Local equities cut some initial gains; Nifty holds 11,300 mark

Local benchmarks trimmed some of their initial gains in morning session and continue to trade in green territory. Traders were seen piling positions in Telecom, Healthcare and Power sector, while selling was witnessed in Metal, Oil & Gas and Energy sector stocks. Traders took note of Economic Advisory Council to the Prime Minister’s (EAC-PM) report that the growth in R&D expenditure should be commensurate with the economy’s growth and should be targeted to reach at least 2 per cent of the GDP by 2022. Some optimism came with Finance minister Nirmala Sitharaman’s statement that the direct tax collection target for the current fiscal is ‘eminently achievable’ given that the mop-up has nearly doubled in the last five years. The markets took support from a report that India’s GDP is expected to grow at 6.8 per cent in FY20, making it a second straight year of sub-7% expansion. In FY19 too, the economy grew at a rate of 7%. Market-men also took some comfort from a private report that the Reserve Bank of India is set to cut interest rates in August for the fourth meeting in a row, a majority of whom said risks to their already-modest growth forecasts were skewed more to the downside.

On the global front, Asian markets were trading mostly in green, drawing support from confirmation of new US-China trade talks and hopes of central bank stimulus. Back home, a report showed that India has improved its ranking on the global innovation index (GII) by five places to stand at 52nd in 2019 from 57th position last year and maintained its position as the top exporter of IT services.

The BSE Sensex is currently trading at 37977.66, up by 130.01 points or 0.34% after trading in a range of 37869.55 and 38169.87. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.42%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Telecom up by 1.18%, Healthcare up by 0.91%, Power up by 0.63%, BANKEX up by 0.54% and TECK was up by 0.48%, while Metal down by 0.76%, Oil & Gas down by 0.47%, Energy down by 0.45%, PSU down by 0.29% and Capital Goods was down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were IndusInd Bank up by 2.82%, Axis Bank up by 1.29%, Bajaj Auto up by 1.20%, Power Grid up by 1.19% and Sun Pharma was up by 1.15%. On the flip side, Tech Mahindra down by 1.64%, Tata Motors down by 1.55%, Mahindra & Mahindra down by 1.08%, Tata Steel down by 0.95% and HCL Tech was down by 0.70% were the top losers.

Meanwhile, in a move to incentivize wind energy projects, the Ministry of New and Renewable Energy (MNRE) has made certain amendments to the bidding guidelines for such projects. This includes measures to overcome hurdles like delays in acquisition of land by wind power project developers. The amendments have been made based on the experience of bidding and consultation with various stakeholders. The development assumes significance as the government has set an ambitious target of having 175 GW of clean energy capacity by 2022, including 100 GW solar and 60 GW of wind energy.

The ministry said now the timeline for land acquisition for wind power projects has been extended from seven months to scheduled commissioning date i.e. 18 months. This will help wind power project developers in states where land acquisition takes longer time. Moreover, it mentioned that the window for revision of declared CUF (capital utilisation factor) of wind power project has been increased to three years. The declared CUF is now allowed to revise once within three year of commercial operation date, which was earlier allowed within one year only.

It said that the penalty on shortfall in energy corresponding to the minimum CUF has now been fixed at 50 per cent of the PPA tariff for the shortfall in energy terms liable to be paid by the wind power generator to the procurer. Further, the penalty shall be passed on by the intermediary procurer to the end procurer after deducting the losses of intermediary procurer. In cases of early part commissioning, the procurer may purchase the generation, at full PPA tariff.

The CNX Nifty is currently trading at 11303.15, up by 31.85 points or 0.28% after trading in a range of 11274.90 and 11361.40. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Cipla up by 3.31%, Bharti Infratel up by 3.24%, IndusInd Bank up by 2.76%, Sun Pharma up by 1.49% and Ultratech Cement was up by 1.37%. On the flip side, Tata Motors down by 1.79%, Tech Mahindra down by 1.63%, Coal India down by 1.20%, JSW Steel down by 1.14% and Tata Steel was down by 1.08% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 84.51 points or 0.3% to 28,608.55, Nikkei 225 surged 75.49 points or 0.35% to 21,785.06, Jakarta Composite soared 15.59 points or 0.24% to 6,400.58, Shanghai Composite gained 8.62 points or 0.29% to 2,931.90 and Straits Times was up by 8.40 points or 0.25% to 3,376.84.

On the other hand, Taiwan Weighted dropped 9.02 points or 0.08% to 10,926.74 and KOSPI was down by 9.10 points or 0.44% to 2,073.20.