Markets continue to trade in green in early noon session

Indian equity benchmarks erased early gains but continue to trade in green in early noon session on account of buying by investors in the front line blue chips counters, supported by sustained foreign fund inflows and a firming trend at other Asian markets, tracking weekend gains at the US markets. Meanwhile, banking stocks were trading higher after RBI governor Raghuram Rajan commented that the headline fiscal deficit target for the next financial year (at 3.5 per cent) year is a comfort for the central bank has already hiked hopes of a rate cut. However, gains remained capped with the report that India's Index of Industrial Production (IIP) for January stood at -1.5 contracting for the third straight month weighed down by manufacturing data which dropped to -2.8% vs -2.4% month-on-months (MoM). Also, the April-January IIP data has slipped to 2.7% against 3.1% (YoY).

On the global front, Asian markets were trading higher, following a higher finish on the Wall Street amid stability in the crude oil prices. Back home, both the Sensex and Nifty were trading above their crucial 24,800 and 7,500 level, respectively. In scrip specific development, shares of Cupid were trading higher over 8% as the company has been awarded 3 years contract from UNFPA for manufacture and supply of Cupid Female Condoms. This is good opportunity for Cupid to participate in the UNFPA’s worldwide procurement program. Bhageria Industries was trading higher after the company won 30MW Solar Power Project from Solar Energy Corporation of India (A Government of India Enterprise). BIL will install 30 MW Solar Power Plant at Ahmednagar District, Maharashtra. The completion of project is expected in first quarter of 2017. BIL will execute complete project on Turnkey projects basis and will also operate and maintain the same plant for 25 years.

The BSE Sensex is currently trading at 24804.49, up by 86.50 points or 0.35% after trading in a range of 24797.89 and 24960.51. There were 21 stocks advancing against 8 stocks declining on the index while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index up by 0.50%.

The top gaining sectoral indices on the BSE were Bankex up by 0.84%, Auto up by 0.64%, FMCG up by 0.64%, IT up by 0.29% and Capital Goods up by 0.28%, while Metal down by 2.05%, PSU down by 0.80%, Realty down by 0.31%, Consumer Durables down by 0.18% and Power down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.37%, Tata Motors up by 2.99%, GAIL India up by 1.47%, Axis Bank up by 0.95% and ITC up by 0.89%. On the flip side, Coal India down by 6.68%, Bajaj Auto down by 0.92%, Bharti Airtel down by 0.70%, Wipro down by 0.50% and Dr. Reddys Lab down by 0.37% were the top losers.

Meanwhile, minister of State for Finance Jayant Sinha has said that in order to resolve non-performing assets (NPAs) of companies that are genuinely not able to repay their loans due to global slowdown or because of policy failures of the previous government, India needs appropriate policy intervention as well as process. He said that the country should have appropriate resolution process as well as appropriate policy interventions to ensure that NPAs due to such kinds of reasons go through an orderly workout and resolution process.

Reiterating that the government is committed to punish the wilful defaulters, Sinha said that there are some people who are wilful defaulters, who have engaged in illegal activity. As far as they are concerned, the full force of the law is being applied and all the investigative agencies are working to ensure that willful defaulters are brought to justice. The minister said that wilful defaulters and corporates which are unable to repay loans due to hits to their businesses owing to global slowdown should not be co-mingled and confuse one with the other.

Sinha further said that the government also has to see that people facing business challenges do not have to go through such problems again. Sinha said “We have to deal with structural issues, which is where the bankruptcy code becomes important so that we avoid these kinds of problems in the future as well”. He said that there isn't anything that is illegal or criminal done, those are classic business failures that happen because of the wrong business and financial strategies or external factors that made the project or business unviable.

The CNX Nifty is currently trading at 7538.20, up by 28.00 points or 0.37% after trading in a range of 7533.90 and 7583.70. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 3.30%, Tata Motors up by 3.20%, Ambuja Cement up by 2.14%, GAIL India up by 1.69% and Zee Entertainment up by 1.62%. On the flip side, Coal India down by 6.65%, Bajaj Auto down by 0.91%, Bharti Airtel down by 0.58%, Idea Cellular down by 0.49% and Kotak Mahindra Bank down by 0.37% were the top losers.

Asian markets were trading higher; KOSPI Index increased 0.86 points or 0.04% to 1,972.27, FTSE Bursa Malaysia KLCI increased 4.03 points or 0.24% to 1,700.57, Taiwan Weighted increased 41.76 points or 0.48% to 8,747.90, Jakarta Composite increased 45.34 points or 0.94% to 4,859.12, Shanghai Composite increased 76.3 points or 2.71% to 2,886.61, Hang Seng increased 250.93 points or 1.24% to 20,450.53 and Nikkei 225 increased 291.45 points or 1.72% to 17,230.32.