Markets continue to trade firm led by banking stocks

Indian equity benchmarks continue to trade firm in early noon session after the Reserve Bank of India (RBI) maintained status quo on key rates as widely expected by economists. The RBI has kept the repo rate unchanged at 6.5%, on back of higher food inflation and amid expectations of a rate action by the US Federal Reserve. The Cash Reserve Ratio (CRR) has also been kept unchanged at 4% in its monetary policy review. Sentiment got some support with the Global Retail Development Index (GRDI) report that India jumped 13 positions from last year to rank second among 30 developing countries this year on ease of doing business. The second rank is on the back of pick up in GDP growth and better clarity regarding FDI regulations. The report further said that India is now the world's fastest-growing major economy, overtaking China, and the retail demand is being fueled by urbanization, an expanding middle class, and more women entering the workforce. Further, some support also came in with private report that the economic growth of India is expected to accelerate to about 8.1 per cent in the current financial year on the back of better monsoon prospects and growth in consumption demand like cement, oil and electricity. Besides, a firm trend in other Asian markets following overnight gains at the US markets after Federal Reserve chief Janet Yellen statement that the economy was still in good shape and that any increase in borrowing costs would be slow and low, too bolstered traders sentiment.

On the global front, Asian markets were trading mostly higher, as some commodity prices climbed, though stocks in China faltered as investors awaited economic data about the country’s capital outflows. Back home, in scrip specific development, share of Prism Cement was trading higher after the company agreed to acquire 15.23% (post acquisition) equity stake for approximately Rs 21 crore in BLA Power, which is in the sole business of generating thermal power.

The BSE Sensex is currently trading at 26901.98, up by 124.53 points or 0.47% after trading in a range of 26829.53 and 26944.31. There were 23 stocks advancing against 6 stocks declining on the index, while one stock remained unchanged

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were FMCG up by 0.98%, Bankex up by 0.97%, Realty up by 0.72%, Metal up by 0.64%, PSU up by 0.61%, while they were no loser on the sectoral Index.

The top gainers on the Sensex were ICICI Bank up by 2.79%, SBI up by 2.26%, Hindustan Unilever up by 1.81%, Sun Pharma Inds. up by 1.10% and Mahindra & Mahindra up by 0.79%. On the flip side, Axis Bank down by 0.54%, Reliance Industries down by 0.36%, Dr. Reddys Lab down by 0.30%, HDFC down by 0.18% and Tata Motors down by 0.08% were the top losers.

Meanwhile, picking up pace, India has jumped 13 positions from the previous year and ranked second among the 30 developing nations this year with regards to the ease of doing business, according to a study of A.T. Kearney 2016 Global Retail Development Index (GRDI), which ranks top 30 developing countries for retail investment worldwide. China has retained the top slot for the second successive year. This year's list showed that India moved 13 positions from last year when it was ranked at 15th, below Malaysia, Brazil, Indonesia and Sri Lanka, among others.

According to GRDI report, an improvement in the growth of Gross Domestic Products (GDP) and enhanced clarity with regards to Foreign Direct Investment (FDI) regulations supported India to reach a second rank. The report further said that India has also become the world's fastest growing economy. That coupled with a large population base and the easing of FDI regulations in the sector has made it an even more attractive market.

The GRDI which analyses 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies to identify emerging market investment opportunities, highlighted that India's retail sector has expanded at a compound annual growth rate of 8.8 per cent between 2013 and 2015, with annual sales crossing the $1 trillion mark. India's retail sector has also benefited from the rapid growth in e-commerce. India is the world's second largest internet market and the increasing internet and smartphone penetration is contributing to the expansion of e-commerce.

However, it also cautioned that the bottlenecks in infrastructure such as complex regulations, labour laws, high rates of labour attrition, and restricted good quality retail space are still the areas of concern for retailer.

The CNX Nifty is currently trading at 8238.50, up by 37.45 points or 0.46% after trading in a range of 8216.40 and 8253.50. There were 38 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 2.77%, Ultratech Cement up by 2.28%, SBI up by 2.26%, Zee Entertainment up by 2.22% and Hindustan Unilever up by 1.75%. On the flip side, BPCL down by 0.82%, Bharti Infratel down by 0.63%, Aurobindo Pharma down by 0.57%, Eicher Motors down by 0.42% and Axis Bank down by 0.39% were the top losers.

Asian markets were trading mostly higher; FTSE Bursa Malaysia KLCI increased 9.82 points or 0.6% to 1,658.81, KOSPI Index increased 25.79 points or 1.3% to 2,011.63, Jakarta Composite increased 28.48 points or 0.58% to 4,924.50, Taiwan Weighted increased 82.79 points or 0.96% to 8,679.90, Nikkei 225 increased 95.42 points or 0.58% to 16,675.45 and Hang Seng increased 191.58 points or 0.91% to 21,221.80, while Shanghai Composite decreased 3 points or 0.1% to 2,931.09.