Benchmarks extend gains in morning session

Indian equity benchmarks extended their early gains and were hovering near the highest point of the day in morning session on account of buying in front line blue chip counters. The rupee opened lower against dollar on account of buying of American currency by banks and importers. Foreign Portfolio Investors stood net sellers in domestic equity markets on Thursday and sold shares worth Rs 508.39 crore with gross purchases and gross sales of Rs 3,978.08 crore and Rs 4,486.47 crore, respectively. Traders took encouragement with World Bank President Jim Yong Kim’s statement that the Goods and Services Tax (GST) is going to have a hugely positive impact on the Indian economy. He added that the recent slowdown in India’s economic growth is an aberration mainly due to the temporary disruptions in preparation for the GST, pointing out that it will get corrected in the coming months. Some buying also crept in with Commerce and Industry Minister Suresh Prabhu’s statement that he is working closely with the Finance Ministry and other departments to firm up policy initiatives along with fiscal incentives to give a fillip to industrial growth and job creation. He added that the country’s economy is doing well and it has a huge growth potential in coming years.

Investors took note that a major revamp of the GST is on the agenda of the GST Council scheduled today as part of efforts to address the grievances of small-scale industries, traders and exporters. The package of measures expected to be taken up by the council may include an increase in the threshold limit for the composition scheme to Rs 1-1.5 crore from Rs 75 lakh to aid micro, small and medium enterprises, a more liberal exemption limit, and a lower compliance burden with quarterly rather than monthly filing apart from steps to boost exports. Separately, retirement fund body EPFO is mulling to give its subscribers an option to set aside a higher proportion of their provident fund money for equity asset class. EPFO has been raising the amount it invests in equities since 2015, when it started with 5% of the corpus. Its investment in FY16 was Rs 6,577 crore, rising to Rs 14,982 crore or 10% of its incremental corpus in the following year.

Traders were seen piling up position in Metal, Basic Materials and Utilities stocks. In scrip specific development, Aarey Drugs & Pharmaceuticals surged as it is going to consider stock split. The company’s board meeting will be held on October 12 to reconsider the sub-division of equity shares. Select stocks in aviation sector were buzzing after the IATA data showed that India’s domestic RPK -which measures actual passenger traffic rose by 16% in August compared to the corresponding month of the previous year. India’s domestic passenger traffic growth was followed by that of China at 10% and Japan at 9%.

On the global front, Asian markets were trading mostly in green ahead of a US job report later in the day. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 31,700 and 9,950 levels respectively. The market breadth on BSE was positive in the ratio of 1676:514, while 82 scrips remained unchanged.

The BSE Sensex is currently trading at 31782.04, up by 190.01 points or 0.60% after trading in a range of 31632.81 and 31796.69. 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 0.81%, while Small cap index was up by 1.07%.

The top gaining sectoral indices on the BSE were Metal up by 2.86%, Basic Materials up by 1.83%, Utilities up by 1.71%, Power up by 1.38%, PSU up by 1.38%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 4.35%, NTPC up by 2.78%, SBI up by 1.51%, Infosys up by 1.51% and Coal India up by 1.28%.

On the flip side, HDFC down by 0.61%, Tata Motors - DVR down by 0.52%, Tata Motors down by 0.30%, Hero MotoCorp down by 0.27% and Dr. Reddy’s Lab down by 0.10% were the top losers.

Meanwhile, encouraging more foreign investment in the country, Minister of Railways and Coal Piyush Goyal during the opening session at the India Economic Summit of the World Economic Forum (WEF) said that India is undergoing a change in the economic narrative and rebranding itself with technology driving growth. He said that “I think there is no better place in the world today to invest in, no larger market than the Indian market and there is no pole which is going to be more important than India for the global economy”.

The Minister emphasising on the need for a strong foundation to robust growth, said that mega structures cannot be built on a weak foundation, if India has to prepare itself for global challenges of tomorrow; the country needs to develop a framework that will ensure decades of prosperity.

He said India has huge investment potential but a change in mindset is required to transform the country and added that with sectors like coal, power showing turnaround, it’s the turn of the railways now. He said that working on various areas across the railway ecosystem in India can create 10 lakh jobs within a year and further elaborated that monetising the real estate assets as well as fast tracking some of the existing investment plans would generate a lot of employment opportunities in the railways and the ecosystem around it.

The CNX Nifty is currently trading at 9957.85, up by 69.15 points or 0.70% after trading in a range of 9906.60 and 9960.80. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.35%, GAIL India up by 3.84%, Hindalco up by 3.43%, NTPC up by 2.57% and Vedanta up by 2.50%.

On the flip side, HDFC down by 0.59%, Tata Motors down by 0.33%, Hero MotoCorp down by 0.28%, Dr. Reddy’s Lab down by 0.21% and Zee Entertainment down by 0.12% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.59 points or 0.03% to 1,759.68, Taiwan Weighted increased 3.52 points or 0.03% to 10,521.79, Nikkei 225 increased 59.11 points or 0.29% to 20,687.67 and Hang Seng increased 87.53 points or 0.31% to 28,466.71.

On the other hand, Jakarta Composite decreased 2.25 points or 0.04% to 5,899.66.

The markets in South Korea and China are closed on account of National Holiday.