Benchmarks continue to trade in narrow range with positive bias

Indian equity benchmarks are trading marginally in green in early noon session, as investors got some encouragement with the report of global rating agency Fitch stating that India will continue to post good growth despite subdued prospect for the Asia Pacific region amid an expected rise in US rates, dollar strength and lower commodity prices. Meanwhile, fast moving consumer goods shares were among the top gainers, shrugging off the rise in consumer price inflation which hit a 5-month of 5.41% in November. In scrip specific development, share of Sun Pharma was trading higher after the company’s subsidiaries entered into an agreement with Nostrum Laboratories for sale of the Bryan (Ohio) unit in the US.
 
On the global front, Asian markets were trading mostly in green; as jittery investors took cues from gains on Wall Street and a rebound in oil prices, but volatility remains high ahead of Federal Reserve and Bank of Japan policy meetings. Back home, traders were seen piling position in FMCG , Consumer Durables, Realty and Oil & Gas stocks, while selling was witnessed in Bankex, Capital Goods, Power, Metal and TECK sector stocks. The market breadth on BSE was positive, out of 2334 stocks traded, 1249 stocks advanced, while 928 stocks declined on the BSE.

The BSE Sensex is currently trading at 25156.40, up by 6.05 points or 0.02% after trading in a range of 25075.54 and 25190.12. There were 13 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index up by 0.33%.

The top gaining sectoral indices on the BSE were Realty up by 0.66%, Consumer Durables up by 0.58%, FMCG up by 0.53%, Oil & Gas up by 0.33% and Auto up by 0.17%, while Bankex down by 0.31%, Metal down by 0.27%, TECK down by 0.20%, Capital Goods down by 0.19% and Power down by 0.17% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.22%, Sun Pharma Inds. up by 1.20%, Reliance Industries up by 1.14%, ONGC up by 1.08% and Lupin up by 0.78%. On the flip side, Vedanta down by 1.48%, ICICI Bank down by 1.39%, NTPC down by 1.36%, Wipro down by 1.02% and Hindalco down by 1.02% were the top losers.

Meanwhile, depending on the improvements in performance and efficiency, the finance ministry will infuse Rs 5,000 crore in public sector banks (PSBs) to boost their capital. In total eight lenders are expected to benefit from this last round of capitallisation in the ongoing fiscal year, including Vijaya Bank, Indian Bank and Syndicate Bank. Finance Ministry stated that “We are committed to support PSBs but the onus is on them to improve their profitability and return on assets (RoA), which will be the key factors before allocating any further amount.”

The other parameters on which banks will be assessed include bad loans and growth in low-cost deposits. The finance ministry has also identified six banks - Bank of India, IDBI, Indian Overseas Bank, Bank of Maharashtra, UCO Bank, and United Bank of India which require special focus to arrest bad loans.

Parliament's nod was sought for additional spending of Rs 56,256 crore in the second supplementary demand for grants, largely to cover excess expenditure on defence pensions and the Swachh Bharat Abhiyan.

The government allocated Rs 25,000 crore for bank capitalization in FY16, from the initial budgetary allocation of Rs 7,940 crore. Of this, Rs 20,000 crore has been infused and Rs 5,000 crore was to be provided in the second supplementary this year. However, it did not seek any funds toward bank capitalisation in the second batch of supplementary demands for FY16. State Bank of India, the country's biggest lender, was the biggest beneficiary in the first round of capitalisation for this fiscal with an allocation of Rs 5,531 crore.

In August, the government announced Rs 70,000 crore capitalization plan for state run banks over four years under its seven pronged Indradhanush revamp initiative. As per finance ministry data, the gross non-performing assets (NPAs) of Bank of India have almost doubled to Rs 29,894 crore since September 2014.

The CNX Nifty is currently trading at 7645.60, down by 4.45 points or 0.06% after trading in a range of 7625.10 and 7663.95. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.22%, ONGC up by 1.17%, Hindustan Unilever up by 1.11%, Sun Pharma up by 1.10% and Zee Entertainment up by 0.84%. On the flip side, Idea Cellular down by 3.74%, PNB down by 2.17%, NTPC down by 1.43%, Vedanta down by 1.42% and ICICI Bank down by 1.39% were the top losers.

Asian markets were trading mostly in green, Shanghai Composite increased 1.34 points or 0.04% to 3,522.01, Jakarta Composite increased 1.47 points or 0.03% to 4,375.66, KOSPI Index increased 3.72 points or 0.19% to 1,931.54, Hang Seng increased 30.96 points or 0.15% to 21,340.81 and Taiwan Weighted increased 53.64 points or 0.67% to 8,093.80, while Nikkei 225 decreased 283.73 points or 1.5% to 18,599.69 and FTSE Bursa Malaysia KLCI decreased 0.26 points or 0.02% to 1,629.70.