Benchmarks extend opening gains to trade higher in early deals

Indian equity benchmarks made slightly positive start on Tuesday amid mixed global cues. Soon, markets extended their gains and are trading higher with notable gains in early deals on account of buying in Energy, Consumer Durables and Telecom stocks. Sentiments got a boost with the Centre for Monitoring Indian Economy (CMIE) data showing that India witnessed an addition of 16 million jobs in July mainly in the agriculture and construction sectors. Some support came in as the Reserve Bank issued draft guidelines to further liberalise regulatory framework governing overseas investments with a view to promote ease of doing business. Adding more optimism, the Finance Ministry said a Bill to end retrospective taxes imposed on indirect transfer of Indian assets will encourage companies to invest in India and help the country become a $5-trillion economy. Market participants overlooked report that GST officers detected over Rs 4,000 crore of Input Tax Credit (ITC) fraud in June quarter 2021-22.

On the global front, Asian markets are trading mixed following the mixed cues from Wall Street overnight, with a steep drop in crude oil prices and the surge in the spread of the delta variant of coronavirus and the resultant fresh restrictions in several countries, including China, weighing on investor sentiment. Back home, Auto stocks were in focus as India's overall vehicle retail sales on both sequential and year-on-year basis in July 2021 with low base and rising demand. The data released by the Federation of Automobile Dealers Associations (FADA) showed a rise of 34.12 per cent during the month under review from the level of July 2020. In scrip specific development, Indian Hotels Company gained after reporting narrowing of its consolidated net loss to Rs 301.58 crore for the quarter ended June 30, 2021 as against a net loss of Rs 312.60 crore posted in the corresponding period of the previous financial year.

The BSE Sensex is currently trading at 54625.00, up by 222.15 points or 0.41% after trading in a range of 54450.34 and 54671.03. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.21%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Energy up by 0.65%, Consumer Durables up by 0.64%, Telecom up by 0.56%, Bankex up by 0.52%, IT up by 0.45%, while Power down by 0.48%, Utilities down by 0.42%, Metal down by 0.25%, Basic Materials down by 0.22%, FMCG down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.54%, HDFC up by 1.23%, Mahindra & Mahindra up by 0.83%, Reliance Industries up by 0.79% and HCL Technologies up by 0.79%. On the flip side, Power Grid down by 1.87%, Bajaj Auto down by 0.47%, Nestle down by 0.36%, ITC down by 0.33% and Asian Paints down by 0.26% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has issued draft guidelines to further liberalise regulatory framework governing overseas investments with a view to promote ease of doing business. The RBI has placed on its website two documents -- draft Foreign Exchange Management (Non-debt Instruments - Overseas Investment) Rules, 2021 and draft Foreign Exchange Management (Overseas Investment) Regulations, 2021.

The Draft Foreign Exchange Management (Non-debt Instruments - Overseas Investment) Rules, 2021 has outlined the restrictions on overseas investments. As per the draft, a person resident in India is prohibited from making Overseas Direct Investment (ODI) in a foreign entity engaged in real estate activity; gambling in any form; and offering financial products linked to Indian Rupee except for products offered in an IFSC. Also, it said overseas investment will remain prohibited a foreign entity located in countries/ jurisdictions that are not Financial Action Task Force (FATF) and International Organization of Securities Commissions (IOSCO) compliant country or any other country/ jurisdiction as may be prescribed by the central government.

The other draft on Foreign Exchange Management (Overseas Investment) Regulations, 2021 proposes that an Indian entity may lend or invest in any debt instruments issued by a foreign entity subject to such loans duly backed by a loan agreement and the rate of interest shall be charged on an arm's length basis, among other things.

The CNX Nifty is currently trading at 16312.20, up by 53.95 points or 0.33% after trading in a range of 16261.05 and 16327.85. There were 30 stocks advancing against 19 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 1.55%, HDFC up by 1.20%, Mahindra & Mahindra up by 0.85%, Reliance Industries up by 0.81% and HCL Technologies up by 0.78%. On the flip side, Shree Cement down by 3.27%, Power Grid down by 1.90%, Hero MotoCorp down by 0.65%, JSW Steel down by 0.58% and Nestle down by 0.44% were the top losers.

Asian markets are trading mixed; Taiwan Weighted fell 106.23 points or 0.61% to 17,378.92, KOSPI lost 21.55 points or 0.66% to 3,238.87, Jakarta Composite slipped 79.46 points or 1.30% to 6,048.00 and Shanghai Composite was down by 4.89 points or 0.14% to 3,489.74. On the other hand, Nikkei 225 added 26.12 points or 0.09% to 27,846.16, Straits Times rose 16.79 points or 0.53% to 3,193.97 and Hang Seng gained 77.05 points or 0.29% to 26,360.45.