Indian equity markets sustain gains; Nifty holds above 9,500 level

After making a gap-up start, Indian benchmark indices continued to trade in fine fettle in noon deals, on continued buying activities by both funds and retail investors. Sentiments got a boost after the report that India retained its numero uno position being the world's top most greenfield FDI investment destination for the second consecutive year, attracting $62.3 billion in 2016. FDI by capital investment saw an increase of 2%to $62.3 billion in 809 projects during 2016 in India. The report has pointed that the global investment landscape has changed considerably in the last year as FDI gravitated to locations experiencing the strongest economic growth, while locations in recession or facing high levels of uncertainty saw major declines. Some support also came with private weather forecaster Skymet’s statement that the increase in pre-monsoon showers across India is hinting at the arrival of monsoon 2017, which is not very far away. The weather forecasting agency predicted that monsoon will make an onset over Kerala by May 29, with a margin of error of three days.

Meanwhile, the rollover percentage of the Nifty futures for the May series stood at 74%, which is higher than the average rollovers of 69% in last three series, while the market-wide rollovers came in at 76% as compared to the average rollovers of 75% in the last three series. Further, Hindustan Construction Company (HCC), Kajaria Ceramics, National Aluminium Company (Nalco), RBL Bank and the Ramco Cements were trading mixed, following their inclusion in the NSE derivatives segment with effect from today.

On the global front, Asian markets were trading mixed on Friday, as investors weighed Wall Street's latest gains on strong earnings report against the latest oil production cut, which dragged down crude prices and commodity shares. The Japanese market is modestly lower, with a stronger yen weighing on investors’ sentiments. Further, Sterling continued its decline after a poll showing British Prime Minister Theresa May's lead narrowing less than two weeks before the election came on the heels of disappointing economic data on Thursday. Meanwhile, OPEC and non-members led by Russia decided on Thursday to extend cuts in oil output by nine months to March 2018 as they battle a global glut of crude after seeing prices halve and revenues drop sharply in the past three years.

Back home, stocks from Metal, Telecom and Consumer Durables counters were supporting the markets’ uptrend, while those from Oil & Gas, PSU and Healthcare counters were adding to the underlying cautious undertone. In scrip specific development, Dr. Reddy’s Laboratories surged after US Food and Drug Administration (USFDA) has completed audit of the company’s Formulations Srikakulum Plant (SEZ) Unit II, Andhra Pradesh on May 25, 2017 with zero observations. Furthermore, Fortis Healthcare gained after the company received its board's approval to enhance the ceiling limit on total holdings of FII/SEBI approved sub-accounts of FIIs, FPIs, QFIs, Non Resident Indians (NRIs) and Person of Indian Origin (PIO) under the Portfolio Investment Scheme up to 74% of the paid-up equity capital of the Company.

The market breadth remained optimistic, as there were 1661 shares on the gaining side against 636 shares on the losing side, while 121 shares remained unchanged.

The BSE Sensex is currently trading at 30897.13, up by 147.10 points or 0.48% after trading in a range of 30745.57 and 30933.21. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.01%, while Small cap index up by 1.22%.

The top gaining sectoral indices on the BSE were Metal up by 3.58%, Basic Materials up by 1.97%, Telecom up by 1.32%, Consumer Durables up by 1.31% and Industrials up by 1.20%, while Oil & Gas down by 0.50%, PSU down by 0.32% and Healthcare down by 0.11% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.88%, Bharti Airtel up by 2.27%, Adani Ports & SEZ up by 1.91%, Asian Paints up by 1.84% and Reliance Industries up by 1.62%. On the flip side, Cipla down by 2.50%, Sun Pharma down by 1.66%, SBI down by 1.33%, Hindustan Unilever down by 1.02% and TCS down by 0.72% were the top losers.

Meanwhile, Union Road Transport and Highways Minister Nitin Gadkari will soon be urging Finance Minister Arun Jaitley to bring down Goods and Services Tax (GST) rates on hybrid vehicles and other automobiles that run on alternative fuels. As per the GST Council’s fourteenth meeting hybrid cars, which are considered eco-friendly will attract a 15% cess over and above peak rate of 28%, same as those of large luxury cars and SUVs. Currently, hybrid vehicles attract excise duty of 12.5% with an effective overall tax rate of 30.3%.

Road Transport and Highways Minister said ‘I will be meeting Arun Jaitley soon to request that tax slabs for vehicles run on ethanol, bio diesel, bio CNG should be reduced. I will also request him to reduce tax rate on hybrid vehicles in order to tackle air pollution in the long run.’ The minister, who also holds Shipping portfolio, said that the government's policy is to promote electric mobility in the country and GST rate on electric vehicles has been kept at 12%.

Gadkari further said that in order to reduce India's import of crude oil, electric and hybrid vehicles along with alternate fuels like ethanol should be encouraged, and added that India import crude worth Rs 7 lakh crore. Electric, ethanol, bio diesel, bio CNG these are import substitutes and are cost effective, pollution free and indigenous too. He also said that if such vehicles are encouraged on a large scale, the cost will also come down. Besides, the automobile industry has also expressed concern on the high rate on hybrids stating it would put a spanner in the wheels of government plans to promote green vehicles.

The CNX Nifty is currently trading at 9539.45, up by 29.70 points or 0.31% after trading in a range of 9495.40 and 9562.10. There were 30 stocks advancing against 20 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Tata Steel up by 5.01%, Hindalco up by 4.75%, Vedanta up by 4.41%, Bharti Airtel up by 2.10% and Adani Ports & SEZ up by 1.85%. On the flip side, IOC down by 4.49%, BPCL down by 2.57%, Cipla down by 2.48%, Sun Pharma down by 1.65% and SBI down by 1.64% were the top losers.

Asian markets were trading mixed; Nikkei 225 decreased by 95.42 points or 0.48% to 19,717.71, Hang Seng declined 8.29 points or 0.03% to 25,622.49, Taiwan Weighted slipped 6.54 points or 0.06% to 10,101.95 and FTSE Bursa Malaysia KLCI was down by 0.66 points or 0.04% to 1,773.30.

On the other hand, Shanghai Composite rose 2.6 points or 0.08% to 3,110.43, Jakarta Composite increased by 11.74 points or 0.21% to 5,715.17 and KOSPI Index was up by 12.02 points or 0.51% to 2,354.95.