Benchmarks make optimistic start; trade in fine fettle

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Tuesday, as traders opted to buy beaten down but fundamentally strong stocks after yesterday’s drubbing. Traders also took some encouragement with Prime Minister Narendra Modi’s statement at BRICS Summit 2017 that India is fast changing into one of the most open economies in the world, with improvements on global indices and the biggest ever reform GST weaving the nation into one unified market. However, gains remained capped as there were some cautiousness too with the domestic rating agency Crisil lowering its growth forecast to 7 per cent for fiscal 2018, down from 7.4 per cent earlier, as it sees disruptions arising from the implementation of the new uniform tax regime to continue to impact the economy for a few more quarters.

On the global front, Asian markets were trading mostly in red on the Korean threat to the markets. The Japanese market was once again down by over half a percent as the yen and gold extended gains and traders awaited further developments on the North Korea front. The US markets remained closed in the last session on account of Labor Day.

Back home, stocks related to realty counters firmed up in early deals, as the new Minister for Housing and Urban Affairs, Hardeep Singh Puri, has said that the government will meet the targets that have been instituted. Gold and jewellery stocks remained buzzing, as India’s gold imports in August nearly tripled from a year ago, despite sluggish domestic demand.

The BSE Sensex is currently trading at 31,811.38, up by 109.13 points or 0.34% after trading in a range of 31722.61 and 31819.80. There were 23 stocks advancing against 7 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.60%, while Small cap index was up by 0.89%.

The top gaining sectoral indices on the BSE were Energy up by 0.83%, Oil & Gas up by 0.82%, Basic Materials up by 0.80%, Consumer Discretionary Goods & Services up by 0.74% and Metal was up by 0.73%, while Telecom down by 0.52% was the lone losing index on the BSE.

The top gainers on the Sensex were Asian Paints up by 1.94%, Bajaj Auto up by 1.22%, Tata Steel up by 1.15%, Reliance Industries up by 1.00% and Tata Motors up by 0.81%. On the flip side, Bharti Airtel down by 0.93%, Sun Pharma down by 0.61%, Lupin down by 0.50%, TCS down by 0.40% and Mahindra & Mahindra down by 0.35% were the top losers.

Meanwhile, Petroleum Minister Dharmendra Pradhan has denied any change in the oil pricing mechanism and said that there is no need to change dynamic pricing regime. The petrol prices have gone up by over Rs 6 per litre since the scheme was introduced pan-India from mid-June. Under dynamic pricing regime, prices of transport fuels are revised daily. He said that it is in the interest of consumers and added that dynamic pricing ensures that the benefit of even the smallest change in international oil prices can be passed down the line to the dealers and the end-users.

Pradhan has said that daily revision in prices is good. He also said that when they started daily revisions on June 16, rates dropped in the first fortnight. Thereafter, it has increased mainly because of rise in global oil prices. Earlier, the state-run oil marketing companies used to review and revise retail fuel prices every fortnight on the basis of global crude oil prices, while the revision took effect from midnight.

Since daily revision was implemented, petrol prices have increased by Rs 6.60 to reach Rs 69.66 a litre in Delhi, while that of diesel have risen by Rs 4.02 to Rs 57.38. Petroleum products do not come under Goods and Services Tax (GST) and prices vary at locations according to state taxes. Besides, dynamic fuel pricing is followed in many developed countries and India opted for it as a response to the recent volatility in global crude oil prices.

The CNX Nifty is currently trading at 9942.20, up by 29.35 points or 0.30% after trading in a range of 9912.75 and 9948.90. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.90%, Asian Paints up by 1.65%, Yes Bank up by 1.13%, Bajaj Auto up by 1.10% and Tata Steel up by 1.06%. On the flip side, Bharti Airtel down by 1.16%, Bharti Infratel down by 1.03%, Lupin down by 0.75%, Sun Pharma down by 0.68% and Bosch down by 0.64% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 98.43 points or 0.5% to 19,409.82, Jakarta Composite slipped 15.76 points or 0.27% to 5,797.98, FTSE Bursa Malaysia KLCI shed 6.06 points or 0.34% to 1,767.10 and KOSPI Index was down by 5.66 points or 0.24% to 2,323.99.

On the flip side, Shanghai Composite rose 6.61 points or 0.2% to 3,386.19, Taiwan Weighted added 28.37 points or 0.27% to 10,598.24 and Hang Seng was up by 64.68 points or 0.23% to 27,804.94.