Local equities gather some pace in morning deals; Nifty surpasses 12,200 mark

Local equity benchmarks have gathered pace and continue to trade firm in early noon session due to increased buying by funds. Among heavy-weights ICICI Bank, HCL Tech and Hero MotoCorp exhibited a smart performance. Traders took optimism from Union minister Piyush Goyals’ statement the Indian economy is well-poised to take off, there is a lot of enthusiasm for making investments in the country. The government will hold discussions with Britain and European Union on free trade agreements. Positivism also came with a report that in the fourth special open market operation (OMO) auctions, the Reserve Bank of India (RBI) bought Rs 10,000 crore worth of long-term securities and sold Rs 2,950 crore worth of short-term government bonds. Besides, the RBI has doubled the investment limit for FPIs (foreign portfolio investors) in government and corporate bonds to Rs 1.5 lakh crore, via the Voluntary Retention Route and allowed them to invest in exchange-traded funds (ETF) that invest only in debt instruments. However, upside remain capped with a private report that India’s economy appears to be shaking off a slump, as activity in the services and manufacturing sectors expanded for a second straight month in December.

On the global front, Asian markets were trading mostly in green, on the eve of Lunar New Year celebrations. However, traders maintained a cautious approach after a broad sell-off the previous day over growing coronavirus fears. Back home, on the sectoral front, infrastructure sector remain in focus, as a report showed that the year 2019 recorded a record year for PE/VC investments on the back of large investments in infrastructure sector. The report said that 2019 recorded investments worth $48 billion across 1,037 deals, with investments of $14.5 billion in infrastructure sector.

The BSE Sensex is currently trading at 41573.23, up by 186.83 points or 0.45% after trading in a range of 41275.60 and 41587.18. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.68%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Auto up by 0.99%, Capital Goods up by 0.96%, Consumer Disc up by 0.95%, BANKEX up by 0.86% and Consumer Durables was up by 0.82% while, Telecom down by 0.58%, IT down by 0.45% and TECK was down by 0.44% were the few losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.71%, HCL Tech up by 1.49%, Hero MotoCorp up by 1.35%, Larsen & Toubro up by 1.27% and Axis Bank was up by 1.21%. On the flip side, Power Grid down by 2.43%, Infosys down by 0.82%, TCS down by 0.75% and Bharti Airtel was down by 0.59% were the top losers.

Meanwhile, with a view to bring in more foreign funds in the country, the Reserve Bank of India (RBI) has raised the investment limit for foreign portfolio investors (FPIs) in government and corporate bonds. According to the current norms, short-term investments by a foreign portfolio investor (FPI) should not exceed 20 per cent of the total investment of that FPI in either central government securities (including treasury bills) or state development loans. The same norms are applicable on investments in corporate bonds.

The RBI said that the short-term investment limit has now been increased from 20 percent to 30 percent in both the cases. Meanwhile, it has also made relaxation in the voluntary retention route (VRR) for FPI investments in debt. The investment cap through VRR has been doubled to Rs 1.5 lakh crore.

It said FPIs that have been allotted investment limits under VRR may, at their discretion, transfer their investments made under the general investment limit to VRR. It added FPIs are also allowed to invest in exchange-traded funds that invest only in debt instruments.

The CNX Nifty is currently trading at 12237.35, up by 57.00 points or 0.47% after trading in a range of 12149.65 and 12246.35. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.40%, UPL up by 3.70%, Indian Oil Corporation up by 2.11%, ICICI Bank up by 1.64% and JSW Steel was up by 1.56%. On the flip side, Power Grid down by 2.80%, TCS down by 0.89%, Infosys down by 0.84%, Bharti Airtel down by 0.72% and Bharti Infratel down was by 0.68% were the top losers.

Asian markets are trading mostly in green, Nikkei 225 surged 49.98 points or 0.21% to 23,845.42, Hang Seng increased 40.52 points or 0.15% to 27,949.64, Straits Times was up by 5.46 points or 0.17% to 3,240.02. On the other hand, Jakarta Composite was down by 3.89 points or 0.06% to 6,245.32.