Firm trade prevails in morning session

Indian equity benchmarks continued their firm trade in morning session on account of buying in frontline blue chip counters on account of short covering and following positive lead from global peers. The rupee opened down against the US dollar ahead of the US Federal Reserve policy decision which is due later today. Foreign investors, however, put in Rs 344.16 crore on net basis in the domestic stock market on Tuesday. Investors took note of a foreign brokerage report that India remains vulnerable in its external position, but this does not pose any concern about the country’s macro stability and is quite manageable. The report added that India’s CAD doubled from 0.7% of GDP in 2016-17 to 1.4% in 2017-18 and the widening of CAD is likely to continue in the next financial year as well albeit at a slower pace. Separately, former governor of Reserve Bank of India Raghuram Rajan said that India should be thinking of the next 10 to 20 years when it would need a massive push to create jobs. Rajan enlightened that India could achieve even 10% growth if it built infrastructure, cleared the way for companies, eased the way for them to do business, and improved the quality of human capital including healthcare and education.

Traders took note that the government has extended the facility of hiring workers on fixed-term employment to all sectors to improve the ease of doing business. It has also agreed to the trade unions demand that no permanent employee be moved to fixed term employment. Sugar stocks were buzzing as the government scrapped the 20% export duty on sugar in a bid to boost overseas sales of the commodity and lift its domestic price. The country is facing surplus production of the sweetener. In order to reduce the closing stock of 2017-18, the industry aims to export 1.5-2 million tonnes of sugar till October 2018, when the new sugar year begins.

Traders were seen buying in Realty, Telecom and Bankex sector stocks. In scrip specific development, LT Foods and KRBL were trading on firm note on ICRA’s report that the strong demand revival, especially from Iran, may help Basmati rice exports to close the year with a 20% growth at Rs 26,000 crore. Ashok Leyland was trading in green on bagging an order from the Institute of Road Transport (IRT), Tamil Nadu for supply of 2000 Passenger Chassis and 100 of Fully built Small Buses to various STUs in the state of Tamil Nadu.

On the global front, Asian markets were trading in green. China’s fiscal revenue surged 15.8% in the first two months of this year from a year earlier. Government spending for the Jan-Feb period rose by 16.7% on-year. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,300 and 10,200 levels respectively. The market breadth on BSE was positive in the ratio of 1686:535, while 112 scrips remained unchanged.

The BSE Sensex is currently trading at 33313.66, up by 316.90 points or 0.96% after trading in a range of 33090.82 and 33340.54. There were 28 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.01%, while Small cap index was up by 1.19%.

The top gaining sectoral indices on the BSE were Realty up by 2.06%, Telecom up by 1.81%, Bankex up by 1.12%, PSU up by 1.09% and Consumer Durables up by 1.05%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Bharti Airtel up by 3.10%, Yes Bank up by 2.05%, Axis Bank up by 2.00%, SBI up by 1.66% and NTPC up by 1.63%.

On the flip side, Hero MotoCorp down by 0.93%, Adani Ports & Special Economic Zone down by 0.26% and Power Grid down by 0.13% were the top losers.

Meanwhile, credit ratings agency, Crisil Ratings in its latest report has said that the new policy for scrapping commercial vehicles (CV) that are more than 20 years old, is likely to have limited impact and may not increase demand for new vehicles considerably. The much-awaited vehicle scrap policy was given 'in-principle' approval at a high-level meeting at the Prime Minister’s Office (PMO) and is awaiting approval from the Goods and Services Tax (GST) Council.

The report mentioned that the total population of commercial vehicles that will be older than 20 years in fiscal 2021 would be 50,000 vehicles, much lower than the government's earlier estimate of 28 million vehicles and their internal estimate of 6,40,000 vehicles. It also said that since 70,000 to 90,000 vehicles are scrapped every year on regular basis, the new policy would not have much of an impact on the industry. Besides, the rating agency noted that the two major changes made to the Ministry of Road Transport and Highways’ (MORTH) earlier draft note include a change in the age of the vehicle from 15 years to 20 years and implementation of the policy from April 1, 2020, coinciding with the implementation of BS-VI norms.

Crisil further said “if we look at the various vehicle segments in the commercial vehicles industry, very few vehicles would actually be older than 20 years in the current vehicular population.” It also said that Medium and heavy commercial vehicles (MHCVs) that typically have a life of 20 years, would be eligible under the scrappage scheme. It pointed out that out of the MHCVs, medium commercial vehicles (16 tonne gross vehicle weight) would benefit the most, while the number of multi-axle vehicles, intermediate commercial vehicles (ICVs), tractor trailers and light commercial vehicles opting for the scheme would be very limited. However, it said that the benefit offered under the scrappage policy is expected to be 15 percent of the vehicle's price, the effect will be muted as prices of diesel vehicles are expected to go up by 10-15 per cent once the new norms come into force.

The CNX Nifty is currently trading at 10215.70, up by 91.35 points or 0.90% after trading in a range of 10173.20 and 10225.45. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 3.26%, Bharti Airtel up by 3.12%, Ultratech Cement up by 2.53%, Cipla up by 2.44% and Axis Bank up by 1.97%.

On the flip side, Eicher Motors down by 1.00%, Tech Mahindra down by 0.87%, Hero MotoCorp down by 0.83%, Adani Ports & Special Economic Zone down by 0.57% and Bharti Infratel down by 0.56% were the top losers.

The Asian markets were trading in green; KOSPI Index increased 1.79 points or 0.07% to 2,487.31, FTSE Bursa Malaysia KLCI increased 5.34 points or 0.29% to 1,861.73, Shanghai Composite increased 19.93 points or 0.61% to 3,310.57, Taiwan Weighted increased 28.07 points or 0.25% to 11,038.91, Jakarta Composite increased 50.43 points or 0.81% to 6,294.01 and Hang Seng increased 372.85 points or 1.18% to 31,922.78.

Tokyo Stock Exchange was closed on account of National holiday.