Key benchmark indices continued to trade with small gains in early afternoon trade. At 12:25 IST, the barometer index, the S&P BSE Sensex, was up 22.35 points or 0.08% at 27,260.41. The Nifty 50 index was up 1.10 points or 0.01% at 8,401.45. Indices managed to buck weak trend in Asian counterparts as domestic data showing fall in trade deficit in December extended support amid slight rise in wholesale inflation.
Trading remained lackluster and within a narrow band near the flat line so far during the session. After hovering in the negative terrain from a flat opening, key indices reversed losses and traded with small gains.
Side counters witnessed buying as the BSE Mid-Cap index was up 0.32% and the BSE Small-Cap index was up 0.53%, with both these indices outperforming the Sensex. The market breadth, indicating the overall health of the market, was positive. On the BSE, 1,459 shares rose and 995 shares declined. A total of 149 shares were unchanged.
Shares of most power generation and power distribution companies gained. Torrent Power (up 0.62%), NHPC (up 2.22%), Adani Power (up 1.52%), Power Grid Corporation of India (up 0.76%), and Reliance Infrastructure (up 0.38%) and gained. Tata Power Company (down 0.5%) and Reliance Power (down 0.45%) declined.
NTPC gained 0.96% after the company said that first unit of 250 megawatts (MW) of Nabinagar Thermal Power Project of 1000 MW capacity of Bhartiya Rail Bijlee Company, BRBCL, a subsidiary of the company was declared on commercial operation from 15 January 2017. With this, the commercial capacity of Nabinagar Thermal Power Project of BRBCL and NTPC group has become 250 MW and 46178 MW respectively. The announcement was made during market hours today, 16 January 2017.
Meanwhile, there are expectations of sops for the power sector in the upcoming Budget 2017-18. The upcoming Budget may reportedly extend the 80 IA tax holiday, provide further impetus to renewable energy, particularly hydro projects, offer clarity on the applicability of GST, lower the cess on coal and possibly reduce corporate tax rates.
Coal India declined 0.48% after its subsidiaries revised coking coal prices. The board of directors of Central Coalfields, a subsidiary of Coal India (CIL), approved revision of coking coal prices 14 January 2017. The increase in price is done by subsuming the washery recovery charge (WRC) which was being charged separately in the case of non-linked washery grade coking coal keeping in view the observation of ADRM.
Due to this revision, Coal India (CIL) will earn approximately additional revenue of Rs 89.98 crore for the balance period of financial year 2016-2017, i.e. from 13 January 2017 to 31 March 2017 and additional revenue of Rs 222 crore for financial year 2017-2018 subject to achievement of production and dispatch target norms. The announcement was made on Saturday, 14 January 2017.
In a separate announcement after market hours on Friday, 13 January 2017, CIL said that the board of Bharat Coking Coal, a subsidiary of CIL, approved revision of coking coal prices from 13 January 2017, approximately 20% increase over the current price while the price of steel grade of coal and direct feed coal has been linked to price of washed coking coal which has been fixed on import parity price.
The increase in price is done by subsuming the washery recovery charge (WRC), whIch was being charged separately keeping in view the observation of ADRM. Due to this revision, CIL will earn approximately additional revenue of Rs 702 crore for the balance period of financial year 2016-2017 i.e. from 13 January 2017 to 31 March 2017 and additional revenue of Rs 2986 crore (approximately) for financial year 2017-2018 on achieving the targeted production and despatch programme.
Axis Bank rose 0.8%. The bank announced the cut in Marginal Cost of Funds based Lending Rates (MCLR) by 65-70 basis points across the various tenures. The announcement was made after market hours on Friday, 13 January 2017.
Auto stocks were mixed. Mahindra & Mahindra (M&M) (up 0.23%), Ashok Leyland (up 0.47%), and Tata Motors (up 1.71%) gained. Eicher Motors (down 1.59%), Bajaj Auto (down 0.13%), Hero MotoCorp (down 0.02%), and TVS Motor Company (down 0.61%) declined.
Maruti Suzuki India declined 0.46%. The company launched the much awaited premium urban compact vehicle for the millennials, IGNIS. The announcement was made after market hours on Friday, 13 January 2017. The price of the vehicle ranges from Rs 4.59 lakh to Rs 7.80 lakh ex-showroom Delhi across the different variants.
Meanwhile, the automobile industry is reportedly looking forward to a harmonised duty regime under Goods & Services Tax (GST). As of now, the sector has to deal with multiple excise and other tax levies, which is inconvenient and introduces several inefficiencies. This is the primary expectation of India's vehicle makers in the Budget 2017-18.
Reduction in corporate and individual taxes, increased spending on infrastructure and research and development (R&D), incentives for using alternative fuel, introducing laws for mandatory replacement of old vehicles and incentives for fleet modernisation are some of the expectations of auto industry from the upcoming Union Budget.
Precision Camshafts rose 2.49% after the company said that the company had on 13 January 2017 received Rs 62 crore towards redemption of its investment in preference shares of Cams Technology along with related dividend of Rs 2.41 crore. The announcement was made on Saturday, 14 January 2017.
SPML Infra surged 12.37% after the company said that it has secured three new orders worth Rs 800 crore. The announcement was made during market hours today, 16 January 2017. SPML Infra said it has received several new orders for power substation, rooftop solar power plant, water and wastewater treatment, and municipal solid waste management projects from different states in India.
On the macro front, data showed during market hours today, 16 January 2017 that inflation based on wholesale price index (WPI) rose 3.39% in December 2016 from 3.15% in November 2016. Build up inflation rate in the financial year so far was 4.28% compared to a build up rate of 0.4% in the corresponding period of the previous year.
Another data showed after market hours on Friday, 13 January 2017 that India's exports rose 5.72% to $23.88 billion and imports rose 0.46% to $34.25 billion in December 2016 over December 2015. The trade deficit declined 9.9% to $10.37 billion in December 2016 over December 2015.
Overseas, Asian stocks dropped after the British pound plunged more than 1% on fears of hard exit by UK from the European Union, which Britain voted to leave last June. In Hong Kong, the Hang Seng Index was down 0.91%, while China's Shanghai Composite Index plunged 0.74%. UK Prime Minister Theresa May will reportedly address a speech tomorrow, 17 January 2017, in which many investors believe she could spell out an end to her country's participation in European Union's single market. May is also expected to elaborate on the UK's negotiation priorities in a speech.
US stocks rose moderately on Friday, 13 January 2017, on the back of quarterly earnings from some of the country's biggest banks, as the Nasdaq Composite index closed at a record high. Markets have been in an updraft since November's presidential election, with the bulk of the gains coming from the financial sector, as investors have bet banks would benefit from deregulation under President-elect Donald Trump's coming administration and an environment that is expected to see rising interest rates. US financial markets will be closed today, 16 January 2017, for Martin Luther King Jr. Day.
In the latest economic data, US retail sales rose 0.6% in December, less than had been expected, while holiday sales were up a better-than-expected 4%.
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