Benchmarks trade jubilantly in early deals; Nifty conquers 11,100 mark

Indian equity benchmarks made a gap-up opening and are trading jubilantly in early deals on Monday, with frontline gauges conquering their crucial 11,100 (Nifty) and 36,300 (Sensex) levels for the first time ever ahead of the Economic Survey to be tabled later in the day, the first day of the crucial Budget session of Parliament. Sentiments remained up-beat on report that investments in domestic capital markets through participatory notes (P-notes) surged to a six-month high of over Rs 1.5 trillion (Rs 1.5 lakh crore) at December-end despite stringent norms put in place by regulator Sebi to check their misuse. Traders also took some encouragement with report that India’s government may look to raise as much as a record Rs 1 trillion ($15.7 billion) from the sale of State assets in the next fiscal year to help meet tough fiscal deficit limits while giving it room to boost spending and woo voters before general elections that must be called by early 2019.

Global cues too remained supportive with the US markets reaching new record closing highs, as traders remained optimistic to the better than expected earnings of Intel (INTC). Asian markets turned mixed after a firm start.

Back home, traders will be eyeing the Budget session of the Parliament that begins today. As many as 28 bills will be tabled in the Lok Sabha, while 39 bills are listed for the Rajya Sabha for the upcoming session. Meanwhile, Newgen Software Technologies made a decent listing on the BSE and are trading with a gain of around 7% in early deals.

The BSE Sensex is currently trading at 36336.05, up by 285.61 points or 0.79% after trading in a range of 36093.36 and 36356.99. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.19%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Metal up by 1.63%, Auto up by 1.44%, IT up by 1.34%, Basic Materials up by 1.12% and TECK up by 0.94%, while Telecom down by 1.41%, Oil & Gas down by 0.45%, PSU down by 0.17%, Consumer Durables down by 0.08% and Healthcare down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.42%, TCS up by 2.39%, Tata Steel up by 2.30%, HDFC up by 1.81% and Mahindra & Mahindra up by 1.53%. On the flip side, Dr. Reddys Lab down by 3.55%, Bharti Airtel down by 2.47%, ONGC down by 1.49%, Adani Ports down by 0.41% and ITC down by 0.32% were the top losers.

Meanwhile, after declining in the month of November, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) has jumped to a six-month high of over Rs 1.5 lakh crore at the end of December, despite stringent norms put in place by markets regulator Securities and Exchange Board of India (SEBI) to check their misuse. This is the highest level since June when the cumulative value of such investments stood at Rs 1.65 lakh crore. According to SEBI data, total value of P-Notes investments in Indian markets including equity, debt and derivatives, at December end surged to Rs 152,243 crore, from Rs 128,639 crore at the end of November.

Of the total, P-note holdings in equities at December-end were at Rs 119,187 crore, while in debts and derivatives were at Rs 30,065 crore and Rs 2,990 crore respectively. The quantum of FPI investments via P-notes increased to 4.6 percent in December from 4.0 percent in the preceding month. P-notes are issued by registered Foreign Portfolio Investors to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly. However, they need to go through a proper due diligence process.

Prior to the recent surge, P-note investments were on a decline since June and hit an over eight-year low in September. However, these investments slightly rose in October but fell in November. As per the data, the total investment value through P-notes stood at Rs 131,006 crore and Rs 122,684 crore in October-end and September-end, respectively. Besides, these declines could be attributed to several measures taken by markets regulator SEBI to stop the misuse of the controversy-ridden participatory notes.

The SEBI, in July, had notified stricter P-notes norms stipulating a fee of $1,000 that would be levied on each instrument to check any misuse for channelising black money. Also, SEBI prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes. The move was a follow-through of SEBI’s board approval of a relevant proposal in June. These measures were an outcome of a slew of other steps taken by the regulator in the recent past. In April, it had barred resident Indians, NRIs and entities owned by them from making the investment through P- notes. The decision was part of efforts to strengthen the regulatory framework for P-notes, which have been long seen as being possibly misused for routing black money from abroad.

The CNX Nifty is currently trading at 11135.80, up by 66.15 points or 0.60% after trading in a range of 11075.95 and 11148.25. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 3.25%, Eicher Motors up by 2.60%, Indiabulls Housing up by 2.59%, TCS up by 2.58% and Vedanta up by 2.18%. On the flip side, Dr. Reddys Lab down by 3.70%, Bharti Airtel down by 2.75%, HPCL down by 2.67%, ONGC down by 1.61% and BPCL down by 1.36% were the top losers.

Asian markets are trading mixed; Shanghai Composite declined 19.15 points or 0.54% to 3,538.98, Hang Seng slipped 11.61 points or 0.04% to 33,142.51, Jakarta Composite shed 6.07 points or 0.09% to 6,654.55 and Nikkei 225 down by 3.07 points or 0.01% to 23,628.81.

On the flip side, FTSE Bursa Malaysia KLCI increased 9.31 points or 0.5% to 1,863.23, Taiwan Weighted gained 18.93 points or 0.17% to 11,166.03 and KOSPI Index up by 29.12 points or 1.13% to 2,603.88.