Firm trade continues over Dalal Street

Firm trade continued over the Dalal Street in late morning session, with both Sensex and Nifty holding strong gains. Positive cues from other Asian markets helped key indices to remain higher. Domestic sentiments were positive, amid reports that in a move that will be beneficial for the government during the proposed initial public offer of LIC, the Department of Economic Affairs under the finance ministry has amended the Securities Contracts (Regulation) Rules. With the latest amendment in rules, companies that have a market capitalisation of more than Rs 1 lakh crore at the time of listing can now sell just five per cent of their shares. Such entities will be required to increase their public shareholding to 10 per cent in two years and raise the same to at least 25 per cent within five years. Adding more optimism among traders, RBI data showed that bank credit grew by 5.74 per cent to Rs 108.43 lakh crore and deposits rose by 9.73 per cent to Rs 153.13 lakh crore in the fortnight ended June 4, 2021.

On the global front, Asian markets were trading mostly in green, after Taiwan's export orders increased more than expected in May. The data from the Ministry of Economic Affairs showed that export orders advanced 29.8 percent year-on-year in May. Orders for mineral products accelerated 182.1 percent yearly in May and those of basic metals and articles thereof surged 95.3 percent. Demand for plastics and articles thereof, rubber and articles thereof increased 80.7 percent and transport equipment gained 73.8 percent.

The BSE Sensex is currently trading at 52899.42, up by 324.96 points or 0.62% after trading in a range of 52800.82 and 53057.11. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.90%, while Small cap index was up by 1.28%.

The top gaining sectoral indices on the BSE were Auto up by 1.86%, Capital Goods up by 1.70%, Industrials up by 1.65%, Power up by 1.34% and Oil & Gas up by 1.33%, while FMCG down by 0.08% was the only losing index on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 4.62%, Larsen & Toubro up by 2.05%, Ultratech Cement up by 1.56%, ICICI Bank up by 1.24% and Mahindra & Mahindra up by 1.09%. On the flip side, Nestle down by 1.09%, Bajaj Finance down by 0.65%, Hindustan Unilever down by 0.64%, NTPC down by 0.64% and Asian Paints down by 0.29% were the top losers.

Meanwhile, in a move that will be beneficial for the government during the proposed initial public offer of LIC, the Department of Economic Affairs under the finance ministry has amended the Securities Contracts (Regulation) Rules. With the latest amendment in rules, companies that have a market capitalisation of more than Rs 1 lakh crore at the time of listing can now sell just five per cent of their shares. Such entities will be required to increase their public shareholding to 10 per cent in two years and raise the same to at least 25 per cent within five years.

The central government has said companies with an m-cap exceeding Rs 1 trillion will have to dilute Rs 5,000 crore and at least 5 per cent of their m-cap. Moreover, companies relisting after insolvency proceedings will need to have 5 per cent minimum public shareholding. This will have to be increased to 10 per cent within a year and 25 per cent in three years. While there was no minimum threshold of public holding at the time of acquisition earlier, it had to be increased to 10 per cent within 18 months.

In February this year, SEBI's board approved relaxing the minimum public offer norms for large issuers. Meanwhile, under the latest amended rules, ‘every listed company shall maintain public shareholding of at least five per cent as a result of implementation of the resolution plan approved under section 31 of the Insolvency and Bankruptcy Code, 2016’. Section 31 pertains to approval of resolution plans. The notification amending the rules was issued on June 18.

The CNX Nifty is currently trading at 15860.10, up by 113.60 points or 0.72% after trading in a range of 15812.45 and 15895.75. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 4.68%, UPL up by 3.32%, Adani Ports & SEZ up by 3.27%, Shree Cement up by 2.88% and Tata Motors up by 2.65%. On the flip side, Nestle down by 1.16%, Cipla down by 0.85%, Bajaj Finance down by 0.68%, NTPC down by 0.64% and Hindustan Unilever down by 0.57% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 2.47 points or 0.01% to 28,491.47, KOSPI rose 24.02 points or 0.74% to 3,264.81, Shanghai Composite gained 27.45 points or 0.78% to 3,556.63, Taiwan Weighted strengthened 76.56 points or 0.45% to 17,139.54, Jakarta Composite soared 90.70 points or 1.51% to 6,086.95 and Nikkei 225 surged 824.45 points or 2.94% to 28,835.38. On the flip side, Straits Times trembled 5.32 points or 0.17% to 3,112.55.