Benchmarks extend gains; trade near intra-day high levels

Indian equity indices, going strength to strength, were trading near day’s high points in afternoon deals on the back of increased buying by participants. At present, Sensex and Nifty were trading above the crucial 31,200 and 9,600 levels respectively, with gains of over 0.90%. The sentiments were on optimistic note since beginning of the session, with Moody’s Investors Service stating that implementation of the GST will be positive for India’s rating as it will lead to higher GDP growth and increased tax revenues. The agency expects improved tax compliance to be driven by incentivisation of tax credits in a GST system. Some support also came with report that the government ramped up capital spending by nearly 60% in the first two months of the current financial year. Besides, firm global cues too aided the uptrend. In scrip specific development, Eicher Motors was up by over two percent on its motorcycle division reporting a 25% jump in total sales in June 2017 at 63,160 units, as against 50,682 units in the same month last year.

On the global front, Asian markets were trading mostly in green, as private sector survey on China's manufacturing showed a surprise recovery in activity, adding to the evidence of steadying growth in the world's second largest economy. Back home, the BSE Sensex is currently trading at 31231.10, up by 309.49 points or 1.00% after trading in a range of 31017.11 and 31258.33. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.95%, while Small cap index up by 1.05%.

The top gaining sectoral indices on the BSE were FMCG up by 3.51%, Metal up by 1.67%, Telecom up by 1.44%, Basic Materials up by 1.41% and Consumer Durables up by 1.27%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were ITC up by 6.04%, Maruti Suzuki up by 1.49%, Infosys up by 1.29%, Mahindra & Mahindra up by 1.21% and Coal India up by 1.11%. On the flip side, NTPC down by 1.07%, Wipro down by 0.91%, Bajaj Auto down by 0.83%, Kotak Mahindra Bank down by 0.80% and Dr. Reddy’s Lab down by 0.43% were the top losers.

Meanwhile, the Union Cabinet is likely to approve the policy for reviving 40 hydro power projects of 11,639 MW which will entail a total investment of Rs 16,709 crore, in the month of July. Under this, all large and small hydro projects will be treated as renewable energy. Once policy approved, the distinction between large and small hydro plants would go, which would enable India to achieve clean power capacity of 225 GW by 2022.

Presently, a hydro power project of up to 25 MW is classified under renewable energy and is entitled to various incentives provided by the government. Projects beyond this capacity are not in this category and hence not entitled to the benefits. Out of the 30 GW installed power generation capacity, 44.59 GW comes from large hydro projects (above 25 MW) and 57.26 GW from other renewable power generation capacities. The Government has set a target of 175 GW renewable power installed capacity by the end of 2022. This includes 60 GW from wind power, 100 GW from solar power, 10 GW from biomass power and 5 GW from small hydro power.

Under the policy, the government will provide interest subvention of 4 percent during construction for up to 7 years and for 3 years after the start of commercial operation to all hydro power projects above 25 MW. Funding for the policy will come from coal cess or national clean energy fund or non- lapsable central pool of resources for northeastern states for eight years till 2024-25. A Hydro Power Fund would be created under the power ministry for providing funds to the projects under the policy. The policy also provides for Hydro Purchase Obligation (HPO) for hydro projects of over 25 MW capacity. Under this, the discoms would be mandated to buy a proportion of power from these plants.

The CNX Nifty is currently trading at 9611.50, up by 90.60 points or 0.95% after trading in a range of 9543.55 and 9618.00. There were 38 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were ITC up by 6.15%, Bharti Infratel up by 4.12%, Hindalco up by 2.93%, Vedanta up by 1.91% and Eicher Motors up by 1.83%. On the flip side, HCL Tech. down by 1.43%, NTPC down by 1.23%, Wipro down by 0.91%, Bajaj Auto down by 0.90% and Kotak Mahindra Bank down by 0.85% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 0.4 points or 0.01% to 3,192.83, KOSPI Index rose 2.69 points or 0.11% to 2,394.48, Taiwan Weighted added 17.72 points or 0.17% to 10,412.79, Nikkei 225 surged 22.37 points or 0.11% to 20,055.80, Jakarta Composite was up by 36.82 points or 0.63% to 5,866.53 and Hang Seng increased 52.72 points or 0.2% to 25,817.30.

On the flip side, FTSE Bursa Malaysia KLCI was down by 0.58 points or 0.03% to 1,763.09.