Markets trade firm in early deals; Sensex above 40,500 mark

Indian equity benchmarks made slightly positive start and gained traction in early deals on Monday, due to  heavy buying in telecom, metal and realty indices, amid strong global cues. Traders took encouragement with data showing that after declining for four consecutive months, investments through participatory notes (P-notes) in the Indian capital market marginally rose to Rs 76,773 crore at the end of October. Some support also came in with a survey by the National Statistical Office (NSO) showing that urban unemployment rate dropped to the lowest level in four quarters at 9.3 per cent during January-March 2019. Adding optimism among market participants, the Reserve Bank of India (RBI) data showed that India's forex reserves rose by $441 million to a fresh lifetime high of $448.249 billion in the week to November 15 on an increase in core currency assets. Investors overlooked report that the government raised concerns over fake invoices being generated in the business-to-business (B2B) segment which is impacting GST collections.

On the global front, most of the Asian markets were trading higher as investors dared to hope for some progress in the endless US-China trade dispute, while the outperformance of recent US economic data gave the dollar a leg up on its peers. Back home, the government plans to amend the Insolvency and Bankruptcy Code (IBC) to provide immunity to companies taking over stressed assets from prosecution for financial crimes committed by erstwhile promoters. This will help make the insolvency process more attractive for the bidders and instill confidence in them. In scrip specific development, Reliance Communications (RCom) jumped amid reports that Mukesh Ambani's Reliance group will likely make a bid for the RCom and its related companies. Ashoka Buildcon gained after its subsidiary Ashoka Concessions bagged a highway project in Telangana worth Rs 1,000 crore.

The BSE Sensex is currently trading at 40561.52, up by 202.11 points or 0.50% after trading in a range of 40393.90 and 40596.86. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.37%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Telecom up by 2.36%, Metal up by 1.74%, Realty up by 1.71%, Basic Materials up by 0.95% and Energy was up by 0.73%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 2.59%, Bharti Airtel up by 2.43%, Sun Pharma Industries up by 2.04%, Mahindra & Mahindra up by 1.18% and Vedanta up by 1.16%. On the flip side, HCL Technologies down by 0.72%, Asian Paints down by 0.64%, TCS down by 0.57%, Tata Motors - DVR down by 0.47% and ONGC down by 0.41% were the top losers.

Meanwhile, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) has jumped to Rs 76,773 crore at the end of October from Rs 76,611 crore at September-end. Before registering gain in October, investments through P-notes had been declining continuously since June. At the end of August, the Indian capital market saw a total inflow of Rs 79,088 crore through P-notes, a drop from Rs 81,082 crore till July-end. The investment had stood at Rs 81,913 crore at June-end and Rs 82,619 crore at the end of May.

According to the latest data from the Securities and Exchange Board of India (SEBI), the total value of P-note investments in the Indian markets - equity, debt, and derivatives - increased to Rs 76,773 crore at October-end. Of the total investments made till the end of October, Rs 52,753 crore was invested in the equities, Rs 23,316 crore in debt and Rs 704 crore in the derivatives segments. The use of P-notes has been on a decline since 2017 and slumped to a nine-and-a-half year low of Rs 66,587 crore at the end of October last year.

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 after going through a due diligence process. In July 2017, markets regulator SEBI had notified stricter P-notes norms stipulating a fee of $1,000 that will be levied 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.

The CNX Nifty is currently trading at 11969.05, up by 54.65 points or 0.46% after trading in a range of 11919.75 and 11982.10. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.81%, Bharti Infratel up by 2.78%, Tata Steel up by 2.71%, Bharti Airtel up by 2.51% and Hindalco up by 2.21%. On the flip side, Zee Entertainment down by 2.90%, BPCL down by 0.69%, HCL Technologies down by 0.68%, Wipro down by 0.66% and TCS down by 0.48% were the top losers.

Asian markets were trading mostly trading in green; Hang Seng increased 467.45 points or 1.76% to 27,062.53, Nikkei 225 surged 171.34 points or 0.74% to 23,284.22, KOSPI rose 22.22 points or 1.06% to 2,124.18, Taiwan Weighted strengthened 21.04 points or 0.18% to 11,587.84, Straits Times advanced 10.46 points or 0.32% to 3,236.11 and Shanghai Composite gained 10.20 points or 0.35% to 2,895.49. On the flip side, Jakarta Composite was down by 6.72 points or 0.11% to 6,093.52.