Indian markets continue sanguine trade; Sensex jumps 289 points

Indian markets added gains to continue their sanguine trade in the early noon session, with Sensex surging 289 points and Nifty posting gain of over three fourth of a percent, taking cues from global counterparts.  Metal, Healthcare and Basic Materials were on a buying spree and investors were busy in hectic buying of Vedanta, Tata Steel and Yes Bank stocks. Sentiments on the street were bolstered with Niti Aayog vice chairman Rajiv Kumar stating the falling rupee is not a cause of worry as it is coming back to its natural value. He also said that since the beginning of this year, rupee has declined by only 9.8 % and so, it has recovered. Besides, broader indices were also trading in green, supporting their larger peers. The market breadth on the BSE was in favour of advances; there were 1607 shares on the gaining side against 751 shares on the losing side, while 130 shares remained unchanged. 

On the global front, all the Asian counters were trading in green despite China. News that Chinese delegation to meet U.S. representatives helped boost confidence. Though, Chinese benchmark was trading lower despite Labor Department stating that first-time claims for unemployment benefits fell in the week ended August 11. Back home, as per provisional data from the stock exchanges, domestic institutional investors bought shares worth Rs 133.78 crore, while foreign institutional investors sold shares worth Rs 825.08 crore on August 16. In scrip specific development, Cosmo Films zoomed on launching CPP metalized film with high metal bond.

The BSE Sensex is currently trading at 37952.86, up by 289.30 points or 0.77% after trading in a range of 37840.16 and 37977.04. 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 0.85%, while Small cap index up by 0.90%.

The top gaining sectoral indices on the BSE were Metal up by 1.83%, Healthcare up by 1.51%, Basic Materials up by 1.49%, FMCG up by 1.06% and Consumer Durables up by 1.04%, while Utilities down by 0.01% was the sole losing index on BSE.

The top gainers on the Sensex were Vedanta up by 2.66%, Tata Steel up by 2.42%, Yes Bank up by 2.35%, ITC up by 1.99% and Kotak Mahindra Bank up by 1.88%. On the flip side, Bharti Airtel down by 0.99%, ONGC down by 0.64%, Power Grid down by 0.45%, Wipro down by 0.30% and Bajaj Auto down by 0.08% were the top losers.

Meanwhile, continuing declining trend, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) has declined to over nine-year low of Rs 80,341 crore at the end of July, amid stringent norms put in place by the watchdog Securities and Exchange Board of India (SEBI) to check misuse of these instruments. 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-note investments in Indian markets including equity, debt and derivatives, at July end dropped to Rs 80,341 crore from Rs 83,688 crore at the end of June. Prior to that, in May the figure was Rs 93,497 crore.

Of the total, P-note holdings in equities at July-end were at Rs 60,550 crore, while in debts and derivatives were at Rs 16,219 crore and Rs 3,572 crore respectively. The quantum of FPI investments via P-notes slumped to 2.4 percent during the period under review from 2.6 percent in the preceding month. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly. They, however, need to go through due diligence process.

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 11473.10, up by 88.05 points or 0.77% after trading in a range of 11431.80 and 11477.60. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 3.56%, Lupin up by 2.89%, Vedanta up by 2.63%, Tata Steel up by 2.50% and Yes Bank up by 2.43%. On the flip side, GAIL India down by 1.69%, Bharti Airtel down by 1.03%, ONGC down by 0.88%, Power Grid down by 0.69% and Wipro down by 0.30% were the top losers.

Asian markets were trading mostly in green; Straits Times increased 13.11 points or 0.41% to 3,225.04, Hang Seng increased 148.76 points or 0.55% to 27,248.82, Nikkei 225 increased 78.34 points or 0.35% to 22,270.38, KOSPI increased 6.04 points or 0.27% to 2,246.84 and Taiwan Weighted increased 7.06 points or 0.07% to 10,690.96. Bucking the trend, Shanghai Composite decreased 7.27 points or 0.27% to 2,697.92.