Benchmarks continue firm trade in morning session

Indian equity benchmarks continued their firm trade in morning session on account of buying in frontline blue-chip counters. The rupee opened down against dollar on the final trading day of 2017. Year-end demand for the American currency from banks and importers mainly impacted the rupee. Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 562.55 crore on Thursday, as per provisional data released by the stock exchanges. The sentiments were upbeat after Securities and Exchange Board of India (SEBI) decided to relax entry norms for Foreign Portfolio Investors (FPIs) willing to invest in the Indian markets. Besides, the markets regulator would allow listing of security receipts issued by an asset reconstruction company (ARC) on stock exchange platform. This will enhance capital flows into the securitization industry and particularly be helpful to deal with bank non- performing assets (NPAs). Separately, Union Minister Nitin Gadkari said that the government is working on a policy to bring down the annual oil import bill by $100 billion by 2030 through extensive use of methanol in cooking gas and transportation fuel. The minster added that the government is shortly going to implement a scheme under which 15 per cent methanol will be blended with petrol and which will reduce the cost of the fuel by 10 per cent.

Meanwhile, select public sector banks were trading in green on report that the government is likely to immediately infuse about Rs 10,000 crore in six state-run lenders, including United Bank of India, Dena Bank and Bank of Maharashtra, over the next few weeks. These six lenders are under stress and immediate infusion is to help them maintain the required regulatory capital. This amount will come from the Indradhanush Plan, where around Rs 18,000 crore is still left. Investors took note of a study by industry chamber ASSOCHAM report which highlighted that a slowdown in the economy coupled with high stress level in the banking sector is expected to restrict credit growth at around 8 per cent during the current fiscal despite government’s thrust on loan expansion. Separately, rating agency ICRA warned that rising commodity prices, especially that of crude oil that has hit a three-year peak last week, will double Current Account Deficit (CAD) to $39 billion or 1.5 per cent of GDP this fiscal year.

Traders were seen piling up position in Telecom, Realty and Power stocks, while selling was witnessed in Metal and Oil & Gas sector stocks. In scrip specific development, Astron Paper and Board Mills started off trade with a hefty premium on the National Stock Exchange, against issue price of Rs 50 per share. The Initial Public Offer (IPO) was oversubscribed 243.20 times so far on the last day of bidding. The IPO to raise Rs 70 crore received bids for 3,40,48,47,040 shares against the total issue size of 1,40,00,000 shares. The qualified institutional buyers (QIBs) portion got oversubscribed 103.36 times, non institutional investors 396.99 times and retail investors 76.26 times.

On the global front, Asian markets were trading in green. Growth in China’s sprawling manufacturing sector likely slowed only slightly in December despite tough pollution measures that have forced some factories to curb production and a cooling housing market. The official manufacturing Purchasing Managers’ Index (PMI) on Sunday is expected to dip marginally to 51.6 for December from an unexpectedly solid 51.8 in November. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,000 and 10,500 levels respectively. The market breadth on BSE was positive in the ratio of 1602:703, while 166 scrips remained unchanged.

The BSE Sensex is currently trading at 34002.74, up by 154.71 points or 0.46% after trading in a range of 33889.39 and 34025.66. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.83%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Telecom up by 1.75%, Realty up by 0.99%, Power up by 0.94%, Capital Goods up by 0.89% and Industrials up by 0.85%, while Metal down by 0.09% and Oil & Gas down by 0.04% were the only losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.96%, Tata Motors - DVR up by 1.56%, Axis Bank up by 1.38%, Hero MotoCorp up by 1.14% and Sun Pharma up by 1.06%.

On the flip side, Wipro down by 0.72%, Mahindra & Mahindra down by 0.44%, Dr. Reddy’s Lab down by 0.12% and HDFC Bank down by 0.04% were the top losers.

Meanwhile, the government has rolled back its decision to raise LPG prices by Rs 4 per cylinder every month as the move was seen contrary to its Ujjwala scheme of providing free cooking gas connections to the poor. Oil and Gas Minister Dharmendra Pradhan said that as of 28 December, there is no plan to increase or decrease the basic subsidy and would be provided to needy consumers.

It was felt that raising prices was giving a contrary signal to users. On the one hand, the government was pushing for giving free cooking gas connections to the poor, but on the other, it was raising prices every month. Every household is entitled to 12 cylinders of 14.2-kg each at subsidised rates in a year. Any requirement beyond that is to be purchased at market price.

The government had previously ordered public sector oil marketing companies (OMCs) to raise domestic cooking gas (LPG) prices by Rs 4 per cylinder every month beginning June 2016 with a view to eliminating subsidies and oil firms were authorised to increase price of subsidised domestic LPG cylinder by Rs 2 per 14.2-kg cylinder per month (excluding VAT) with effect from July 1, 2016. Oil companies had hiked LPG rates on 10 occasions since that go-ahead, however the order was withdrawn in October and since then there has been no monthly hike. Though, there has been increase in price of subsidised LPG even after October mainly because of taxation issues.

The CNX Nifty is currently trading at 10513.25, up by 35.35 points or 0.34% after trading in a range of 10488.65 and 10524.20. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.15%, Bharti Infratel up by 2.05%, Axis Bank up by 1.29%, TCS up by 1.18% and Lupin up by 1.07%.

On the flip side, GAIL India down by 1.36%, Wipro down by 0.86%, HPCL down by 0.79%, Hindalco down by 0.78% and Vedanta down by 0.65% were the top losers.

The Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 1.28 points or 0.07% to 1,780.38, Shanghai Composite increased 3.42 points or 0.1% to 3,299.80, Nikkei 225 increased 4.83 points or 0.02% to 22,788.81, Jakarta Composite increased 49.02 points or 0.78% to 6,363.07, Taiwan Weighted increased 57.85 points or 0.55% to 10,625.49 and Hang Seng increased 96.38 points or 0.32% to 29,960.09.

Seoul Stock Exchange was closed on account of National holiday.