Local equities continue positive trend; Nifty surpasses 11,550 mark

Mirroring positive global cues, local equity benchmarks continued to show a positive trend in morning session, with gains of around half a percent. Investors were seen piling positions in Metal, Oil & Gas and Healthcare sector, while selling was witnessed in Consumer Durables and IT sector stocks. Investors took encouragement from Union minister V Muraleedharan’s statement that India attracted foreign direct investment of $64.4 billion in the last fiscal, and aims is to take it higher as it moves forward. Traders also took some support with Minister for Environment Prakash Javadekar’s statement that with an aim to increase investments so as to soon meet the ambitious goal of $5-trillion economy, Prime Minister Narendra Modi-led government intends to fasten the process of granting environmental clearances to the businesses. The processes will become even faster as the government intends to reduce the average number of days for granting permissions and approvals from 108 to 70-80 days. However, market participants ignored a private report stating that the country's real GDP growth is likely to be 6.7% from 6.9% forecasted earlier in FY20 citing the continuing slowdown in consumption demand and warned that a revival is unlikely before FY21.

On the global front, Asian markets were trading mostly in green after US Federal Reserve Chairman Jerome Powell signaled overnight that the US central bank could be cutting interest rates soon. Back home, Reserve Bank of India data showed that India Inc’s foreign direct investment in June fell by over two times from a year ago to $820.36 million. The outward foreign direct investment (OFDI) by the Indian firms stood at $2.29 billion in the year-ago same month.

The BSE Sensex is currently trading at 38733.70, up by 176.66 points or 0.46% after trading in a range of 38631.31 and 38774.80. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Metal up by 1.15%, Oil & Gas up by 1.08%, Healthcare up by 0.92%, Utilities up by 0.91% and Telecom was up by 0.89%, while Consumer Durables down by 1.23%, IT down by 0.35% and TECK was down by 0.12% were the few losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.09%, IndusInd Bank up by 1.74%, Tata Steel up by 1.57%, ONGC up by 1.48% and Vedanta was up by 1.47%. On the flip side, Bajaj Auto down by 2.04%, Tech Mahindra down by 1.78%, ICICI Bank down by 0.87%, Yes Bank down by 0.75% and TCS was down by 0.53% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that the hospital sector is seeing better days ahead after more than two years of subdued performance which was mainly due to several regulatory measures. It highlighted that the tough days were triggered primarily on account of several regulatory measures, including the cap on prices of stents and knee implants by the National Pharmaceutical Pricing Authority (NPPA).

It further mentioned that adverse impact of the GST rollout on profitability, strict regulatory actions taken by multiple States including restrictions on procedure rates -levying penalties and placing operational limitations on erring hospitals were other measures that impacted the sector. The performance was also impacted due to the start-up cost of new hospitals owing to significant capex by entities in the sector, and the long gestation period required for the new facilities to ramp up.

Kapil Banga, Assistant Vice President - Corporate Ratings, ICRA, said ‘in line with our expectations, the performance of the players in the sector has likely bottomed out, after struggling for more than two years. Nonetheless, the regulatory environment continues to be the overarching challenge for the hospital sector; the wide-ranging regulatory restrictions from multiple authorities had suppressed their margins.’

Besides, in the last financial year (FY19), revenues of the companies in Icra's sample set grew 10 per cent to Rs 15,891 crore compared to revenues of Rs 14,475 crore in the previous fiscal. Sample set comprised of Apollo Hospitals Enterprise, Fortis Healthcare, Narayana Hrudalaya, Healthcare Global Enterprises, Max India and Shalby.

The CNX Nifty is currently trading at 11551.70, up by 52.80 points or 0.46% after trading in a range of 11519.50 and 11561.70. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.75%, Dr. Reddy’s Lab up by 2.38%, Hero MotoCorp up by 2.20%, Zee Entertainment up by 1.97% and IndusInd Bank was up by 1.73%. On the flip side, Titan Company down by 1.93%, Tech Mahindra down by 1.91%, Bajaj Auto down by 1.91%, Yes Bank down by 1.08% and ICICI Bank was down by 1.02% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 283.66 points or 1.01% to 28,488.35, Nikkei 225 surged 98.36 points or 0.46% to 21,631.84, Taiwan Weighted strengthened 51.44 points or 0.48% to 10,849.92, Straits Times advanced 22.24 points or 0.67% to 3,362.66, KOSPI rose 21.14 points or 1.03% to 2,079.92 and Shanghai Composite was up by 9.55 points or 0.33% to 2,924.85. On the other side, Jakarta Composite was down by 4.67 points or 0.07% to 6,406.01.