Benchmarks trade above neutral line in morning session

Indian equity benchmarks continued their trade above neutral line in morning session on account of buying in front line blue chip counters. The rupee opened down against the US currency on fresh demand for dollar from importers and banks. Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 96.31 crore on Wednesday, as per provisional data released by the stock exchanges. Domestic Institutional Investors (DIIs) sold shares worth a net Rs 269.20 crore. The sentiments remained up-beat on report that the Nikkei India services Purchasing Managers’ Index, or PMI, returned to modest growth in December amid signs of recovery from the effects of new goods and service taxes, or GST. The seasonally adjusted business activity index stood at 50.9 in December, up from 48.5 in November. The report highlighted that this expansion was mainly driven by manufacturing companies, with output growth here the sharpest since December 2012.

Some support also crept in 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. Separately, the Union Cabinet approved 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.

Select public sector banks were buzzing in today’s trade after the finance ministry has approved proposal for infusion of Rs 7,577 crore in 6 weak public sector banks (PSBs) as part of the recapitalization plan to bolster capital adequacy ratio. Lenders, which will receive capital through preferential issue of shares, include Bank of India, IDBI Bank and UCO Bank. Government has also decided to infuse Rs 2,257 crore in the Bank of India, Rs 2,729 crore in IDBI Bank, Rs 650 crore in Bank of Maharashtra, and Rs 243 crore in Dena Bank. However, IT stocks were trading under pressure as the proposed ‘US Bill, Protect and Grow American Jobs’, is riddled with onerous conditions and places unprecedented obligations on both Indian IT companies and clients using H-1B visas. Software body NASSCOM has flagged its concerns around visa-related issues in the US with the Senators, Congressmen and the administration, and will engage further in a dialogue over the next few weeks over the proposed legislation.

Traders were seen piling up position in Metal, Consumer Durables and Basic Materials stocks, while selling was witnessed in IT, Auto and TECK sector stocks. In scrip specific development, JP Associates was trading in green after the Reserve Bank of India ordered banks not to initiate bankruptcy proceedings against the company, possibly in anticipation of legal complications after a Supreme Court ruling barred its promoters from selling or transferring assets. The ruling was aimed at safeguarding the interests of buyers of homes being built by the company. SJVN was trading firm after the company announced a share buyback proposal. The board will consider the proposal on January 8.

On the global front, the Asian markets were trading mostly in green. China’s services sector activity expanded at its fastest pace in over three years in December on solid growth in new business, with the outlook improving to a six-month high. Japanese manufacturing activity expanded at the fastest pace in almost four years in December as new orders accelerated, in a sign that steady economic growth will continue into the New Year. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,800 and 10,450 levels respectively. The market breadth on BSE was positive in the ratio of 1691:796, while 95 scrips remained unchanged.

The BSE Sensex is currently trading at 33821.56, up by 28.18 points or 0.08% after trading in a range of 33802.13 and 33916.75. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Metal up by 1.24%, Consumer Durables up by 0.97%, Basic Materials up by 0.90%, Capital Goods up by 0.74% and PSU up by 0.55%, while IT down by 0.21%, Auto down by 0.20%, TECK down by 0.20%, Bankex down by 0.05% and Healthcare down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 2.09%, Coal India up by 1.73%, Tata Steel up by 1.46%, ONGC up by 1.45% and Asian Paints up by 1.13%.

On the flip side, Tata Motors - DVR down by 1.33%, ICICI Bank down by 0.95%, Sun Pharma down by 0.94%, Tata Motors down by 0.84% and Yes Bank down by 0.81% were the top losers.

Meanwhile, government’s think tank NITI Aayog expects the first strategic disinvestment of Central Public Sector Enterprises (CPSE) to be conducted within the current financial year. It has 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.

NITI in its three-year achievement book said that based on its recommendations, more than 30 CPSEs have been approved by the Cabinet Committee on Economic Affairs (CCEA) for in-principle strategic disinvestment. It also credited itself for guiding in creating the Three Year Action Agenda approach and doing away with the Five Years Plans and Annual Plans.

It added that in line with the government's philosophy that government should not be in the business of business, more CPSEs are being examined for strategic disinvestment. A report was submitted to the Government on 74 sick/loss-making/non-performing CPSEs. The recommendations are under implementation and so far more than 15 CPSEs are undergoing closure.

The report further said that NITI Aayog has led the initiative for making India a leader in the global space on the Artificial Intelligence (AI) research with focus on adopting AI to address problems faced in developing countries. The focus is currently on health, education, and agriculture to develop proof-of-concepts in coordination with the respective ministries which they can then take up as projects. The report also said that work on developing a National Data and Analytics Portal was at an advanced stage. The portal, besides being a single point source of sectoral data for researchers, policymakers and citizens, will also enable training dataset sharing between different organizations for AI applications.

The CNX Nifty is currently trading at 10450.45, up by 7.25 points or 0.07% after trading in a range of 10441.45 and 10470.10. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.37%, Dr. Reddy’s Lab up by 1.95%, ONGC up by 1.42%, Tata Steel up by 1.39% and Larsen & Toubro up by 1.31%.
On the flip side, HCL Tech down by 1.37%, Tata Motors down by 1.07%, Sun Pharma down by 1.05%, Lupin down by 1.01% and ICICI Bank down by 0.92% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 7.23 points or 0.4% to 1,800.02, Shanghai Composite increased 15.13 points or 0.45% to 3,384.24, Taiwan Weighted increased 19.1 points or 0.18% to 10,820.67, Hang Seng increased 115.08 points or 0.38% to 30,676.03 and Nikkei 225 increased 650.27 points or 2.86% to 23,415.21.

On the other hand, Jakarta Composite decreased 12.44 points or 0.2% to 6,239.04 and KOSPI Index decreased 11.6 points or 0.47% to 2,474.75.