Benchmarks continue firm trade in late afternoon session

Indian equity benchmarks continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters and taking cues from global counterparts. The sentiments were on optimistic note from early trade after global rating agency, Fitch Ratings stated that it expects India’s GDP growth to gradually accelerate to 7.7% in the current fiscal and 7.9% in FY18, a shade higher than the estimated 7.5% in the previous year on a back of higher real disposable income, assuming a normal monsoon after two years of below-average rainfall and a substantial wage increase for central government employees. Traders were seen piling position in Auto, Consumer Durables and Oil & Gas stocks while selling was witnessed in Metal, PSU and IT sector stocks. In scrip specific development, Nestle India was trading in green after the FMCG major stated that its popular Maggi noodles has cleared tests conducted by Central Food Technological Research Institute (CFTRI) under the directive of Supreme Court, reiterating that its instant noodles brand is safe for consumption. Indian markets will remain closed on Thursday on account of ‘Dr. Baba Saheb Ambedkar Jayanti’ holiday and on Friday on account of ‘Ram Navami’ holiday.

On the global front, the Asian markets were trading mostly in green while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,650 and 25,000 levels respectively. The market breadth on BSE was positive in the ratio of 1381:1066 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 25095.29, up by 73.13 points or 0.29% after trading in a range of 24996.44 and 25171.71. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.77%, while Small cap index up by 0.69%.

The gaining sectoral indices on the BSE were Auto up by 1.32%, Consumer Durables up by 0.95%, Oil & Gas up by 0.82%, Capital Goods up by 0.50%, Bankex up by 0.26% while, Metal down by 1.30%, PSU down by 0.16%, IT down by 0.08%, FMCG down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.77%, Hero MotoCorp up by 2.27%, Tata Motors up by 1.88%, ICICI Bank up by 1.69% and GAIL India up by 1.68%.

On the flip side, Coal India down by 2.23%, Tata Steel down by 1.75%, ITC down by 1.23%, HDFC Bank down by 0.78% and Wipro down by 0.49% were the top losers.

Meanwhile, in order to improve transmission of monetary policy actions, Finance Secretary Ratan Watal has said that the government is likely to revisit interest subvention schemes and replace them with back-end interest subsidies that do not interfere with marginal lending rates and yet have the same effect on loan repayments as interest subventions. Further, Watal said that the marginal distortions must be removed to ensure that the new system of setting marginal lending rates, started from April 1, is successful.

Currently, the government provides interest subventions on export credit, farm loans, housing and education loans. Interest subventions provide cheaper credit to a borrower up front, with the lender being compensated later by the government. A back-end subsidy involves direct payment of a subsidy at a later date to the borrower, who pays the market rate up front.

Watal said the decision to rationalize the small savings rate should be seen as a positive development that will help households get a ‘better deal’ on lending rates. In December 2015, a committee set up by the RBI on the Medium-term Path on Financial Inclusion had recommended phasing out the interest subvention scheme and ploughing the subsidy amount into a universal crop insurance scheme for small and marginal farmers.

The CNX Nifty is currently trading at 7692.70, up by 21.30 points or 0.28% after trading in a range of 7663.35 and 7717.00. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 2.63%, Hero MotoCorp up by 2.35%, Tata Motors - DVR up by 2.06%, Tata Motors up by 1.77% and Zee Entertainment up by 1.77%.

On the flip side, Coal India down by 2.10%, Tata Steel down by 1.75%, ITC down by 1.41%, Idea Cellular down by 1.39% and Tech Mahindra down by 1.19% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 10.95 points or 0.56% to 1,981.32, Jakarta Composite increased 31.32 points or 0.65% to 4,818.30, Hang Seng increased 63.63 points or 0.31% to 20,504.44 and Nikkei 225 increased 177.66 points or 1.13% to 15,928.79.

On the other hand, Taiwan Weighted decreased 31.41 points or 0.37% to 8,531.18, Shanghai Composite decreased 10.31 points or 0.34% to 3,023.65 and FTSE Bursa Malaysia KLCI decreased 1.59 points or 0.09% to 1,713.69.

The European markets were trading in red; UK’s FTSE 100 decreased 17.66 points or 0.28% to 6,182.46, Germany’s DAX decreased 48.81 points or 0.5% to 9,634.18 and France’s CAC decreased 40.01 points or 0.93% to 4,272.62.