Markets continue to trade firm in early noon session

Indian equity benchmarks continued to trade firm in early noon session on account of sustained buying by funds and retail investors in the frontline blue chip counters amid firm cues from the Asian markets. Sentiments remained upbeat with the global rating agency Fitch in its Global Economic outlook stating that India’s economic growth will accelerate to 8 percent by 2018-19 fiscal as gradual implementation of structural reforms will contribute to higher growth. Besides, sustained foreign fund inflows, forecast of a better-than-average monsoon, expectations of further economic reforms in the third year of the Modi government and an appreciating rupee against the dollar, too maintained the uptrend in the markets. 

In scrip specific development, share of Gujarat Alkalies and Chemicals surged over 9% after the company reported more than doubled EBITD (earnings before interest taxes and depreciation) at Rs 133 crore for the quarter ended March 2016 (Q4FY16) against Rs 52 crore in a year ago quarter. Finolex Cables rallied over 9% after the company reported a robust 77% year on year (YoY) growth in net profit at Rs 83 crore, on back of strong operational performance.

On the global front, Asian markets were trading higher after U.S. data continued to cast the economy in a positive light, while the dollar was on the defensive against major peers. Back home, broader markets were trading in-line with the benchmark indices- BSE Mid Cap and Small Cap indices are trading up by 1.28% and 0.60% respectively.

The BSE Sensex is currently trading at 26532.69, up by 166.01 points or 0.63% after trading in a range of 26405.28 and 26585.76. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.28%, while Small cap index up by 0.60%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.79%, Realty up by 1.59%, PSU up by 1.17%, TECK up by 0.83% and IT up by 0.76%, while FMCG down by 0.15% and Capital Goods down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.11%, Adani Ports &Special up by 3.63%, Lupin up by 2.44%, ICICI Bank up by 1.99% and Reliance Industries up by 1.83%. On the flip side, Larsen & Toubro down by 0.85%, ITC down by 0.84%, Axis Bank down by 0.76%, ONGC down by 0.67% and NTPC down by 0.53% were the top losers.

Meanwhile, on the eve of Modi government completing two years in office, Reserve Bank of India (RBI) governor Raghuram Rajan has said that Modi government’s reforms have led to macro stability in the country. He elaborated that while the eyes of the world have been on the Goods and Services Tax (GST) bill, a host of other significant reforms have been taking place in India, leading to macro-economic stability. 

Rajan said that the government has embarked on ambitious structural reforms to revive growth, including significant efforts in the agricultural sector to boost productivity through irrigation, insurance, and access to markets, a strong push to deregulate business, especially for startups, important efforts to improve the governance of public sector banks and to resolve distress in power distribution companies, and an immense effort to expand financial services to the excluded through the provision of bank accounts and direct benefit transfers.

The RBI governor stressed that there is no substitute for good policy and said that the government and the RBI had contained inflation through a combination of better food management, a new inflation framework and calibrated monetary policies and, of course, the good luck of lower energy prices.

Rajan speaking at SaarcFinance, a symposium of central bank governors, on 'Impact of Chinese slowdown on Saarc region and policy options', termed a sharp slowdown in China as a “significant risk” for the global economy and the South Asian Association for Regional Cooperation (Saarc) region in particular. He also said that India’s swap arrangement with a number of Saarc countries had been drawn on by some to alleviate short-term foreign exchange needs, and had hopefully been helpful.

The CNX Nifty is currently trading at 8127.40, up by 57.75 points or 0.72% after trading in a range of 8077.05 and 8141.30. There were 40 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were BPCL up by 8.99%, Sun Pharma up by 4.27%, Adani Ports &Special up by 3.57%, Aurobindo Pharma up by 2.62% and Lupin up by 2.45%. On the flip side, ITC down by 1.05%, Larsen & Toubro down by 0.89%, Tech Mahindra down by 0.79%, NTPC down by 0.78% and Axis Bank down by 0.77% were the top losers.

Asian markets were trading higher; Shanghai Composite increased 0.83 points or 0.03% to 2,823.28, FTSE Bursa Malaysia KLCI increased 1.94 points or 0.12% to 1,633.03, Jakarta Composite increased 7.96 points or 0.17% to 4,792.53, KOSPI Index increased 12.11 points or 0.62% to 1,969.17, Nikkei 225 increased 62.38 points or 0.37% to 16,834.84, Taiwan Weighted increased 69.49 points or 0.83% to 8,463.61 and Hang Seng increased 176.86 points or 0.87% to 20,573.97.