Sensex, Nifty hit highest level in more than 12 weeks

After hovering in green in early trade, key benchmark indices extended gains in morning trade, with the barometer index, the S&P BSE Sensex, and the Nifty 50 index, both, hitting their highest level in more than 12 weeks. At 10:17 IST, Sensex was up 126.80 points or 0.5% at 25,465.38. The Nifty was currently up 33.20 points or 0.43% at 7,768.40. The Sensex rose 141.04 points, or 0.56% at the day's high of 25,479.62 in morning trade, its highest level since 6 January 2016. The index rose 2.89 points, or 0.01% at the day's low of 25,341.47 in early trade. The Nifty rose 33.70 points, or 0.44% at the day's high of 7,768.90 in morning trade, its highest level since 6 January 2016. The index fell 9.70 points, or 0.13% at the day's low of 7,725.50 in early trade.

The market may remain volatile as traders roll over positions in the futures & options (F&O) segment from the near month March 2016 series to April 2016 series. The March 2016 derivatives contracts are set to expire today, 31 March 2016.

The market breadth indicating the overall health of the market was strong. On BSE, 1,074 shares rose and 672 shares fell. A total of 102 shares were unchanged. The BSE Mid-Cap index was currently up 0.24%. The BSE Small-Cap index was currently up 0.44%. Both these indices underperformed the Sensex.

In the overseas stock markets, Asian stocks witnessed a mixed trend. US stocks extended gains for the third day yesterday, 30 March 2016, although shares ended well off their day's highs amid a dip in crude oil prices. Sentiment was underpinned by data from payroll firm ADP showing slightly stronger than expected private sector job growth in March.

Most power generation stocks edged higher. Tata Power (up 1.84%), Adani Power (up 1.38%), Torrent Power (up 1.14%), Jaiprakash Power Ventures (up 1.09%), NHPC (up 0.66%), NTPC (up 0.39%) and Reliance Power (up 0.21%), edged higher. CESC (down 0.01%), Reliance Infrastructure (down 0.33%) and JSW Energy (down 0.44%), edged lower.

Sugar stocks were in demand. DCM Shriram Industries (up 6.15%), Dwarikesh Sugar Industries (up 4.23%), Oudh Sugar Mills (up 3.93%), Empee Sugars and Chemicals (up 3.46%), Triveni Engineering & Industries (up 3.10%), Shree Renuka Sugar (up 2.06%), EID Parry (India) (up 1.83%), Balrampur Chini Mills (up 0.69%), Rana Sugars (up 0.60%), KCP Sugar & Industries Corporation (up 0.53%), Sakthi Sugars (up 0.53%), Dhampur Sugar Mills (up 0.52%) and Bajaj Hindusthan Sugar (up 0.24%), edged higher. Upper Ganges Sugar & Industries was down 1.49%.

Shares of the companies engaged in gas exploration & production business edged lower on media reports that the government has reduced the price of locally produced gas by about 20% for the six months period starting 1 April 2016, compared with the previous six months period. Cairn India (down 1.37%), ONGC (down 1.93%) and Oil India (down 0.24%), edged lower. Gas price will be cut to $3.06 per million British thermal units (mmBtu) on gross heat value basis in the first half of the next fiscal year starting 1 April 2016, reports suggested. It will cost about $3.4 per mmBtu on a net heat value basis compared with $4.24 per mmBtu for the period from 1 October 2015 to 31 March 2016, as per reports.

Index heavyweight Reliance Industries (RIL) was up 0.77% to Rs 1,052.95. The stock hit a high of Rs 1,053.50 and a low of Rs 1,042 so far during the day.

Meanwhile, the Reserve Bank of India (RBI) after trading hours yesterday, 30 March 2016, announced that companies in infrastructure sector, Non-Banking Financial Companies-Infrastructure Finance Companies (NBFC-IFCs), NBFCs-Asset Finance Companies (NBFC-AFCs), Holding Companies and Core Investment Companies (CICs) will be eligible to raise External Commercial Borrowings (ECB) with minimum average maturity period of 5 years subject to 100% hedging. Infrastructure firms include companies in exploration, mining and refinery sectors. The individual limit of borrowing under the automatic route remains at $750 million. NBFCs-IFCs and NBFCs-AFCs will be allowed to raise ECB only for financing infrastructure. Holding Companies and CICs will be allowed to use ECB proceeds only for on-lending to infrastructure Special Purpose Vehicles (SPVs).

The minimum average maturity of Foreign Currency Convertible Bonds (FCCBs)/Foreign Currency Exchangeable Bonds (FCEBs) is 5 years irrespective of the amount of borrowing. The call and put option, if any, for FCCBs cannot be exercisable prior to 5 years. Only those NBFCs, which are coming under the regulatory purview of the Reserve Bank of India, are permitted to raise ECB.

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