Benchmarks trade near record high levels in early deals

Indian equity benchmarks have made a positive start and are trading near all time high levels in morning deals, with Sensex surpassing their crucial 34,600 for the first time ever amid firm global cues. Investors’ sentiments remained optimistic ahead of Infosys earnings later today and budget next month. Traders also took some encouragement with statement of NITI Aayog Vice Chairman Rajiv Kumar, who dismissing concerns of fiscal slippage has said the next Union Budget will not be a populist one. He said that there shouldn’t be a fear of fiscal risk because of slippage, because if at all, a fiscal slippage happens, it would only be for the right reasons.

Global cues too remained supportive with Asian markets rallying at this point of time, supported by US earnings optimism and a rise in oil prices while the euro edged higher as the European Central Bank signalled an end to its massive stimulus. The US markets made a smart bounce back in the last session and the major averages climbed to new record closing highs.

Back home, steel stocks are shining in early deals, as the Union Steel Minister Birender Singh has said that exports should account for 6-7 per cent of India’s total steel production in the next few years, up from the 1.5 per cent at present. Meanwhile, Tata Consultancy Services (TCS) edged lower over a percent in early deals post Q3 result announcement. The company has reported 3.64% fall in its consolidated net profit at Rs 6,531 crore for the quarter ended December 31, 2017 as compared to Rs 6,778 crore for the corresponding quarter in the FY17. However, total consolidated income of the company increased by 2.74% at Rs 31,774 crore for quarter under review as compared to Rs 30,927 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 34622.37, up by 118.88 points or 0.34% after trading in a range of 34558.36 and 34638.42. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.37%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were Metal up by 0.69%, Industrials up by 0.67%, Consumer Durables up by 0.58%, Bankex up by 0.56% and Utilities was up by 0.56%, while IT down by 0.20% and TECK was down by 0.06% were the only losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.47%, HDFC up by 0.94%, Maruti Suzuki up by 0.79%, Kotak Mahindra Bank up by 0.69% and Larsen & Toubro up by 0.58%. On the flip side, TCS down by 1.16%, Power Grid Corporation down by 0.35%, Indusind Bank down by 0.22%, Sun Pharma down by 0.18% and Asian Paints down by 0.11% were the top losers.

Meanwhile, virtually ruling out giving statutory powers to upstream oil and gas regulator, the Directorate General of Hydrocarbons (DGH), the Oil minister Dharmendra Pradhan has said that the oil and gas sector has not fully developed and needs government support. Various committees have suggested creation of an independent, statutory regulator for the upstream oil sector. The DGH is a technical arm of the oil ministry which overseas upstream oil and gas exploration and production activities.

Talking further on the demand for DGH to be made a statutory body like market regulator SEBI, Pradhan stated that the sector has not developed fully and still looks at the government for reforms. He said ‘Does a sector which has not developed fully, a sector which expects government to do reforms, should be talk of that.’ He added that it was not right to put ‘jargons’ like statutory regulator for the sector.

There are two regulatory bodies in the oil and gas sector - the Petroleum and Natural Gas Regulatory Board, which is a regulator for the downstream activities like laying of pipelines and fuel marketing but without powers to review pricing. The DGH currently manages petroleum resources besides monitoring production sharing contracts (PSCs), and assists the government in auctioning oil and gas exploration fields. It is manned by staff drawn on deputation or tenure basis, mainly from state-owned firms like Oil and Natural Gas Corporation (ONGC) and Oil India (OIL).

The government’s recent Integrated Energy Policy noted that the present upstream regulation provided by the DGH was ‘neither independent nor comprehensive in a technical sense’ and the ‘current arrangement needs to be strengthened and made independent’. Moreover, a committee, headed by former finance secretary Vijay Kelkar in 2013, had recommended hiving off the DGH's financial oversight function and vesting it with the income tax authorities. Parliamentary standing committees too have recommended an independent upstream regulator.

The CNX Nifty is currently trading at 10686.75, up by 35.55 points or 0.33% after trading in a range of 10675.15 and 10690.25. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 1.71%, Vedanta up by 1.68%, ICICI Bank up by 1.37%, HDFC up by 0.93% and Maruti Suzuki up by 0.82%. On the flip side, TCS down by 1.24%, UPL down by 1.23%, Indusind Bank down by 0.35%, HCL Tech down by 0.28% and Power Grid Corporation down by 0.28% were the top losers.

Asian markets are trading in green; KOSPI Index rose 1.84 points or 0.07% to 2,489.75, Jakarta Composite gained 2.54 points or 0.04% to 6,388.88, Shanghai Composite increased 3.31 points or 0.1% to 3,428.65, FTSE Bursa Malaysia KLCI jumped 3.81 points or 0.21% to 1,820.69, Nikkei 225 advanced 6.94 points or 0.03% to 23,717.37, Taiwan Weighted added 74.2 points or 0.69% to 10,884.26 and Hang Seng was up by 90.93 points or 0.29% to 31,211.32.