Sensex, Nifty enter into green terrain

Indian equity benchmarks entered into green terrain in late afternoon session, on account of buying in Oil & Gas, Auto and Energy stocks. Besides, gains led by major industry leaders like ICICI Bank, Tata Motors and Bajaj Auto also supported the markets. Sentiments turned upbeat as India’s merchandise exports grew to a six-month high of 20.18% in the month of May 2018, boosted by a rise in receipts of petroleum, engineering and pharmaceutical products. Some relief also came with a report that Reserve Bank of India eased investment norms for foreign portfolio investors (FPIs) in debt, especially into individual large corporates, a move that can help attract more overseas flows and thereby help arrest the recent fall in the rupee on one hand and also lift the recent fall in demand for corporate bonds. Adding some comfort, President Ram Nath Kovind said that India is striving to become a $5 trillion economy and the world's third largest consumer market by 2025. Meanwhile, States have collected taxes to the tune of Rs 10,000 crore online since the rollout of Transport Mission Mode Project (MMP), which has also automated regional transport operations (RTOs), under the Centre's ambitious e-Governance initiative.

However, upside remained limited with rating agency Moody’s sounding a note of caution that any reduction in excise duty on petrol and diesel would adversely affect fiscal deficit unless it is matched by a commensurate cut in expenditure. Anxiety spread among investors with a private FDI Report 2018 stating that the number of greenfield FDI projects in India during the year fell sharply by 21% to 637. The US has surpassed India to become the top destination for greenfield FDI investment in 2017.

On the global front, European markets were trading in red, as renewed concerns over a global trade war dented investors' appetite for risk. Asian markets were also trading in red. Back home, in scrip specific development, ASM Technologies traded higher on receiving an approval for signing of LLP Agreement, with regard to investment, of 70% by the company, in RV Forms & Gears LLP, a Chennai based firm. The Board of Directors of the company at their meeting held on June 16, 2018, approved the same.

The BSE Sensex is currently trading at 35635.92, up by 13.78 points or 0.04% after trading in a range of 35529.25 and 35721.55. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.10%, while Small cap index was down by 0.57%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.29%, Auto up by 0.67%, Energy up by 0.56%, Bankex up by 0.26% and Consumer Disc up by 0.23%, while Metal down by 2.01%, Basic Materials down by 1.19%, Consumer Durables down by 0.52%, IT down by 0.50% and Capital Goods down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.47%, Tata Motors - DVR up by 2.36%, Tata Motors up by 2.24%, Bajaj Auto up by 1.03% and Indusind Bank up by 0.62%. On the flip side, Vedanta down by 2.24%, Tata Steel down by 2.16%, Kotak Mahindra Bank down by 1.69%, Coal India down by 1.16% and Infosys down by 0.80% were the top losers.

Meanwhile, with an aim to attract more overseas flows, the Reserve Bank of India (RBI) has eased investment norms for foreign portfolio investors (FPIs) in debt, especially into individual large corporates. More overseas inflow will help to arrest recent fall in rupee and also lift recent fall in demand for corporate bonds.

The FPIs cap on investment in government security has been revised to 30% of outstanding stock of that security, from 20% earlier. As per the revised minimum residual maturity requirement, FPIs are permitted to invest in Central Government securities (G-secs), including in Treasury Bills, and State Development Loans (SDLs) without any minimum residual maturity requirement, subject to the condition that short-term investments by an FPI under either category shall not exceed 20% of the total investment of that FPI in that category.

Besides, FPIs are permitted to invest in corporate bonds with minimum residual maturity of above one year, subject to the condition that short-term investments in corporate bonds by an FPI shall not exceed 20% of the total investment of that FPI in corporate bonds. These stipulations would not apply to investments in SRs by FPIs. Further, RBI noted that short-term investments shall not exceed 20% of total investment by an FPI in any category applies on an end-of-day basis. At the end of any day, all investments with residual maturity of up to one year will be reckoned for the 20% limit. RBI also said that Short-term investments by an FPI may exceed 20% of total investments, only if the short-term investments consist entirely of investments made on or before April 27, 2018; that is, short-term investments do not include any investment made after April 27, 2018.

The CNX Nifty is currently trading at 10822.40, up by 4.70 points or 0.04% after trading in a range of 10787.35 and 10830.20. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were HPCL up by 4.78%, Indian Oil Corporation up by 4.17%, ICICI Bank up by 3.38%, Tata Motors up by 2.56% and Eicher Motors up by 1.98%. On the flip side, Hindalco down by 2.42%, Tata Steel down by 2.22%, Vedanta down by 2.10%, Kotak Mahindra Bank down by 1.57% and Lupin down by 1.51% were the top losers.

Asian markets were trading in red; Nikkei 225 decreased 171.42 points or 0.75% to 22,680.33, KOSPI Index decreased 27.8 points or 1.16% to 2,376.24 and FTSE Bursa Malaysia KLCI decreased 15.41 points or 0.87% to 1,746.37.

All European markets were trading in red; Germany’s DAX decreased 94.2 points or 0.72% to 12,916.35, France’s CAC decreased 39.91 points or 0.73% to 5,461.97 and UK’s FTSE 100 decreased 10.68 points or 0.14% to 7,623.23.