Benchmarks continue firm trade in afternoon session

Indian equity markets continued to trade firm in afternoon session amid unabated buying by foreign investors and strong global cues. The benchmark indices continue to trade above important psychological 11,250 and 37,400 levels and are holding on to around a percent gain in noon session. The sentiments got push with report that in a major overhaul of oil and gas exploration permits, the government will not charge any share of profit on hydrocarbons produced from less explored areas as it looks to attract the elusive private and foreign investment to raise domestic output. Some comfort also came with the Cotton Textiles Export Promotion Council (TEXPROCIL) Chairman K.V. Srinivasan’s statement that Rebate of state and central taxes will improve the competitiveness of made ups products in the export markets. Sentiment took on more shine with the rupee’s appreciation against the dollar. The rupee was trading at 69.64 against US Dollar, higher by 25 paise. On the sectoral front, Airline sector remained in focus after private report indicating that a series of air-crash incidents have led to insurers incurring a loss of Rs 2,500 crore in India's aviation sector. These incidents include both major and minor instances in the Indian air space.

On the global front, Asian markets were trading mostly in green, after the European Commission agreed to changes in a Brexit deal ahead of a vote in the British parliament on a divorce agreement. Back home, the BSE Sensex is currently trading at 37410.35, up by 356.25 points or 0.96% after trading in a range of 37230.85 and 37519.08. 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 0.61%, while Small cap index was up by 0.85%.

The top gaining sectoral indices on the BSE were Realty up by 3.08%, Capital Goods up by 2.04%, Telecom up by 1.97%, Industrials up by 1.47% and Energy up by 1.26%, while IT down by 0.09% was the top losing index on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.29%, Larsen & Toubro up by 3.08%, ICICI Bank up by 2.62%, Indusind Bank up by 1.97% and Reliance Industries up by 1.69%. On the flip side, NTPC down by 0.86%, Infosys down by 0.55%, Hero MotoCorp down by 0.41%, SBI down by 0.28% and Bajaj Auto down by 0.25% were the top losers.

Meanwhile, in a major overhaul of oil and gas exploration permits, the government will not charge any share of profit on hydrocarbons produced from less explored areas as it looks to attract private, foreign investments to raise domestic output. Breaking from the two-and-a-half decade-old practice of having a uniform contractual regime for all sedimentary basins in the country, the new policy provides for different rules for areas that already have producing fields and ones where commercial production of oil and gas is yet to be established. 

Irrespective of the basins, producers will get complete marketing and pricing freedom for oil and gas in future bid rounds. Oil and gas acreage or blocks in all future bid rounds will be awarded primarily on the basis of exploration work commitment. While companies will have to pay a share of revenue from oil and gas produced in Category-I sedimentary basins such as Krishna Godavari, Mumbai Offshore, Rajasthan or Assam where commercial production has already been established, they will be charged only prevalent royalty rates on oil and natural gas in the less explored Category-II and III basins.

To expedite production, concessional royalty rates will be applicable if production is commenced within four years for on land and shallow water blocks, and five years for deep water and Ultra-deepwater blocks from the effective date of the contract. India began bidding out oil and gas exploration acreage in 1999 under New Exploration Licensing Policy (NELP) that awarded blocks to companies offering maximum work commitment. But companies were obliged to share with the government profits made after recovery of cost. 

The CNX Nifty is currently trading at 11267.45, up by 99.40 points or 0.89% after trading in a range of 11227.00 and 11305.00. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.09%, Larsen & Toubro up by 3.22%, ICICI Bank up by 2.67%, Adani Ports & SEZ up by 2.65% and Ultratech Cement up by 2.32%. On the flip side, Bharti Infratel down by 0.95%, NTPC down by 0.63%, Tech Mahindra down by 0.50%, Infosys down by 0.49% and Hero MotoCorp down by 0.49% were the top losers.

Taiwan Weighted added 93.05 points or 0.91% to 10,343.33, Hang Seng increased 326.39 points or 1.15% to 28,829.69, Shanghai Composite gained 17.25 points or 0.57% to 3,044.24, Nikkei 225 surged 395.47 points or 1.87% to 21,520.56, KOSPI rose 19.08 points or 0.89% to 2,157.18 and Straits Times was up by 30.05 points or 0.94% to 3,221.47. On the other hand, Jakarta Composite was down by 17.22 points or 0.27% to 6,349.21.

Asian markets were trading mostly in green; Taiwan Weighted added 93.05 points or 0.91% to 10,343.33, Hang Seng increased 326.39 points or 1.15% to 28,829.69, Shanghai Composite gained 17.25 points or 0.57% to 3,044.24, Nikkei 225 surged 395.47 points or 1.87% to 21,520.56, KOSPI rose 19.08 points or 0.89% to 2,157.18 and Straits Times was up by 30.05 points or 0.94% to 3,221.47. On the other hand, Jakarta Composite was down by 17.22 points or 0.27% to 6,349.21.