Benchmarks trade jubilantly in early deals; Nifty reclaims 9,200 mark

Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals on Tuesday, with frontline gauges recapturing their crucial 29,600 (Sensex) and 9,200 (Nifty) levels. Sentiments remained up-beat with the World Bank’s latest report, in which it said that India’s economic momentum is expected to pick up speed from 6.8 percent in 2016 to 7.2 percent by 2017 after a modest setback due to weaker than expected investments and the effects of the withdrawal of large denomination bank notes. It also said that timely and smooth implementation of the GST could prove to a significant benefit to economic activity.

Global cues too remained supportive with Asian markets trading mostly in green at this point of time. Japanese Nikkei gained amid a weaker yen after the Treasury Secretary Steven Mnuchin said that the dollar’s strength is a good thing. The US markets surged in last session despite some disappointing economic data; traders mainly resorted to bargain hunting after the major bourses slipped to their month’s low.

Back home, stocks related to PSU space remained in action as government plans to sell stakes worth $5.4 billion in seven state-run companies during the current financial year as Asia's third-largest economy looks to fund its fiscal deficit amid ramped-up spending on rural areas and infrastructure. The part sale of government stakes in state-run and private firms is critical to meet the fiscal deficit target of 3.2% of gross domestic product in the year to March 2018. India aims to raise Rs 725 billion ($11.26 billion) through stake sale during the year. There was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. The market breadth remained in favour of advances, as there were 1,584 shares on the gaining side against 529 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex is currently trading at 29664.26, up by 250.60 points or 0.85% after trading in a range of 29487.78 and 29680.63. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.80%, while Small cap index was up by 1.06%.

The top gaining sectoral indices on the BSE were Metal up by 2.05%, PSU up by 1.34%, Utilities up by 1.28%, Basic Materials up by 1.24% and Power up by 1.23%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Adani Ports up by 3.23%, Tata Steel up by 2.30%, GAIL India up by 2.20%, ITC up by 1.67% and SBI was up by 1.57%. On the flip side, Coal India down by 0.73%, Mahindra & Mahindra down by 0.48%, Sun Pharma down by 0.28%, Bajaj Auto down by 0.23% and Bharti Airtel was down by 0.10% were the top losers.

Meanwhile, kicking off the disinvestment process, the government has invited legal advisers to help with stake sales in seven public sector undertakings (PSUs) including bluechips like Indian Oil Corporation (IOC), Steel Authority of India (SAIL) and National Thermal Power Corporation (NTPC), which have the potential to collectively raise over Rs 34,000 crore. The other companies on the radar are hydro-power firm NHPC, Power Finance Corporation (PFC), Rural Electrification Corporation (REC) and Neyveli Lignite Corporation (NLC) India. In the Budget 2017-18, the government has set a target of Rs 46,500 crore to be mobilised through minority stake sale and Rs 15,000 crore from strategic disinvestment.

The Department of Investment and Public Asset Management (DIPAM) has come out with request for proposals (RFPs) for appointing merchant bankers and legal advisers for stake sale in these state-owned companies. Besides, the government will sell the stakes through the offer-for-sale route, meaning by auction on stock exchanges.

As per the RFP, the government is planning to sell 3% stake in IOC out of 58.28% stake, 10% each in SAIL, NTPC, NHPC and PFC where it hold 75%, 69.74%, 74.50% and 67.80% respectively. Besides, a 15% stake in NLC India out of 90% and 5% in REC where it hold 60.64% is proposed to be put on the block. At the current market prices, the stake sale could fetch the exchequer about Rs 34,000 crore, including Rs 13,000 crore from NTPC, Rs 6,000 crore from IOC, Rs 2,500 crore from SAIL. Also, a minority stake sale in PFC could fetch Rs 4,000 crore, that in NHPC could garner Rs 3,000 crore, NLC (Rs 2,000 crore) and REC (Rs 1,000 crore).

The CNX Nifty is currently trading at 9207.20, up by 67.90 points or 0.74% after trading in a range of 9159.70 and 9215.35. There were 43 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.19%, Adani Ports up by 3.02%, Tata Steel up by 2.25%, Bank of Baroda up by 2.16% and GAIL India was up by 1.89%. On the flip side, Coal India down by 0.79%, Mahindra & Mahindra down by 0.49%, Ambuja Cement down by 0.38%, Sun Pharma down by 0.27% and Bharti Airtel was down by 0.21% were the top losers.

Asian markets were trading mostly in green; KOSPI Index rose 0.16 points or 0.01% to 2,145.92, FTSE Bursa Malaysia KLCI gained 5.14 points or 0.3% to 1,739.07, Nikkei 225 increased 24.69 points or 0.13% to 18,379.95, Taiwan Weighted added 25.98 points or 0.27% to 9,742.38 and Jakarta Composite was up by 41.34 points or 0.74% to 5,618.82.

On the flip side, Hang Seng decreased 222.21 points or 0.92% to 24,039.45 and Shanghai Composite was down by 3.64 points or 0.11% to 3,218.52.