Indian benchmarks extend gains; Nifty above 9200 mark

Indian markets have strengthened further in the late morning trade and the benchmark indices are near the highs of the day, up by around a percent. The broader markets also traded in line with benchmarks as the BSE Midcap and Small-cap indices rallied around a percent each on strong breadth. Around three shares advanced for every share falling on the exchange (BSE). Sentiments remained optimistic with World Bank’s report saying Indian economy will claw back to 7.2 percent growth this financial year and rise further to 7.5 percent in 2018-19. It also said that timely and smooth implementation of the GST could prove to a significant benefit to economic activity. According to World Bank, Prime Minister Narendra Modi's note ban will have a positive development impact in the long term as it accelerates financial deepening, foster financial inclusion and increase transparency. 

Some support also came with the report that Inflation based on the wholesale price index slipped to 5.70% in March due to easing fuel prices and cost decline of manufactured goods even as food prices hardened. Fuel and power inflation rose 18.16% in March from 21.02% last month. The WPI inflation, reflecting the annual rate of price rise, in February was 6.55%. Meanwhile, IT sector stocks were buzzing ahead of the country’s largest IT company Tata Consultancy Services’ earnings for the quarter ended March 31, 2017. The shareholders of the company had approved a Rs 16,000-crore share buyback plan. Furthermore, 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.

On the global front, Asian markets were trading mostly higher on Tuesday as tensions over the situation on the Korean Peninsula softened somewhat following U.S. Vice President Mike Pence's departure from South Korea for Japan. While weak commodity prices weighed on resources stocks, strong post-Easter finish on Wall Street provided upward momentum. In overnight trade, the Dow Jones Industrial Average index advanced 0.9%, while S&P500 index rose 0.86% and Nasdaq Composite index gained 0.89%.

Back home, all BSE sectoral indices were trading in the green. Among them, Metal index gained the most by 1.94%, followed by PSU 1.31%, Basic Materials 1.28% and Power 1.18%. In scrip specific development, Puravankara gained after the company signed a MoU with the Confederation of Real Estate Developers’ Associations of India (CREDAI), extending its support to the ‘Housing for All’ by 2022 mission. Moreover, Bharat Rasay surged after the company issued Commercial Paper of an aggregate amount of Rs 20 crore on April 17, 2017.

The market breadth remained positive, as there were 1704 shares on the gaining side against 601 shares on the losing side, while 95 shares remained unchanged.

The BSE Sensex is currently trading at 29684.16, up by 270.50 points or 0.92% after trading in a range of 29487.78 and 29701.19. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.85%, while Small cap index was up by 1.10%.

The top gaining sectoral indices on the BSE were Metal up by 1.91%, PSU up by 1.33%, Basic Materials up by 1.29%, Bankex up by 1.20% and Power up by 1.18%, while there were no losers on sectoral space.

The top gainers on the Sensex were Adani Ports & SEZ up by 3.28%, ICICI Bank up by 2.33%, Tata Steel up by 2.01%, Maruti Suzuki up by 1.65% and SBI up by 1.57%. On the flip side, Coal India down by 0.79%, Mahindra & Mahindra down by 0.42%, Bharti Airtel down by 0.26%, Sun Pharma down by 0.21% and Bajaj Auto down by 0.19% 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 9215.90, up by 76.60 points or 0.84% after trading in a range of 9159.70 and 9217.90. There were 42 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.97%, Adani Ports & SEZ up by 3.19%, Indian Oil Corp. up by 2.31%, Bank of Baroda up by 2.22% and ICICI Bank up by 2.18%. On the flip side, Coal India down by 0.79%, Mahindra & Mahindra down by 0.48%, Ambuja Cement down by 0.36%, Sun Pharma down by 0.27% and Bharti Airtel down by 0.26% were the top losers.

Asian markets were trading mostly in green; KOSPI Index rose 0.1%, FTSE Bursa Malaysia KLCI gained 0.27%, Nikkei 225 increased 0.3%, Taiwan Weighted added 0.27% and Jakarta Composite was up by 0.75%. On the flip side, Hang Seng decreased 0.92% and Shanghai Composite was down by 0.11%.