Markets continue to trade in fine fettle in early noon session

Indian equity bourses continue to trade notably higher in early noon session as investors remained busy in brisk buying in blue chip counters amid firm cues from the global markets. Sentiment remained upbeat with Economic Affairs Secretary Shaktikanta Das’ statement that the India is posed for a ‘big leap’ in growth which could touch 8 per cent in the current fiscal on the back of normal monsoon. Some support also came on report that the Cabinet has approved a proposal to revise up salaries and pensions for government employees. The panel had recommended an overall 23.6% increase in salaries and pension of all central government employees. Meanwhile, the Meteorological Department has predicted heavy rain for Nainital, Almora, Pauri, Dehradun and other places in Uttarakhand. Rains brought the temperature down by several notches in north India and led to a rise in water levels in major rivers of Uttar Pradesh. The southwest Monsoon has been vigorous over coastal Andhra Pradesh and active over Odisha, east Madhya Pradesh, Konkan and Goa, Chhattisgarh, Telangana and coastal Karnataka. Global cues too remained supportive with all the Asian counters were trading in green terrain at this point of time amid rise in oil prices and hope that policy makers around the world will come up with stimulus measures to blunt the impact of the UK’s decision to leave the European Union.

The BSE Sensex is currently trading at 26624.94, up by 100.39 points or 0.38% after trading in a range of 26606.31 and 26700.77. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.73%, while Small cap index up by 1.04%.

The top gaining sectoral indices on the BSE were Realty up by 3.67%, Power up by 1.23%, Auto up by 1.21%, Metal up by 1.10% and Capital Goods up by 0.66%, while FMCG down by 0.30% was the lone losing index on the BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.43%, NTPC up by 1.76%, Power Grid Corpn. up by 1.58%, Tata Motors up by 1.56% and Asian Paints up by 1.44%. On the flip side, ITC down by 0.83%, Hindustan Unilever down by 0.80%, Coal India down by 0.46%, HDFC Bank down by 0.39% and GAIL India down by 0.29% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in the thirteenth issue of its half yearly publication -Financial Stability Report (FSR)- June 2016,  has said that Indian economy stands out in terms of growth among other emerging markets and the country’s financial system remains stable, though banking sector is facing significant challenges. India stands out amongst its peers in terms of growth, being a net commodity importer and with efforts to improve the ease of doing business.

The report said that as global uncertainties and transiting geopolitical risks impact India, continuation of sound domestic policies and structural reforms remains the key for macroeconomic stability.  The FSR has highlighted that business of scheduled commercial banks (SCBs) slowed significantly during 2015-16. The gross non-performing advances (GNPAs) ratio increased sharply to 7.6 per cent from 5.1 per cent between September 2015 and March 2016, largely reflecting reclassification of restructured standard advances as non-performing due to asset quality review (AQR). The restructured standard advances ratio declined but with a marginal increase in the overall stressed advances ratio from 11.3 per cent in September 2015 to 11.5 per cent in March 2016.

The report further said that among other financial institutions, the asset quality of both scheduled urban co-operative banks (SUCBs) as well as non-banking financial companies (NBFCs) has improved. The performance of NBFC sector in general is relatively better than that of PSBs.

The report though cautioned about the downside of extended low oil prices since the third quarter of fiscal 2015 and added that it has provided terms of trade benefit leading to relatively lower imports and reduced external vulnerabilities. It said that India needs to be alert to the risks of commodity price cycle reversals and the economy's vigilance to readjust. FSR said the downside of prolonged low oil prices also needs to be reckoned in terms of likely reduction in private transfers and remittances.

RBI Governor Raghuram Rajan, stressing on the need to continue with sound domestic policies and reforms, said that the banks’ asset quality stress had to be dealt first in order to revive the credit growth. He added that the country needs to deal with legacy issues that hold back growth and bring changes to enhance the efficacy of our business processes and conduct.

The CNX Nifty is currently trading at 8164.15, up by 36.30 points or 0.45% after trading in a range of 8157.65 and 8186.55. There were 42 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Bosch up by 4.48%, Hero MotoCorp up by 2.77%, Hindalco up by 2.08%, NTPC up by 1.82% and Power Grid up by 1.70%. On the flip side, ITC down by 0.87%, Hindustan Unilever down by 0.77%, Coal India down by 0.64%, Ultratech Cement down by 0.59% and HCL Tech. down by 0.55% were the top losers.

Asian markets were trading higher; FTSE Bursa Malaysia KLCI gained 6.81 points or 0.42% to 1,640.85, Shanghai Composite rose 13.79 points or 0.47% to 2,926.35. KOSPI Index surged 20.14 points or 1.04% to 1,956.36, Jakarta Composite jumped 68.02 points or 1.39% to 4,950.19, Taiwan Weighted increased 81.05 points or 0.95% to 8,586.56, Hang Seng added 153.6 points or 0.76% to 20,326.06 and Nikkei 225 was up by 244.79 points or 1.6% to 15,567.93.