Sensex, Nifty continue to trade in fine fettle

Following firm European markets, Indian equity benchmarks continued their trade in fine fettle in late afternoon session, with Sensex and Nifty gaining more than 100 and 50 points, respectively. In line with the firm larger peers, the broader markets too performed jubilantly in late noon deals, with Basic Materials index leading the sectoral indices on the BSE. Gains in major industry leaders such as Larsen & Toubro, Vedanta and Tata Steel also aided the domestic sentiments. The market participants were taking an encouragement with Union Finance Minister Piyush Goyal’s statement that rising tax collections will further help reduce the tariffs, couple of days after goods and services tax (GST) rates were cut on 100 items. Some comfort also came after the US Congress asked the Trump Administration to come up with a strategy that can reflect a measurable progress in its defence ties with India. Traders paid no heed towards SEBI’s data report that 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.

On the sectoral front, pharma stocks were trading higher despite a private report stating that Indian pharmaceutical firms are seeing a slight dip in the rate of final product approvals from the US drug regulator in the first half of 2018 calendar year. Around 101 final approvals were received till date this year, down from 126 during the same period last year. Besides, realty stocks too rallied during the trade, aided by Crisil’s latest report that the road construction firms are set to post a 20% compound annual growth in revenue till 2020, backed by government’s push for the roads development in the country.

On the global front, European markets were trading in green, as investors brushed aside trade worries and shifted focus to the ongoing earnings season. The street got boost, as Germany's private sector activity expanded at the fastest pace in five months in July driven by a stronger increase in manufacturing output. As per flash data from IHS Markit, the composite output index climbed to 55.2 from 54.8 in June, marking the fastest pace of expansion since February. Traders shrugged off data from IHS Markit showing that France's private sector expanded at a slower pace in July. Asian markets were trading in green, after the State Council, China's cabinet, said the country would adopt a more 'vigorous' fiscal policy to support the economy. In another development, Beijing said it has no intention to devalue the yuan to help exports. Back home, in scrip specific development, Delta Corp zoomed on reporting 85.70% rise in Q1 consolidated net profit at Rs 41.41 crore for the quarter ended June 30, 2018, as compared to Rs 22.30 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 36847.10, up by 128.50 points or 0.35% after trading in a range of 36709.72 and 36902.06. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.62%, while Small cap index was up by 2.10%.

The top gaining sectoral indices on the BSE were Basic Materials up by 3.81%, Metal up by 2.88%, Realty up by 2.57%, Capital Goods up by 2.27% and Industrials up by 2.03%, while Bankex down by 0.15% was the lone losing index on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.83%, Vedanta up by 2.67%, Tata Steel up by 1.87%, Maruti Suzuki up by 1.73% and Asian Paints up by 1.51%. On the flip side, Kotak Mahindra Bank down by 2.02%, Hindustan Unilever down by 0.98%, Wipro down by 0.83%, Yes Bank down by 0.68% and Reliance Industries down by 0.66% were the top losers.

Meanwhile, keeping an optimistic view, credit rating agency, Crisil in its latest report has said that the road construction firms are set to post a 20% compound annual growth in revenue till 2020, backed by government’s push for the roads development in the country. The study report is based on 66 companies which account for more than 80% of the debt in over 300 companies.

Crisil further noted that fiscal 2018 was particularly frenetic, with 17,000 km road projects, the highest ever in a year, being awarded by both the Ministry of Road Transport and Highways and NHAI. Besides, it said that FY18 witnessed highest road construction pace of 27 km per day, almost twice than that in the FY14 and over 90% of these contracts were based on hybrid annuity (HAM) and EPC models.

The rating agency further found that HAM projects being awarded over the next two years will need about Rs 70,000 crore of funding through an optimal mix of debt and equity and for this, players will have to raise an additional Rs 12,000 to 15,000 crore of equity to invest in new HAM projects, given the limited playing field and fast pace of project awards anticipated. Crisil further added that this should not pose problems as the market sentiment is positive.

 The CNX Nifty is currently trading at 11137.05, up by 52.30 points or 0.47% after trading in a range of 11092.50 and 11143.40. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 8.31%, Hindalco up by 6.17%, Indiabulls Housing Finance up by 5.81%, Ultratech Cement up by 3.41% and HPCL up by 2.85%. On the flip side, Kotak Mahindra Bank down by 1.91%, Bajaj Finserv down by 1.53%, Bajaj Finance down by 1.49%, Wipro down by 1.25% and Hindustan Unilever down by 1.18% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted increased 48.50 points or 0.44% to 10,995.39, Hang Seng zoomed 406.45 points or 1.42% to 28,662.57, Shanghai Composite gained 46.40 points or 1.6% to 2,905.94, Jakarta Composite rose 17.31 points or 0.29% to 5,933.11, KOSPI was up by 10.89 points or 0.48% to 2,280.20 and Nikkei 225 soared 113.49 points or 0.5% to 22,510.48. On the flip side, Straits Times decreased 2.74 points or 0.08% to 3,290.97.

All European markets were trading in green; UK’s FTSE 100 increased 47.25 points or 0.61% to 7,703.04, France’s CAC surged 43.67 points or 0.81% to 5,421.92 and Germany’s DAX jumped 144.64 points or 1.14% to 12,693.21.