Markets trade with traction; Sensex at record high

Indian equity benchmarks have made an optimistic start and are trading in fine fettle in early deals on Tuesday with the S&P BSE Sensex is trading at its record high, while Nifty inching towards its all-time high level, amid positive cues from Asian counterparts. Sentiments remained upbeat with report that the overall exports from India to BRICS saw an upswing of 7.5% in Q1 2018 Y-o-Y in terms of total volumes, while the country’s imports from BRICS nations is reduced by 3.5%. Traders also took some encouragement with report that the commerce ministry is working on an export promotion strategy to boost shipments of chemicals, plastics and allied products sector to push the growth of the country's overall exports. For the formulation of the strategy, the ministry has constituted a sub-group to deliberate upon the issues of the sector.

Firm global cues too remained supportive with Asian markets were trading mostly in green at this point of time, as investors kept an eye on bond yields and the falling Chinese yuan. The US markets ended mostly higher on Monday, as investors waiting for earnings from marquee corporations to assess the impact of an escalating US-China trade row.

Back home, traders are getting some encouragement with Union Finance Minister Piyush Goyal’s statement that rising tax collections will further help reduce the tariffs. However, traders shrugges off Securities and Exchange Board of India’s (SEBI) data showing that investments through participatory notes into Indian capital markets plunged to over nine-year low of Rs 83,688 crore at June-end amid stringent norms put in place by the SEBI to check the misuse of these instruments. Meanwhile, shares of cement companies rallied on the BSE in morning trade after ACC reported a better-than-expected consolidated net profit of Rs 3.29 billion for the June 2018 quarter. The company had profit of Rs 3.26 billion in year ago quarter.  

The BSE Sensex is currently trading at 36859.57, up by 140.97 points or 0.38% after trading in a range of 36790.42 and 36878.55. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.92%, while Small cap index was up by 1.17%.

The top gaining sectoral indices on the BSE were Basic Materials up by 2.76%, Metal up by 1.40%, Telecom up by 1.32%, Capital Goods up by 1.11% and Realty was up by 1.11%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Maruti Suzuki up by 2.07%, Tata Motors up by 1.74%, Tata Steel up by 1.45%, Adani Ports up by 1.24% and Tata Motors - DVR was up by 1.09%. On the flip side, Hero MotoCorp down by 1.78%, Bajaj Auto down by 1.60%, Wipro down by 1.29%, Axis Bank down by 0.27% and Yes Bank was down by 0.18% were the top losing indices on BSE.

Meanwhile, amid stringent norms put in place by the watchdog the Securities and Exchange Board of India (SEBI) to check misuse of these instruments, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) dropped to more than nine-year low of Rs 83,688 crore at June-end. This is the lowest level since April 2009 when the cumulative value of such investments stood at Rs 72,314 crore. According to SEBI data, total value of P-Notes investments in Indian markets including equity, debt and derivatives, at April end fall to Rs 83,688 crore from Rs 93,497 crore in the end of May and Rs 1,00,245 crore in April.

Of the total investments made in June, P-note holdings in equities were at Rs 61,786 crore, while in debts and derivatives were at Rs 18,493 crore and Rs 3,409 crore respectively. Besides, the quantum of FPI investments via P-notes slipped to 2.6% during the period under review from 2.9% in the preceding month. P-note investments were on a decline since June last year and hit an over eight-year low in September. However, these investments rose slightly in October but fell again in November and the trend continued till June this year.

The decline could be attributed to several measures taken by the market watchdog to stop the misuse of the controversy-ridden participatory notes. In July 2017, SEBI had notified stricter norms stipulating a fee of $1,000 on each instrument to check any misuse for channelising black money. It had also prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes. These measures were an outcome of a slew of other steps taken by the regulator in the recent past. In April last year, the SEBI had barred resident Indians, NRIs and entities owned by them from making investment through P-notes.

The CNX Nifty is currently trading at 11128.70, up by 43.95 points or 0.40% after trading in a range of 11103.50 and 11136.05. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 5.25%, Hindalco up by 3.44%, Ultratech Cement up by 3.18%, UPL up by 2.40% and Maruti Suzuki was up by 2.09%. On the flip side, Hero MotoCorp down by 1.88%, Wipro down by 1.56%, Bajaj Auto down by 1.44%, Bajaj Finserv down by 1.43% and Bajaj Finance was down by 1.36% were the top losers.

Asian markets are trading in green; Taiwan Weighted surged 15.24 points or 0.14% to 10,962.13, Jakarta Composite rose 15.78 points or 0.27% to 5,931.58, Hang Seng soared 419.90 points or 1.46% to 28,676.02, Shanghai Composite advanced 45.39 points or 1.56% to 2,904.93, Straits Times strengthened 10.02 points or 0.3% to 3,303.73, KOSPI gained 10.76 points or 0.47% to 2,280.07 and Nikkei 225 was up 117.44 points or 0.52% to 22,514.43.