Bourses maintain upbeat mood in afternoon deals

Indian equity indices maintained their upbeat mood in early afternoon session, as Economic Survey expects FY19 GDP growth at 7-7.5% vs 6.75% in FY18. Domestic sentiments remained firm with the report that Goods and services tax (GST) receipts rose in December 2017, reversing the decline seen in the previous two months. The total collections for December rose to Rs 86,703 crore. Some optimism also spread among the investors with Union Finance Minister Arun Jaitley’s statement that India can be among top 50 on World Bank’s ease of doing business index, if various machineries, including the tax department, make concerted efforts to improve the three laggard parameters. Moreover, heavy buying activity ahead the Union budget, too buoyed the trading sentiment. In scrip specific development, Omkar Speciality Chemicals was up by over three and half percent on receiving patent for Alkali Metal Iodide products.

On the global front, Asian markets were trading mixed, after several stocks gave up gains from upbeat openings that tracked Friday's rally on Wall Street. Back home, the BSE Sensex is currently trading at 36387.97, up by 337.53 points or 0.94% after trading in a range of 36093.36 and 36410.60. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.21%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were Auto up by 1.81%, IT up by 1.53%, Metal up by 1.44%, TECK up by 1.24% and Consumer Durables up by 0.98%, while Telecom down by 0.98%, Realty down by 0.39%, FMCG down by 0.34%, PSU down by 0.24% and Utilities down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 4.02%, TCS up by 2.38%, Tata Steel up by 1.99%, Mahindra & Mahindra up by 1.97% and HDFC up by 1.97%. On the flip side, Dr. Reddy’s Lab down by 4.15%, Bharti Airtel down by 1.68%, ITC down by 1.51%, ONGC down by 1.06% and NTPC down by 0.47% 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 11158.55, up by 88.90 points or 0.80% after trading in a range of 11075.95 and 11163.75. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 4.01%, Eicher Motors up by 3.88%, Zee Entertainment up by 3.16%, UPL up by 3.13% and Indiabulls Housing Finance up by 2.74%. On the flip side, Dr. Reddy’s Lab down by 4.35%, GAIL India down by 2.22%, Lupin down by 2.12%, Bharti Airtel down by 1.70% and ITC down by 1.65% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 9.88 points or 0.53% to 1,863.80, KOSPI Index was up by 23.43 points or 0.91% to 2,598.19 and Taiwan Weighted added 74.71 points or 0.67% to 11,221.81. On the flip side, Hang Seng decreased 165 points or 0.5% to 32,989.12, Shanghai Composite was down by 28.99 points or 0.81% to 3,529.14, Jakarta Composite shed 10.89 points or 0.16% to 6,649.73 and Nikkei 225 dipped 2.54 points or 0.01% to 23,629.34.