Bourses pare most of the early gains to trade marginally in green

Indian markets despite paring most of their gains continue to trade in the positive territory in the late morning session. The major bourses which showed a strong rebound in early trade on fresh buying in select bluechips amid a firm trend in Asian markets, have given up most of their gains. There was some concern in the market with market regulator Securities and Exchange Board of India (SEBI) expressing its worries over stronger rupee. It has stated that the huge inflow of foreign investments into the country is having an impact on the rupee and regulators need to manage it through a calibrated system. As per SEBI data foreign portfolio investors have invested Rs 44,150 crore in Indian equities and Rs 1.29 lakh crore in debt so far this year. Meanwhile, rupee appreciated against the US currency today on dollar selling by banks and exporters and foreign fund inflows.

Markets however continued getting support from a report from investment banker Morgan Stanley that though, economic activity in the country lost some pace amid GST related disruptions but underlying growth momentum remains strong and the country may clock 6.7 percent growth this fiscal.

On the sectoral front, realty followed by healthcare and consumer discretionary were leading the chart, while some somberness was being witnessed in oil & gas and consumer durables stocks. In scrip specific movement, ICICI Prudential Life Insurance Company was up by over half a percent on announcement that ICICI Lombard General Insurance Company will launch its initial public offer of up to 8,62,47,187 equity shares on September 15.

The BSE Sensex is currently trading at 31681.09, up by 19.12 points or 0.06% after trading in a range of 31673.09 and 31814.96. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were in comparatively better position; the BSE Mid cap index was up by 0.80%, while Small cap index was higher by 0.75%.

The top gaining sectoral indices on the BSE were Realty up by 1.64%, Healthcare up by 0.71%, Consumer Disc up by 0.69%, Metal up by 0.67% and Capital Goods up by 0.59%, while Oil & Gas down by 0.14%, Consumer Durables down by 0.08%, Power down by 0.02%, PSU down by 0.02% and Energy down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.11%, Sun Pharma up by 1.11%, Mahindra & Mahindra up by 1.03%, Dr. Reddy’s Lab up by 0.97% and Axis Bank up by 0.90%. On the flip side, Tata Motors - DVR down by 1.56%, Tata Motors down by 1.45%, NTPC down by 1.29%, HDFC down by 0.66% and ITC down by 0.64% were the top losers.

Meanwhile, the domestic rating agency, ICRA in its latest report has said that rising prices of imported photovoltaic (PV) module is likely to adversely affect viability of the solar projects that were recently awarded, especially the ones where bid tariff is below Rs 3.50 a unit. It also noted that the imported PV module price level has shown an upward trend over the last three to four-months, up by about 15 percent, to about 35-37 cents per watt in August, from about 30-32 cents in May.

According to the report, this rise is due to factors such as advancement of module sourcing from China by the US companies in anticipation of imposition of anti-dumping duty on Chinese modules by December 2017. It also pointed out that another factor is the extension of feed-in tariff regime for solar power projects in China till September 2017, thereby increasing the domestic demand in the country. Further, ICRA also flagged risk of delays along with cost overruns due to disruption in delivery schedule and dishonouring of price terms agreed earlier by Chinese original equipment manufacturers (OEMs) to Indian independent power producers (IPPs).

For a solar power project with tariff of Rs 2.5 per unit, the Rating agency estimates that a 6 percent watt jump in PV module price may result in an increase of about 11 percent in capital cost and decline in project internal rate of return (IRR). Therefore, it noted that the viability of solar power projects with tariffs below Rs 3.5 per unit remains critically dependent upon ability to source modules within budgeted cost along with availability of long tenure debt at cost competitive rate.

The CNX Nifty is currently trading at 9929.15, up by 12.95 points or 0.13% after trading in a range of 9927.20 and 9964.85. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 3.58%, Eicher Motors up by 1.92%, Sun Pharma up by 1.24%, Hero MotoCorp up by 1.20% and Hindalco up by 1.20%. On the flip side, Tata Motors - DVR down by 1.61%, BPCL down by 1.50%, Tata Motors down by 1.25%, NTPC down by 1.15% and Cipla down by 0.86% were the top losers.

The Asian markets were showing mixed trend, FTSE Bursa Malaysia KLCI was up by 1.37 points or 0.08% to 1,773.85, KOSPI Index was higher by 27.66 points or 1.19% to 2,347.48, Nikkei 225 gained 39.92 points or 0.21% to 19,397.89.

On the other hand, Hang Seng declined by 82.56 points or 0.3% to 27,531.20, Jakarta Composite declined by 10.35 points or 0.18% to 5,813.79, Taiwan Weighted was down by 9.35 points or 0.09% to 10,538.51 and Shanghai Composite lost 4.9 points or 0.14% to 3,380.49.