Markets pare losses to turn positive

Indian equity benchmarks pared all of their losses in late afternoon session to enter into positive territory, on the back of buying in Energy, Healthcare and Realty stocks. Investors took encouragement with report that net direct tax collection grew by 14.8 percent to Rs 1.42 lakh crore at the end of first quarter on account of surge in advance tax payments. Some support also came with Prime Minister Narendra Modi’s statement that that GST is by far the biggest business and economic reform of India and that the country is moving towards the modern tax regime, which is transparent, stable and predictable. Besides, ICRA’s latest report that the initial public offer (IPO) financing market is expected to remain buoyant during the current financial year 2017-18 amid a strong IPO pipeline along with a favourable capital markets environment, too aided the sentiments. Meanwhile, in order to clear confusion over the new prices of items under the Goods and Services Tax, the Finance Ministry is working to set up a National Anti-Profiteering Authority to curb any unwarranted price hikes.

On the global front, European markets were trading in red, as investors looked out for fresh economic data, a G-20 meeting in Hamburg and continued to mull the possible end of monetary stimulus from central banks. Asian markets were also trading in red. Back home, in scrip specific development, Bannari Amman Spinning Mills jumped higher after the company received an approval to invest in its Joint Venture Company (JVC) - Young Brand Apparel (YBAPL). The board of directors at its meeting held on July 06, 2017 has approved for the same. After completion of this investment YBAPL will become a subsidiary of the company.

The BSE Sensex is currently trading at 31394.00, up by 24.66 points or 0.08% after trading in a range of 31286.62 and 31410.66. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.13%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Energy up by 1.41%, Healthcare up by 1.41%, Realty up by 1.06%, Oil & Gas up by 0.47% and Industrials up by 0.44%, while IT down by 0.44%, TECK down by 0.28%, Consumer Durables down by 0.16%, Bankex down by 0.12% and Utilities down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 4.14%, Reliance Industries up by 2.75%, Dr. Reddy’s Lab up by 2.04%, Cipla up by 1.36% and Bharti Airtel up by 0.96%. On the flip side, HDFC down by 1.25%, Asian Paints down by 1.04%, Bajaj Auto down by 1.03%, Infosys down by 1.02% and Hero MotoCorp down by 0.90% were the top losers.

Meanwhile, amidst a strong initial public offer (IPO) pipeline along with a favourable capital markets environment, the IPO financing market is expected to remain buoyant during the current financial year 2017-18. According to the credit rating agency, ICRA’s latest report, the present, average size of the IPO financing market which is around Rs 175 billion to Rs 225 billion per issuance, could rise to Rs 650 to 700 billion for issuances which are a large in size as well as with higher investor interest.

The credit rating agency further said that in the previous financial year, the IPO financing market remained vibrant on account of surge in high net worth individual (HNI) interest in IPOs to take benefit on the listing gains. The median subscription level for the non-institutional investor  (NII), which include HNI investors, category stood at 80 times for the IPOs in FY2017, as against 2 times for FY2016. This steep increment in the median subscription has created market for providing short-term capital to the HNI investors for the IPO application.

The report also noted that the field is dominated by non-banking financial company (NBFC) arms of some of the leading players in the capital markets and wealth management businesses. Its analysis of the issuances during the period from April 2016 to June 2017 shows that out of the total of 31 issuances, 24 issuances were listed at a premium, with median listing gains of 14%.

The CNX Nifty is currently trading at 9675.90, up by 1.35 points or 0.01% after trading in a range of 9642.65 and 9681.35. There were 25 stocks advancing against 25 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Lupin up by 4.22%, Reliance Industries up by 2.77%, Aurobindo Pharma up by 2.11%, Dr. Reddy’s Lab up by 2.06% and Cipla up by 1.61%. On the flip side, Bharti Infratel down by 2.47%, HDFC down by 1.65%, Asian Paints down by 1.21%, Ambuja Cement down by 1.15% and Indiabulls Housing Finance down by 1.08% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 124.37 points or 0.49% to 25,340.85, Taiwan Weighted decreased 70.95 points or 0.68% to 10,297.25, Nikkei 225 decreased 64.97 points or 0.32% to 19,929.09, Jakarta Composite decreased 30.23 points or 0.52% to 5,819.35, FTSE Bursa Malaysia KLCI decreased 9.71 points or 0.55% to 1,760.82 and KOSPI Index decreased 7.94 points or 0.33% to 2,379.87. On the flip side, Shanghai Composite increased 5.51 points or 0.17% to 3,217.96.

All European markets were trading in red; Germany’s DAX decreased 18.14 points or 0.15% to 12,363.11, UK’s FTSE 100 slipped 17.94 points or 0.24% to 7,319.34 and France’s CAC was down by 16.66 points or 0.32% to 5,135.74.