Benchmarks trade with minor gains in morning session

Indian equity benchmarks continued to trade in green with minor gains in morning session on account of buying in frontline counters. The rupee opened higher against dollar on account of selling of American currency by corporates. Foreign Portfolio Investors stood net sellers in domestic equity markets on Wednesday and sold shares worth Rs 379.11 crore with gross purchases and gross sales of Rs 5,982.19 crore and Rs 6,361.30 crore, respectively. Sentiments remained optimistic with a private report stating that India’s Current Account Deficit (CAD) for this financial year is expected to be around $40 billion, or 1.5% of GDP. CAD rose sharply to $14.3 billion, 2.4% of GDP, at the end of first quarter of 2017-18. Separately, after a record jump of 30 places in the World Bank’s ease of doing business ranking, India is gearing up to leapfrog into the top 50 with around 90 specific reforms lined up for various ministries. The reforms covering seven ministries are to be implemented by May next year with a focus on reducing the number of processes and moving them online. The maximum improvements targeted are in the areas of construction permits (22) and registering property (14), areas where India still has a low rank. Additionally, labour minister Santosh Gangwar has said that the government is sincerely working towards creating new avenues for jobs and self-employment in the country. Investors took note that the government may nudge cash surplus central public sector enterprises (CPSEs) to invest in the proposed Rs 1.35 lakh crore bond offering to recapitalize public sector banks. This is among the options being considered by the government.

Traders were seen piling up position in Healthcare, Consumer Durables and PSU stocks, while selling was witnessed in Metal, Auto and Realty sector stocks. In scrip specific development, NTPC was trading in red as investors turned cautious following a boiler blast at one of its plant that killed 20 people. A massive explosion ripped a boiler in the state-run power giant NTPC’s Unchahar plant in Rae Bareli district at Uttra Pradesh, killing at least twenty persons while scores suffered severe burn injuries. Mixed reactions were displayed in telecom stocks on Moody’s Investors Service report that India will be the only country where telecom sector’s revenue will continue to decline for sometime whereas rest of the markets in Asia will witness growth.

On the global front, Asian markets were trading mostly in red, as market took a breather from recent gains. China will lower tariffs and step up bank financing to support more imports as the country’s massive trade surplus has a negative impact on its citizens. China runs a vast trade surplus and has been accused by other countries including the United States of protecting domestic firms through unfair trade practices including high import tariffs. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,600 and 10,400 levels respectively. The market breadth on BSE was positive in the ratio of 1399:903, while 93 scrips remained unchanged.

The BSE Sensex is currently trading at 33631.32, up by 31.05 points or 0.09% after trading in a range of 33547.10 and 33646.90. There were 14 stocks advancing against 17 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 0.64%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.81%, Consumer Durables up by 0.85%, PSU up by 0.77%, Oil & Gas up by 0.59% and Utilities up by 0.49%, while Metal down by 0.34%, Auto down by 0.33%, Realty down by 0.22%, FMCG down by 0.13% and TECK down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.62%, Lupin up by 3.08%, ICICI Bank up by 1.58%, Cipla up by 1.55% and Dr. Reddy’s Lab up by 1.48%.

On the flip side, Mahindra & Mahindra down by 1.24%, Tata Motors down by 1.11%, Axis Bank down by 1.05%, Hero MotoCorp down by 1.03% and Tata Motors - DVR down by 0.78% were the top losers.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi has given its ex-post facto approval for implementation of the Special Banking Arrangement (SBA) of Rs 10,000 crore for payment of outstanding claims on account of fertilizer subsidy in the year 2016-17. CCEA also approved that, in future, the Department of Fertilisers would avail the SBA with the concurrence of the Department of Expenditure.

Under the SBA, a total loan of Rs 9,969 crore was raised by government for settlement of outstanding subsidy bills with State Bank of India (SBI). The loan amount along with interest liability on the part of government amounting to Rs 80.90 crore were paid to SBI. The government is making available fertilizers, namely 21 grades of P&K fertilizers and Urea to farmers at subsidized prices through fertilizer manufacturers and importers.

For making funds available to fertilizer companies against their subsidy claims, the Ministry of Finance had approved the SBA of Rs 10,000 crore with government interest liability limited to G-Sec rate. Accordingly, SBA was worked out with SBI for an amount of Rs 10,000 crore to meet the outstanding subsidy claims of fertilizer companies. The loan amount together with government interest thereon has been repaid from the Budget Estimate (BE) of 2017-18.

The CNX Nifty is currently trading at 10443.35, up by 2.85 points or 0.03% after trading in a range of 10431.40 and 10453.00. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 4.10%, Sun Pharma up by 3.67%, Lupin up by 3.10%, Dr. Reddy’s Lab up by 2.03% and GAIL India up by 2.01%.

On the flip side, Tech Mahindra down by 3.66%, Zee Entertainment down by 1.61%, Tata Motors down by 1.38%, Hindalco down by 1.36% and Mahindra & Mahindra down by 1.29% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 22.8 points or 0.08% to 28,571.26, Shanghai Composite decreased 19.26 points or 0.57% to 3,376.65, KOSPI Index decreased 11.01 points or 0.43% to 2,545.46, FTSE Bursa Malaysia KLCI decreased 3.72 points or 0.21% to 1,740.21 and Taiwan Weighted decreased 2.95 points or 0.03% to 10,803.41.

On the other hand, Nikkei 225 increased 19.4 points or 0.09% to 22,439.48 and Jakarta Composite increased 26 points or 0.43% to 6,064.15.