Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued their firm trade in late morning session on account of buying in frontline blue chip counters. The markets have entered into consolidation phase as investors closely watch GST Council meet scheduled on February 18 and assembly elections in five states that will end on March 8. The performance of Prime Minister Narendra Modi’s party in ongoing state elections will determine if the trickle of foreign money returning to Indian stocks turns into a gush. Foreign Portfolio Investors (FPIs) sold shares worth Rs 16.43 crore with gross purchases and gross sales of Rs 4,397.88 crore and Rs 4,414.31 crore, respectively. The rupee opened lower against dollar on account of selling of the US currency by banks and exporters. Traders took some encouragement with report that India’s exports continued to grow for the fifth straight month, expanding by 4.32 percent to $22.11 billion in January against $21.19 billion in the same month of 2016. Imports also rose, by 10.70 percent to $31.95 billion, during the month under review. Improved demand from the United States, European Union and Japan helped increase India’s exports for the fifth month in a row in January, indicating that demonetization has not hit exports as much as feared.

Traders were seen piling position in Realty, IT and Consumer Durables stocks, while selling was witnessed in FMCG and Bankex sector stocks. Hectic buying activity was witnessed in realty stocks on reports that private equity investments in the real estate sector increased by 26 percent during 2016 and touched a nine-year high of nearly Rs 40,000 crore. Some buying activity was witnessed in Oil & Gas sector, as the Cabinet Committee of Economic Affairs has approved the award of 31 contract areas under the Discovered Small Field (DSF) Bid Round 2016. In scrip specific development, State Bank of India (SBI) and its three of its listed associates were trading in green after Cabinet approved a proposal to merge the five subsidiaries with the parent, which will create a mammoth bank with 23,000 branches. SBI, State Bank of Bikaner & Jaipur (SBBJ), State Bank of Travancore (SBT) and State Bank of Mysore (SBM) were trading in green, while the rest two associate banks - State Bank of Patiala and State Bank of Hyderabad - are unlisted. Dr. Reddy’s Laboratories was trading in red after the United States District Court for the District of New Jersey issued its opinion regarding Helsinn Healthcare’s patent infringement claims against Dr. Reddy’s proposed palonosetron product.

On the global front, Asian shares were trading mostly in red, as markets tread cautiously on growing prospects for a Fed rate hike in March. Japan’s stock exchange fell with Toshiba shares down amid mounting troubles over efforts to restructure operations after a massive write-down related to its US nuclear unit. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,700 and 28,100 levels respectively. The market breadth on BSE was positive in the ratio of 1356:883, while 122 scrips remained unchanged.

The BSE Sensex is currently trading at 28185.31, up by 29.75 points or 0.11% after trading in a range of 28146.19 and 28264.67. There were 18 stocks advancing against 12 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 0.57%.

The top gaining sectoral indices on the BSE were Realty up by 2.30%, IT up by 1.23%, Consumer Durables up by 1.06%, TECK up by 0.96% and Auto up by 0.68%, while FMCG down by 0.65% and Bankex down by 0.03% were the only losers on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.49%, GAIL India up by 1.83%, Tata Motors up by 1.71%, Maruti Suzuki up by 1.54% and Infosys up by 1.49%.

On the flip side, ICICI Bank down by 1.92%, ITC down by 1.54%, Adani Ports & Special Economic Zone down by 1.26%, Dr. Reddy’s Lab down by 1.16% and Coal India down by 0.92% were the top losers.

Meanwhile, Confederation of Indian Industry (CII) has said that the bilateral trade between India and the United Arab Emirates (UAE) is all set to touch $100 billion by the year 2020 with rising interest by the Indian companies towards the Middle East markets, especially the UAE. It also noted that the trade between two countries is estimated around 60 billion dollar currently.

To further boost trade and investment relations, CII together with Ministry of Commerce & Industry, Government of India has arranged to showcase Indian Industry Participation at Middle East Electricity Exhibition. About 50 leading Indian firms are participating at the exhibition which has opened on February 14 at the Dubai World Trade Centre displaying a wide variety of Electrical Products and Instruments ranging from Cables to Conductors, Capacitors, Transformers and Switchgear Products.

The industry body has stated that the various initiatives taken by the government and the announcements made in the recent Budget 2017 shall certainly enrich industries’ competitiveness in the country and in particular the micro-small and medium enterprises (MSMEs). CII also pointed out that the step towards reducing the corporate tax rate for small companies will have a positive impact on the viability of around 67 lakh businesses in India. It added that as the MSMEs become more viable and sustainable, the overall attractiveness of the small businesses will increase leading to the positive orientation and entrepreneurship in the country is bound to grow.

The CNX Nifty is currently trading at 8737.80, up by 13.10 points or 0.15% after trading in a range of 8719.60 and 8751.45. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 2.30%, Tata Motors - DVR up by 1.71%, Infosys up by 1.68%, Eicher Motors up by 1.65% and Tata Motors up by 1.62%.

On the flip side, ICICI Bank down by 1.99%, Dr. Reddy’s Lab down by 1.54%, BPCL down by 1.53%, ITC down by 1.41% and Adani Ports & Special Economic Zone down by 1.23% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 96.96 points or 0.5% to 19,341.02, Taiwan Weighted decreased 40.64 points or 0.41% to 9,759.12, Jakarta Composite decreased 4.28 points or 0.08% to 5,376.39, FTSE Bursa Malaysia KLCI decreased 3.06 points or 0.18% to 1,706.73 and KOSPI Index decreased 2.85 points or 0.14% to 2,081.01.

On the other hand, Shanghai Composite increased 8.11 points or 0.25% to 3,221.10 and Hang Seng increased 74.91 points or 0.31% to 24,069.78.