Bourses soar to day’s high on sustained buying activities

Extending their early gains, the local equity markets reached at their intra-day high levels in early afternoon session amid value-buying witnessed in Realty and Oil & Gas stocks. Sentiment on the street improved further with the reports stating that the government will stick to its borrowing and fiscal deficit targets for this fiscal, indicating that it has no plans to relax spending goals to prop up growth as of now. Some optimism also came with the statement of Niti Aayog member Bibek Debroy that while there may be some minor problems with the economy, it was nothing to be worried about. Moreover, the strength in rupee which extended its appreciation for the second consecutive session too was supporting the sentiments. At day’s high point, the frontline gauges were trading comfortably above the crucial 9,800 (Nifty) and 31,450 (Sensex) marks. Broader indices, too prolonging their gaining spree and were trading with gains in the range of 1.29%-1.42%. In scrip specific development, Mahindra & Mahindra (M&M) was up by over a percent after launching the ‘New Bolero Maxitruck Plus,’ its extra strong city pickup priced at Rs 5.24 lakh for BS4, ex-showroom in Hyderabad.

On the flip side, Asian markets were trading mostly in green, following the modest gains overnight on Wall Street amid optimism about US tax reforms and as higher metals prices boosted mining stocks. Back home, the BSE Sensex is currently trading at 31480.62, up by 198.14 points or 0.63% after trading in a range of 31358.98 and 31488.87. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.29%, while Small cap index was up by 1.42%.

The top gaining sectoral indices on the BSE were Realty up by 3.15%, Oil & Gas up by 1.95%, Metal up by 1.54%, Auto up by 1.42% and Consumer Disc up by 1.41%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were Bajaj Auto up by 3.09%, ICICI Bank up by 1.72%, Hero MotoCorp up by 1.64%, Mahindra & Mahindra up by 1.53% and Adani Ports & SEZ up by 1.47%. On the flip side, Hindustan Unilever down by 1.66%, Power Grid down by 1.43%, Dr. Reddy’s Lab down by 0.79%, TCS down by 0.72% and Tata Motors - DVR down by 0.20% were the top losers.

Meanwhile, the rating agency, CRISIL in its latest report has said that revival prospects of stressed coal-based power plants with a total capacity of about 21 GW are bleak for at least next few years. It also pointed out that their assets sale as well as consolidation will be slow despite various schemes being undertaken by the government.

The rating agency, in addition, has stated that a large number of plants adding up to 35 GW capacity are smarting due to issues such as lack of fuel supply agreement or coal linkage, unviable tariffs due to increase in cost of imported coal, project cost overrun due to delay in commissioning, and high receivables due to weak financial condition of procurers (state power distribution companies or discoms). It also pointed out that while the government’s SHAKTI and UDAY schemes are expected to alleviate stress related to fuel supply and delayed payments, finding offtake will be a huge challenge.

The report further said that electricity demand is likely to remain tepid at around 6 percent over next five years due to reducing electricity intensity in GDP, rising efficiency and falling technical losses. Besides, it noted that getting discoms to sign new long-term power purchase agreements (PPAs) that ensure stable offtake is going to be challenging. Adequate quantum of power tied-up under already signed PPAs, expected tepid power demand growth, likely migration of high tariff paying industrial and commercial consumers to open access and availability of low-priced power in short-term market would imply few new PPAs in the near term.

The CNX Nifty is currently trading at 9837.30, up by 68.35 points or 0.70% after trading in a range of 9795.90 and 9839.05. There were 40 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 6.78%, HPCL up by 3.20%, Eicher Motors up by 3.13%, Aurobindo Pharma up by 2.89% and Bajaj Auto up by 2.86%. On the flip side, Hindustan Unilever down by 1.65%, Power Grid down by 1.27%, Dr. Reddy’s Lab down by 1.14%, Yes Bank down by 0.94% and HCL Tech. down by 0.71% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 7.12 points or 0.21% to 3,346.76, KOSPI Index added 21.33 points or 0.9% to 2,394.47, Taiwan Weighted was up by 33.49 points or 0.33% to 10,329.94, Jakarta Composite surged 48.38 points or 0.83% to 5,889.43 and Hang Seng increased 87.12 points or 0.32% to 27,508.72.

On the flip side, Nikkei 225 decreased 6.83 points or 0.03% to 20,356.28 and FTSE Bursa Malaysia KLCI was down by 2.15 points or 0.12% to 1,755.91.