Benchmarks continue firm trade; Power, PSU lead

Indian equity benchmarks added gains to continue firm trade in the late afternoon session on account of buying in frontline counters. The sentiments were on optimistic note after Moody’s Investor Service stated that Bharatiya Janata Party’s resounding election win is credit positive for India as it boosts the prospect that a stable government will address the country’s economic challenges. The markets also got boost after rupee surged to 58.38 per dollar, its strongest in 11 months on expectations of continued robust foreign buying in domestic shares and debt. Traders were seen piling up positions in Power, PSU and Capital Goods stocks, while selling was witnessed in IT, HealthCare and TECK sector stocks. Hectic activity was witnessed in railway stocks like Texmaco Rail, Kalindee Rail Nirman, Titagarh Wagons, Kernex Microsystems and Hind Rectifiers riding the Modi bandwagon. In scrip specific development, Jaiprakash Power Ventures was trading firm on plans to raise up to Rs 3,000 crore to fund ongoing projects and reduce its debt. On the global front, the Asian markets were trading mostly in red, while the European markets traded too on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,250 and 24,300 levels respectively. The market breadth on BSE was positive in the ratio of 1943:747 while 111 scrips remained unchanged. The BSE Sensex is currently trading at 24369.90, up by 248.16 points or 1.03% after trading in a range of 24448.47 and 24107.99. 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 3.22%, while Small cap index up by 4.91%. The gaining sectoral indices on the BSE were Power up by 8.30%, Public Sector Undertaking (PSU) up by 8.01%, Capital Goods up by 7.28%, Realty up by 5.98% and Metal up by 5.85%. On the flip side, IT down by 5.47%, HealthCare down by 3.90%, TECK down by 3.87% and FMCG down by 2.94% were the losing indices on BSE.    The top gainers on the Sensex were BHEL up 12.58%, Coal India up by 11.67%, ONGC up by 8.12%, Tata Power up by 8.11% and NTPC up by 7.47%. On the flip side, TCS down by 7.12%, Sun Pharma down by 5.41%, Dr. Reddy’s Lab down by 5.31%, Wipro down by 4.86% and Infosys down by 4.84% were the top losers on the index.  Meanwhile, in a bid to increase the investments in India’s mutual fund industry, the Securities and Exchange Board of India (SEBI) has urged the finance ministry to consider various tax sops for mutual funds products to make them more attractive to retail investors. The move is a part of SEBI’s efforts to incentivise and channelise household savings into equity long-term investment products and final decision in this regard would be taken by the new government. Further, high investments by domestic investors would help in curbing the unwanted volatility in domestic equity markets and would reduce the excessive reliance on the foreign investors.  The market regulator has now submitted the draft to Finance Ministry comprising measures to enhance investments in mutual fund industry. Among various proposals, the SEBI proposed for creation of a long-term investment product, Mutual Fund Linked Retirement Plan, with an additional tax incentive of Rs 50,000. In order to make various mutual fund schemes eligible for such tax benefits, the SEBI wants the new government to enhance the tax exemption limit under Section 80C of the Income Tax Act from Rs 1 lakh to Rs 2 lakh. The regulator also wants the Rajiv Gandhi Equity Savings Scheme to be brought under the enhanced tax exemption limit. Besides, SEBI wants all Central Public Sector Enterprises (CPSEs) to be permitted to invest their surplus funds in mutual fund schemes. At present, only miniratna, navratana and CPSEs are allowed to invest in such schemes. There are about 45 fund houses present in the country with total assets worth over Rs 9 lakh crore. Over the past couple of years, the fund mobilisation to mutual fund houses has remained lower owing to the lack of tax benefits which has made mutual funds products unattractive to investors. The CNX Nifty is currently trading at 7,264.10, up by 61.10 points or 0.85% after trading in a range of 7,291.10 and 7,193.55. There were 31 stocks advancing against 19 declining on the index. The top gainers of the Nifty were BHEL up 11.81%, Coal India up by 11.71%, PNB up by 8.70%, ONGC up by 8.40% and NTPC up by 7.67%. On the flip side, TCS down by 7.37%, HCL Tech down by 6.98%, Sun Pharma down by 5.52%, Dr. Reddy’s Lab down by 5.15% and Infosys down by 4.99% were the major losers on the index. Asian equity indices were trading mostly in red; Hang Seng down by 0.04%, Shanghai Composite plunged 1.05%, Jakarta Index lost by 0.98%, Straits Times inched lower 0.04% and Nikkei 225 declined by 0.64% while, Taiwan Weighted added 0.13%. The European markets were trading in red; France’s CAC 40 was down by 0.54%, Germany’s DAX dropped 0.57% while UK’s FTSE 100 lost 0.49%.