at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks. In scrip specific development, Veto Switchgears and Cables was trading in green after bagging an order worth Rs 19 crore for supply of LED Bulbs from Energy Efficiency Services (EESL) tender.

On the global front, Asian markets were trading mostly in green in subdued trades amid renewed concerns about protectionist policies under new US President Donald Trump. Back home, the BSE Sensex is currently trading at 27269.18, up by 151.84 points or 0.56% after trading in a range of 27140.85 and 27272.24. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index was up by 0.56%.

The top gaining sectoral indices on the BSE were Power up by 1.24%, Capital Goods up by 1.06%, PSU up by 1.05%, Auto up by 0.99% and Metal up by 0.96%, while IT down by 0.40%, FMCG down by 0.28% and TECK down by 0.27% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.88%, Coal India up by 1.75%, Adani Ports &SEZ up by 1.68%, Mahindra & Mahindra up by 1.62% and Tata Motors up by 1.59%. On the flip side, Hindustan Unilever down by 1.56%, Bharti Airtel down by 1.02%, Infosys down by 0.91%, ITC down by 0.46% and GAIL India down by 0.06% were the top losers.

Meanwhile, India has rejected an informal proposal made by the European Union (EU) and Canada for a multilateral investment agreement with a provision for an investor-to-state dispute settlement (ISDS) at the World Trade Organization (WTO). The proposal was discussed at an informal meeting of key WTO members, including India, China, Brazil, Japan and Australia.

Commerce & Industry Minister Nirmala Sitharaman has said that they have rejected the informal proposal completely as they want anything to do with investments to be a bilateral thing. And they don’t believe in making investments a subject of multilateral disputes. Sitharaman added that they will have investment treaty in which companies can take the sovereign or even the regional governments to court. She also said that anything with regard to investments, they wanted to be settled by the domestic laws and courts first and only after that, an aggrieved party should appeal outside.

Sitharaman has said that other WTO member countries, including Argentina and Brazil, too did not support the move. So at this stage, to have this template for a multi-lateral approach to investment may be immature. However, the she added that India put its view informally as this was an informal discussion of WTO member countries.

On WTO issues, the minister has said that in December the countries discussed the forthcoming ministerial conference in Argentina. She also said that they reinforce that the Bali and Nairobi issues to be fulfilled and added that WTO DG Roberto Azevedo admitted that although Nairobi meeting was successful, the process was not right. She said that India wants resolution on providing safeguards to poor farmers and permanent solution for public stock holding purposes.

The CNX Nifty is currently trading at 8439.65, up by 48.15 points or 0.57% after trading in a range of 8398.15 and 8442.15. There were 41 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.81%, Idea Cellular up by 2.59%, Tata Power up by 2.39%, NTPC up by 2.09% and Ultratech Cement up by 1.90%. On the flip side, Hindustan Unilever down by 1.57%, Bharti Airtel down by 1.14%, HCL Tech. down by 1.08%, Infosys down by 1.02% and ITC down by 0.50% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 6.54 points or 0.39% to 1,677.85, Shanghai Composite rose 9.32 points or 0.3% to 3,146.10, Taiwan Weighted gained 23.9 points or 0.25% to 9,447.95, Jakarta Composite was up by 34.5 points or 0.66% to 5,285.47 and Hang Seng increased 62.83 points or 0.27% to 22,961.35. On the flip side, Nikkei 225 decreased 103.04 points or 0.55% to 18,787.99 and KOSPI Index was down by 0.23 points or 0.01% to 2,065.76.