Benchmarks trade in green on firm global cues

Buoyed by firm global cues, Indian equity benchmarks made a positive start and are trading marginally in green in early deals on Thursday. Sentiments remained up-beat with NITI Aayog’s expectation that the first strategic disinvestment of Central Public Sector Enterprises will be conducted within the current financial year. It said that the process of divestment is being carried out by DIPAM (Department of Investment and Public Asset Management) and the first transactions are expected in the current financial year after a long gap of 14 years. Some support also came with the Union Cabinet approving the revised model concession agreement for public private partnership projects in major ports. The amendments were made in the MCA to attract more investments in the port sector and are expected to clear the hurdles created by some of the provisions in the current model concession agreement.

On the global front, Asian markets are trading mostly in green at this point of time with Japanese market surging to a 10-year high, as solid economic data from the United States and Germany reinforced investors' optimism while oil prices hovered at around two and half year high. The US markets surged to fresh closing highs in the last session, as upbeat data added to recent optimism about the economic outlook.

Back home, the infra stocks remained on buyers’ radar after the government approved Rs 12,178 crore worth of infrastructure projects and an AIIMS in Bilaspur in Himachal Pradesh to be constructed at a cost of Rs 1,351crore. However, IT stocks exhibiting mixed trend on report that the US is considering new regulations to prevent the extension of H-1B visas as part of president Donald Trump's 'Buy American, Hire American' initiative, a move which could hit tech firms and hundreds of thousands of Indian IT professionals.

The BSE Sensex is currently trading at 33844.11, up by 50.73 points or 0.15% after trading in a range of 33802.13 and 33916.75. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.43%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.87%, Basic Materials up by 0.86%, Metal up by 0.76%, Capital Goods up by 0.71% and PSU was up by 0.67%, while Auto down by 0.12% was the lone losing index on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.55%, ONGC up by 1.39%, Asian Paints up by 1.29%, Coal India up by 0.88% and Indusind Bank up by 0.84%. On the flip side, Tata Motors - DVR down by 1.88%, Tata Motors down by 1.36%, ICICI Bank down by 0.81%, Sun Pharma down by 0.65% and Bajaj Auto down by 0.57% were the top losers.

Meanwhile, with an aim to make the investment climate more investor friendly, the government has given green single to a revised model concession pact for projects based on public private partnership (PPP) design at major ports. It was approved in the Union Cabinet meeting chaired by Prime Minister Narendra Modi. The revised Model Concession Agreement (MCA) includes providing an exit route to developers by way of divesting their equity up to 100 percent after completion of two years from the Commercial Operation Date (COD), similar to the MCA provisions of the highway sector. The amendments in the MCA envisage constitution of the Society for Affordable Redressal of Disputes - Ports (SAROD- PORTS) as dispute resolution mechanism similar to provision available in highways sector.

The government said under provision of additional land to the concessionaire, land rent has been reduced from 200 percent to 120 percent of the applicable scale of rates for the proposed additional land. It also said that concessionaire would pay royalty on per MT of cargo/TEU handled basis which would be indexed to the variations in the WPI annually. This will replace the present procedure of charging royalty which is equal to the percentage of gross revenue, quoted during bidding, calculated on the basis of upfront normative tariff ceiling prescribed by Tariff Authority for Major Ports (TAMP). It added that this will help to resolve the long pending grievances of PPP operators that revenue share is payable on ceiling tariff and price discounts are ignored. The problems associated with fixing storage charges by TAMP and collection of revenue share on storage charges which has plagued many projects will also get eliminated.

According to the statement issued by the Ministry of Shipping, concessionaire would be free to deploy higher capacity equipment/ facilities/ technology and carry out value engineering for higher productivity and improved utilisation and/ or cost saving of project assets. In the new agreement, ‘actual project cost’ would be replaced by ‘total project cost’. The new definition of ‘change in law’ will also include imposition of standards and conditions arising out of TAMP guidelines/orders, environmental law and labour laws and increase and imposition of new taxes, duties, etc for compensating the concessionaire. Since the viability of the project was affected, concessionaire will now be compensated for the increase and imposition of new taxes, duties etc except in respect of imposition/increase of a direct tax, both by central and state government.

The CNX Nifty is currently trading at 10459.45, up by 16.25 points or 0.16% after trading in a range of 10441.45 and 10470.10. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.58%, Dr. Reddys Lab up by 1.42%, UPL up by 1.31%, Asian Paints up by 1.30% and Coal India up by 1.12%. On the flip side, Tata Motors down by 1.57%, HCL Tech down by 1.16%, ICICI Bank down by 0.83%, Sun Pharma down by 0.62% and Yes Bank down by 0.62% were the top losers.

Asian markets are trading mostly in green; FTSE Bursa Malaysia KLCI increased 6.85 points or 0.38% to 1,799.64, Taiwan Weighted rose 9.81 points or 0.09% to 10,811.38, Shanghai Composite gained 13.79 points or 0.41% to 3,382.90, Hang Seng added 138.79 points or 0.45% to 30,699.74 and Nikkei 225 was up by 588.37 points or 2.58% to 23,353.31.

On the flip side, Jakarta Composite decreased 13.6 points or 0.22% to 6,237.88 and KOSPI Index was down by 12.48 points or 0.5% to 2,473.87.