Benchmarks trade in green in early deals; Sensex reclaims 29,500 mark

Buoyed by firm global cues, Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Friday, with frontline gauges recapturing their crucial 29,500 (Sensex) and 9,150 (Nifty) levels. Sentiments remained upbeat with International Monetary Fund (IMF) in its report stating that India’s growth has been ‘impressive’ in the recent years which makes room for tax broadening efforts by the government. Meanwhile, select stocks from banking counter remained under pressure, as global ratings agency Fitch in its latest report has said that Reserve Bank of India’s (RBI’s) updated prompt corrective action (PCA) rules can potentially impact more than half of the NPA-laden state-run banks. It said that more than half of state-owned banks would breach at least one of the new thresholds, mainly owing to high NPLs, based on their latest financial reports.

On the global front, Asian markets rallying at this point of time on optimism for a U.S. tax overhaul and the yen weakens after Bank of Japan Governor Haruhiko Kuroda said he will keep accommodative policy in place. US stocks rallied on Thursday, with the Nasdaq closing at a record, as a round of solid earnings led by American Express pushed equities higher.

Back home, 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 1,461 shares on the gaining side against 579 shares on the losing side, while 80 shares remain unchanged.

The BSE Sensex is currently trading at 29504.16, up by 81.77 points or 0.28% after trading in a range of 29451.33 and 29584.34. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.43%, while Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were Energy up by 1.40%, Oil & Gas up by 1.14%, Telecom up by 1.08%, Consumer Durables up by 1.07% and Realty was up by 1.00%, while Healthcare down by 0.19%, Metal down by 0.14% and Basic Materials was down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.45%, GAIL India up by 1.28%, NTPC up by 1.22%, ONGC up by 0.95% and Bharti Airtel was up by 0.93%. On the flip side, Sun Pharma down by 1.61%, Cipla down by 0.70%, Power Grid down by 0.65%, TCS down by 0.57% and Mahindra & Mahindra down was by 0.46% were the top losers.

Meanwhile, after witnessing a decline in the month of February, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) have surprisingly surged to 4-month high of Rs 1.78 lakh crore at the end of March despite stringent norms put in place by Sebi to curb inflow of illicit funds. According to Securities and Exchange Board of India (SEBI) data, total value of P-note investments in Indian markets including equity, debt and derivatives, at March-end, has surged to Rs 178,437 crore, from Rs 170,191 crore at the end of February. Prior to that, the total investment value through P-notes stood at Rs 175,088 crore in January-end and Rs 157,306 crore in December-end.

Of the total, P-note holdings in equities at January-end were at Rs 111,803 crore, while in debts and derivatives were at Rs 12,475 crore and Rs 54,160 crore respectively. The quantum of FPI investments via P-notes remained unchanged at 6.6 percent in March. P-notes are issued by registered Foreign Portfolio Investors to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly. They however need to go through a proper due diligence process.

P-Notes, long vilified for the anonymous nature of their investors and suspected as a route for money laundering, are seeing rising interest among short-term foreign investors as the general anti-tax avoidance rule (GAAR) became applicable from 1 April. Under GAAR, foreign investors would need to prove that such structures are not aimed at evading taxes. Investing via P-Notes has a lower tax liability of 7.5-8 percent.

The CNX Nifty is currently trading at 9161.20, up by 24.80 points or 0.27% after trading in a range of 9148.80 and 9183.65. There were 34 stocks advancing against 16 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Reliance Industries up by 2.48%, Bharti Infratel up by 1.66%, GAIL India up by 1.38%, Tech Mahindra up by 1.36% and NTPC up by 1.19%. On the flip side, Grasim Industries down by 1.74%, Sun Pharma down by 1.68%, Cipla down by 0.85%, Hindalco down by 0.83% and Power Grid down by 0.79% were the top losers.

All the Asian markets were trading in green; Shanghai Composite rose 2.3 points or 0.07% to 3,174.40, FTSE Bursa Malaysia KLCI increased 10.72 points or 0.62% to 1,752.33, Hang Seng gained 18.18 points or 0.08% to 24,075.16, KOSPI Index surged 18.64 points or 0.87% to 2,167.79, Jakarta Composite jumped 33.04 points or 0.59% to 5,628.35, Taiwan Weighted added 73.91 points or 0.77% to 9,706.60 and Nikkei 225 was up by 152.29 points or 0.83% to 18,582.78.