Benchmarks extend gains for second straight session

Extending northward journey for second straight day, Indian equity benchmarks ended the Tuesday’s trade in green terrain with frontline gauges recapturing their crucial 33,100 (Sensex) and 10,150 (Nifty) levels amid easing concerns about a potential trade war. Domestic markets started the session with a gain of over a percent, as sentiments remained up-beat with the government’s decision to bring down market borrowings during the first-half of FY19 following careful assessment of its financial needs. The Centre will raise a gross Rs 2.88 lakh crore from market borrowings in the first half of the fiscal. It has also chosen to introduce shorter duration government securities and will also an additional Rs 25,000 crore from the National Small Savings Fund against the Budgeted Rs 75,000 crore to cut down its requirement for fund raising. Afterwards markets pared some of their gains, with traders turning anxious ahead of the fiscal deficit data to be released on March 28. Also, the expiry of the current month futures and options contracts are due on Wednesday and positions will be rolled over to next month.

However, the markets gained some strength in second half of the trade and ended the session with a gain of around half a percent, as some support with Economic Affairs Secretary Subhash Chandra Garg’s statement that the country is well poised to click a growth rate of 7-8 per cent and with focus on start-ups, MSMEs and infrastructure investment it can step on to higher growth pedestal. traders drew some support from NITI Aayog’s statement that the Indian economy is growing at 7 -8 per cent which needs to be reflected on the human development index (HDI) wherein the country stands at 131st position out of 188 nations. Meanwhile, Chief Economic Adviser Arvind Subramanian has said the task force on direct tax reforms will submit its report in the next 4-5 months. Traders also took note of the report that over 1,200 fresh foreign portfolio investors (FPIs) were registered with markets regulator Securities and Exchange Board of India (SEBI) during April-January period of fiscal year 2017-18, driven by their continued interest in Indian equity, bonds and real estate.

Firm opening in European counters too aided sentiments on report that that the US and China are open to discuss trade-related issues. The news comes after a ratcheting up of tensions between the superpowers and fears of a potential trade war. Asian markets rallied as risk appetite improved as trade-war worries eased.

Back home, shares of public sector banks edged higher after the government announced lower-than-expected borrowing programme for the first half of the financial year 2018-19 (FY19). Telecom stocks remained mixed after Telecom Regulatory Authority of India’s (TRAI) latest report stated that adjusted gross revenue (AGR) of the sector fell 7.5%, reflecting continuing financial stress in the debt-laden sector. Meanwhile, Bandhan Bank made a strong debut at the bourses. The stocks ended at 477.20, a 27.25% premium against its issue price of Rs 375 per share on the Bombay Stock Exchange (BSE).

Finally, the BSE Sensex surged 107.98 points or 0.33% to 33,174.39, while the CNX Nifty was up by 53.50 points or 0.53% to 10,184.15.

The BSE Sensex touched a high and a low of 33,371.04 and 33,077.13, respectively and there were 20 stocks on gaining side as against 11 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index surged 1.06%, while Small cap index was up by 1.36%.

The top gaining sectoral indices on the BSE were Metal up by 1.68%, PSU up by 1.66%, Basic Materials up by 1.38%, Oil & Gas up by 1.06% and Bankex was up by 0.93%, while Telecom down by 1.38% was the lone losing index on BSE.

The top gainers on the Sensex were SBI up by 3.04%, Indusind Bank up by 1.45%, Tata Steel up by 1.30%, Kotak Mahindra Bank up by 1.25% and Asian Paints up by 1.16%. On the flip side, Bharti Airtel down by 2.42%, Bajaj Auto down by 1.27%, HDFC down by 0.58%, Hero MotoCorp down by 0.57% and Wipro down by 0.49% were the top losers.

Meanwhile, over 1,200 fresh foreign portfolio investors (FPIs) were registered with markets regulator Securities and Exchange Board of India (SEBI) during April-January period of fiscal year 2017-18, driven by their continued interest in Indian equity, bonds and real estate. According to the SEBI data, the number of FPIs with the markets regulator climbed to 9,083 at the end of January 2018 from 7,807 at March 2017, resulting in an addition of 1,276. This comes on top of about 3,500 new FPIs registering with SEBI in the previous fiscal.  

The SEBI’s board in December had decided to relax entry norms for FPIs willing to invest in the Indian markets as part of its effort to easing direct registration for such investors and avoid participatory notes (P-notes) route. Also, it had decided to ease some rules, including expanding the eligible jurisdictions for registration by including countries with diplomatic tie-ups with India.

Besides, the markets regulator had approved a proposal to rationalise 'fit and proper' criteria for FPIs as well as simplify broad-based requirements for such investors. In a major revamp, SEBI in 2014 had released norms that had clubbed different categories of foreign investors into a new class called FPIs. Under the regime, FPIs have been divided into three categories as per their risk profile and the KYC (know your client) requirements, while other registration procedures have been made simpler for them.

The CNX Nifty traded in a range of 10,207.90 and 10,139.65. There were 38 stocks in green as against 11 stocks in red, while one stock remained unchanged on the index.

The top gainers on Nifty were Indian Oil Corporation up by 4.43%, Indiabulls Housing Finance up by 3.94%, HPCL up by 3.57%, Hindalco up by 3.49% and SBI up by 2.80%. On the flip side, Bharti Infratel down by 2.02%, Bharti Airtel down by 2.00%, Bajaj Auto down by 1.54%, Tata Motors down by 0.47% and HDFC down by 0.38% were the top losers.

The European markets were trading in green; France’s CAC surged 78.85 points or 1.56% to 5,145.13, UK’s FTSE 100 soared 137.26 points or 1.99% to 7,025.95 and Germany’s DAX was up by 234.87 points or 1.99% to 12,022.13.

Asian stocks closed in green on Tuesday amid improved risk appetite as trade-war worries eased following reports that the US and China are willing to negotiate trade-related issues and avert a potential trade war. Stressing that negotiations with China are ongoing, US Treasury Secretary Steven Mnuchin said in an interview on Fox News on Sunday that he is ‘cautiously hopeful’ a trade agreement can be reached. Chinese Premier Li Keqiang also indicated that the US and China should maintain negotiations to avoid a trade war. Japanese shares led regional gains as the yen lost ground for a second straight session on the back of improved risk appetite. Further, Chinese shares snapped a four-session losing streak as tech stocks surged after recent losses on Facebook's data security issues.