Sensex, Nifty hold firm trade in late afternoon session

Tracking upbeat European markets, Indian equity benchmarks held firm trade in late afternoon session on optimism about a normal monsoon and healthy buying in Realty, Healthcare and Power stocks. Traders took encouragement with Moody's Investors Service’s latest report that a number of wide-ranging reforms initiated by the government would gradually ease the country's high debt burden, if implemented successfully. The agency also noted that demonetization & financial inclusion efforts will help broaden the tax base, while expenditure reforms will enhance spending efficiency and the Aadhaar identification system can help reduce fiscal leakage. Some support also came with NITI Aayog vice chairman Arvind Panagariya’s statement that India's 'fragile economy' has been turned around in the last three years and a sustained growth of 8 percent would now be possible within a few years. Meanwhile, markets regulator SEBI has launched an online registration mechanism for mutual funds with effect from June 1 to improve ease of doing business.

On the global front, European markets were trading in green, mirroring gains in global markets, after upbeat readings on U.S. private-sector employment and European factory activity stoked optimism about global growth. Asian markets were also trading in green. Back home, in scrip specific development, Steelco Gujarat jumped higher after the company commenced commercial production of new Colour Coating Line (CCL) with effect from June 01, 2017 to introduce new product, viz. Pre-Painted Galvanized Iron (PPGI) coils and sheets and with this, capacity addition in operations will be 60,000 MT per annum for annual thickness of 0.30 mm x 1220 mm steel.

The BSE Sensex is currently trading at 31285.03, up by 147.44 points or 0.47% after trading in a range of 31190.40 and 31332.56. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.71%, while Small cap index was up by 0.60%.

The top gaining sectoral indices on the BSE were Realty up by 1.39%, Healthcare up by 1.21%, Power up by 0.98%, Consumer Durables up by 0.95% and Telecom up by 0.90%, while Oil & Gas down by 0.31%, Energy down by 0.14% and Metal down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 3.07%, Hero MotoCorp up by 2.88%, Adani Ports & SEZ up by 2.39%, HDFC up by 1.79% and Dr. Reddy’s Lab up by 1.75%. On the flip side, GAIL India down by 1.54%, Hindustan Unilever down by 1.17%, Tata Steel down by 0.97%, Bajaj Auto down by 0.73% and Power Grid down by 0.72% were the top losers.

Meanwhile, after putting the Strategic Partnership (SP) policy in public domain, Defense Minister Arun Jaitley has said that the government is focused on expanding defence manufacturing within the country, noting that the new SP policy will help attract foreign direct investment (FDI) as global investors would be assured of orders.

He further highlighted the features of the policy, saying that there is only one procurer of defence equipment within India that is the government of India. Unless opening of FDI is accompanied by some reasonable possibility of a possible investor getting orders, he is not going to set up an establishment, hence the SP policy now has been brought in as it will supplement the FDI policy.

Jailey said that the government is looking at a balance between the defence public sector units and bringing private sector in defence manufacturing, with an aim to commit all national resources to it and to unleash its potential. He further added that the new policy will help to achieve this by bringing foreign companies either through FDI route or through technology transfer. Jaitley also said that the FDI changes in the sector opened the door and effort is to encourage them to set up facilities in the country.

The new SP policy aims to create a vibrant defence manufacturing ecosystem in the country through involvement of both the major Indian corporates as well as the MSME sector and is likely to reduce current dependence on imports and gradually ensure greater self-reliance & dependability of supplies essential to meet national security objectives.

The CNX Nifty is currently trading at 9656.35, up by 40.25 points or 0.42% after trading in a range of 9637.45 and 9673.50. There were 35 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Cipla up by 3.25%, Hero MotoCorp up by 3.12%, Adani Ports & SEZ up by 2.73%, Yes Bank up by 2.55% and HDFC up by 1.78%. On the flip side, GAIL India down by 2.12%, Vedanta down by 1.62%, BPCL down by 1.60%, Indiabulls Housing Finance down by 1.24% and Hindustan Unilever down by 1.13% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 2.92 points or 0.09% to 3,105.54, FTSE Bursa Malaysia KLCI increased 13.03 points or 0.74% to 1,776.14, KOSPI Index increased 27.11 points or 1.16% to 2,371.72, Taiwan Weighted increased 65.11 points or 0.65% to 10,152.53, Hang Seng increased 114.83 points or 0.44% to 25,924.05 and Nikkei 225 increased 317.25 points or 1.6% to 20,177.28. On the flip side, Jakarta Composite decreased 3.69 points or 0.06% to 5,734.46.

All European markets were trading in green; UK’s FTSE 100 increased 25.82 points or 0.34% to 7,569.59, France’s CAC increased 33.56 points or 0.63% to 5,352.23 and Germany’s DAX increased 116.77 points or 0.92% to 12,781.69.