Benchmarks trade in fine fettle in early deals; Nifty reclaims 8,000 mark

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Tuesday with frontline gauges recapturing their crucial 8,000 (Nifty) and 26,800 (Sensex) bastions. Some support came in with a World Bank report saying that India’s GDP is likely to expand by 5.6 per cent this fiscal as reforms gain momentum and the growth is expected to accelerate as proposed measures such as GST will give a boost to manufacturing sector. World Bank has also said that implementation of the goods and service tax (GST) is the most critical reform needed for Indian manufacturing. On the global front, the US markets ended almost flat, trading directionless for much of the trading session. While there was some profit taking on the strong performance shown by the markets last week, the traders also remained cautious ahead of the Federal Reserve's monetary policy announcement on Wednesday. The Asian markets were trading mostly in the red at this point of time tailing weak cues from the US markets where data from home sales to manufacturing fell short of estimates. Back home, sentiments got some support from report that foreign institutional investors (FIIs) were net buyers to the tune of around Rs 49.14 crore on October 27, 2014. On the sectoral front, capital goods, banking and healthcare witnessed the maximum gain in trade, while infrastructure, oil and gas and power remained the top losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1114 shares on the gaining side against 661 shares on the losing side while 72 shares remain unchanged. The BSE Sensex opened at 26788.73; around 36 points higher as compared to its previous closing of 26752.90, and has touched a high and a low of 26865.11 and 26785.89 respectively. The BSE Sensex is currently trading at 26844.18, up by 91.28 points or 0.34%. There were 18 stocks advancing against 12 stocks declining on the index. The overall market breadth remained in the favour of advances with 60.31% stocks advancing against 35.79% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index up by 0.52%. The gaining sectoral indices on the BSE were Capital Goods up by 0.82%, Bankex up by 0.77%, Healthcare up by 0.63%, Realty up by 0.43%, IT up by 0.34% while, Infrastructure down by 0.50%, Oil & Gas down by 0.40%, Power down by 0.40%, Metal down by 0.31% and Consumer Durables down by 0.19% were the losing indices on BSE. The top gainers on the Sensex were Sun Pharma up by 1.90%, SBI up by 1.77%, ICICI Bank up by 1.76%, GAIL India up by 1.60% and Wipro up by 1.51%. On the flip side, Bharti Airtel down by 2.80%, BHEL down by 1.53%, Hero MotoCorp down by 1.51%, Reliance Industries down by 0.91% and Coal India down by 0.89% were the top losers. Meanwhile, with the intent of restricting oil imports and protecting domestic farmers, the government is mulling over an issue of raising import duty on crude and refined edible oils, among other matters. In the wake of local prices of oil falling to historic lows due to cheaper imports from Malaysia and Indonesia, Industry body Solvent Extractors Association (SEA) has been demanding a duty hike in crude edible oils to 10% and on refined edible oils to 25%. Further, in the meeting held between the Food Minister Ram Vilas Paswan and Finance Minister Arun Jaitley on Friday, besides the import duty issue, problems faced by sugar mills in availing loans sanctioned through the Sugar Development Fund (SDF) along with the issue of additional budget allocation for FCI were discussed. Paswan, primarily, briefed Finance Minister about the current impasse between the UP sugar mills and the state government over cane price policy. The food minister was in the favour of relaxing certain norms so that sugar mills could avail loans easily from SDF, while seeking additional budget allocation for state-run Food Corporation of India (FCI) for giving food subsidies this fiscal. A budget allocation of Rs 92,000 crore has been made against the requirement of Rs 1,47,700 crore for this fiscal. The CNX Nifty opened at 8,002.40; around 11 points higher as compared to its previous closing of 7,991.70, and has touched a high and a low of 8,020.80 and 7,999.65 respectively. The CNX Nifty is currently trading at 8018.60, up by 26.90 points or 0.34%. There were 32 stocks advancing against 18 stocks declining on the index. The top gainers on Nifty were Zee Entertainment up by 2.39%, Sun Pharma up by 1.89%, ICICI Bank up by 1.77%, SBI up by 1.70% and Wipro up by 1.52%. On the flip side, Bharti Airtel down by 3.26%, Lupin down by 2.05%, BHEL down by 1.78%, Jindal Steel & Power down by 1.61% and Hero MotoCorp down by 1.48% were the top losers. Asian markets were trading mostly in the red; Nikkei 225 tumbled by 110.42 points or 0.72% to 15,278.30, KOSPI Index declined by 5.16 points or 0.27% to 1,926.81, Straits Times dropped 13.70 points or 0.42% to 3,212.41, Jakarta Composite dipped 22.27 points or 0.44% to 5,002.02 and FTSE Bursa Malaysia KLCI was down by 1.36  points or 0.07% to 1,821.79. On the flip side, Hang Seng soared 141.07 points or 0.61% to 23,284.30, Shanghai Composite spurted by 27.17 points or 1.19% to 2,317.61 and Taiwan Weighted was up by 126.69 points or 1.47% to 8,754.47.

Implementation of GST most required reform to boost manufacturing sector: World Bank

Just few days after Prime Minister Narendra Modi invited global firms to participate into 'Make in India' programme to spur manufacturing in the country, World Bank, in a twice yearly report on the Indian economy and its prospects, described implementation of goods and service tax (GST) as the most critical reform, which would go long way in boosting the manufacturing sector. According to the World Bank, implementation of GST would not only transform India into a common market, but will also eliminate inefficient tax cascading. Further, it emphasized that transformational impact of reform, if enhanced by a systematic dismantling of inter-state check posts, could considerably boost competitiveness and help counterbalance both domestic and external risks to the outlook. Further, World Bank which pegged India’s economic growth rate at 5.6% in 2014-15, followed by further acceleration to 6.4% and 7.0% in the next two financial years respectively, in its report added that merely halving the delays due to road blocks, tolls and other stoppages that would cut freight times by 20-30% and logistics costs by an even higher 30-40%, could strongly boost the competitiveness of India's key manufacturing sectors by 3 to 4% of net sales, thereby helping the country to resume its high growth path and enable large-scale job creation.

L&T secures order for construction of Statue of Unity

Larsen & Toubro (L&T) has secured order for construction of the Statue of Unity, World’s tallest statue in the riverbed of Narmada near Kevadia in Gujarat. The work order is worth Rs. 2,979 crore. The Statue of Unity project involves construction of 182-metre tall statue of Sardar Vallabhbhai Patel. The project was announced by Prime Minister Narendra Modi on October 31, 2013, the birth anniversary of the ‘Iron Man of India’. Of the total contract of Rs. 2,979 crore, Rs 1,347 crore will go towards building the statue, Rs 235 crore for constructing the exhibition centre and convention centre, Rs 134 crore for research and development centres and Rs 83 crore for building the bridge connecting memorial with the mainland. The construction will take place on the Sadhu bet, an island approximately 3.5 km south of Sardar Sarovar Dam at Kevadia. As per the terms of agreement, L&T will be responsible for maintenance and management of the project site for 15 year after the completion of construction. L&T will be paid Rs. 657 crore for the same. The construction of the statue is likely to be completed in the next 42 months.