Benchmarks continue to trade higher in late morning

Benchmarks continue to trade higher amid volatility led by a firming trend in the Asian region, following overnight gains in the US markets after strong trade data boosted expectations for US growth, helped trading sentiment to improve. Some support came in after Finance Minister P Chidambaram has asked taxmen to step up collections in view of fiscal deficit threatening to exceed the target. However, investor remained concern about foreign flows after overseas investors sold 13.29 billion rupees worth of index futures on Tuesday, leading to total sales of 23.34 billion rupees over the previous three sessions, according to exchange data.

On the global front, most of the Asian markets were trading in the green at this point of time taking cues from the US markets and some of the indices are up by about a percent in early deals ahead of the release of Federal Reserve minutes. Back home, traders were buying, Healthcare, Oil & Gas and Power while, selling was seen in FMCG and Capital Goods on the BSE. Stocks related to gold and jewellery space viz. Rajesh Exports, Shree Ganesh Jewellery, Gitanjali Gems, PCJeweller etc. edged higher, as the Planning Commission member Saumitra Chaudhuri has pitched for relaxation in curbs on gold imports citing improved current account deficit. Gold imports fell to 19.3 tonnes in November from a high of 162 tonnes in May in the wake of a series of curbs by both the government and the RBI.

The market breadth on BSE remains positive with advances to declines in the ratio of 1234:560. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,700 and 6,150 levels respectively. The BSE Sensex is currently trading at 20763.24 up by 70.00 points or 0.34% after trading in a range of 20779.54 and 20688.18. There were 6 stocks advancing against 24 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.19% and Small cap index gained 0.11%.

The top gaining sectoral indices on the BSE were, Healthcare up by 1.07%, Oil & Gas up by 0.84%, Power up by 0.65%, Realty up by 0.59% and Auto up by 0.57%, while FMCG down by 0.13% and Capital Goods down by 0.07% were the only losers on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 2.40%, Cipla up by 2.24%, Tata Power up by 2.01%, Gail India up by 1.75%, and Hindalco Inds up by 1.47%. On the flip side, Axis Bank was down by 1.07%, Wipro was down by 0.80%, BHEL was down by 0.79%, SSLT was down by 0.54%, and ITC was down by 0.46% were the top losers on the Sensex.

Meanwhile, In order to meet disinvestment target at Rs 40,000 crore for current financial year, the government has planned to sell stakes in Public Sector Undertakings (PSUs) such as Indian Oil Corporation and Engineers India in January. The government also proposes to offload equity in BHEL in February and Hindustan Aeronautics (HAL) in March.

The government has so far only managed to raise Rs 3,000 crore from disinvestment in seven PSUs, including Power Grid Corporation of India, Hindustan Copper, National Fertilisers and MMTC. On the other hand, country’s fiscal deficit touched around 94 percent of the budgeted target in the first eight months of the current fiscal. The government has set fiscal deficit target at 4.8% of GDP for current fiscal.

The government has decided to offload 10 percent stake sale in IOC and EIL and are expected to yield Rs 5,000 crore and Rs 500 crore, respectively. It also proposes to garner Rs 3,000 crore from a 10 percent stake sale in HAL and Rs 2,000 crore from 5 percent stake sale in BHEL. The government will also float some PSU shares through the Central Public Sector Enterprises ETF, which is estimated to have a corpus of Rs 3,000 crore. The ETF would serve as an additional mechanism for the government to monetise its shareholdings in companies. The exchange-traded fund (ETF) is set up to reduce volatility in shares of state-owned companies and comprises 2-3 percent of the shares of PSUs.

The CNX Nifty is currently trading at 6,184.50 up by 22.25 points or 0.36% after trading in a range of 6,190.65 and 6,160.35. There were 36 stocks advancing against 14 stock declines on the index. 

The top gainers of the Nifty were Sun Pharmaceuticals up by 2.31%, Cipla up by 2.24%, Cairn up by 1.99%, GAIL up by 1.88% and NMDC up by 1.76%. On the flip side, Axis Bank down by 1.23%, Wipro down by 1.05%, BPCL down by 0.85%, Grasim down by 0.83% and BHEL down by 0.76% were the top losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 273.65 points or 1.20% to 22,986.43, KLSE Composite increased 10.43 points or 0.57% to 1,835.54, Nikkei 225 surged 238.39 points or 1.51% to 16,052.52, Straits Times added 20.31 points or 0.65% to 3,141.19, and Taiwan Weighted was up by 57.00 points or 0.67% to 8,569.30. On the flip side, Shanghai Composite declined 4.45 points or 0.22% to 2,042.87, Seoul Composite edged lower 0.15 points or 0.02% to 1,959.11 and Jakarta Composite was down by 0.96 points or 0.02% to 4,174.85.