Jubilation continues on Dalal Street in late morning session

Indian equity benchmarks extended their northward journey and were inching towards its crucial 27,700 (Sensex) and 8,600 (Nifty) levels amid a rebound in global markets after President-elect Donald Trump in his victory address promised fiscal stimulus and infrastructure spending to boost growth in the world's largest economy. Traders also took some encouragement with report that the Centre’s net tax kitty rose up to Rs 8.51 lakh crore between April and October 2016. Net direct tax collections jumped up 10.66 per cent to Rs 3.77 lakh crore in October, while direct tax mop-up was more robust and increased 26.7 per cent to Rs 4.85 lakh crore.

On the sectoral front, banking shares extended gains for the second straight day on the bourses after the Government of India declared on Monday that the five hundred and one thousand rupee notes will no longer be legal tender from midnight, November 8, 2016. Shares of metal space remained on buyers’ radar, after Donald Trump got elected as the 45th President of the United States, and said in his victory speech that he would embark on a project to rebuild infrastructure in the US. He also plans to double US economic growth.

The BSE Sensex is currently trading at 27682.97, up by 430.44 points or 1.58% after trading in a range of 27491.93 and 27729.37. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 2.14%, while Small cap index was up by 2.74%.

The top gaining sectoral indices on the BSE were Metal up by 5.30%, Realty up by 4.67%, Bankex up by 3.51%, Basic Materials up by 3.51% and PSU was up by 3.34%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 7.80%, SBI up by 7.22%, Cipla up by 6.09%, Adani Ports &Special up by 5.00% and ICICI Bank up by 4.39%. On the flip side, Asian Paints down by 2.23%, HDFC down by 0.64%, Infosys down by 0.57% and Wipro down by 0.12% were the top losers.

Meanwhile, the Information Technology (IT) trade body, the National Association of Software and Services Companies (NASSCOM) has said that the government’s recent decision to withdraw Rs 500 and Rs 1000 currency notes from circulation will accelerate the push towards electronic payments system, which currently has relatively little penetration in India. Nasscom President R Chandrashekhar said that if most of the black money is brought into bank accounts or into the tax net, there will be far less reason to deal only in cash and far more reasons to transact through electronic payments.

Nasscom said that this decision is a welcome move for the e-commerce industry, where a large number of deliveries in India are 'COD' or cash on delivery, raising logistics costs and risks. While other reasons for use of cash, such as trust, may take longer to alleviate, the present announcement could mitigate a significant factor driving COD, the availability of unaccounted cash. It further said that this move will be a major hollow to unaccounted or 'black money', rendering it as valueless unless it is deposited with the bank to it get exchanged, potentially bringing it into the tax net.

However, IT trade body pointed out that the replacement of not functioning old Rs 500 and Rs 1,000 notes with new high denomination notes in due course could be a ‘potential dampener’ as high value currency notes constitute the foundation of black money and the cash economy. It added that this historic step by the government could, if optimally leveraged, hugely accelerate the migration to a digital economy.

The CNX Nifty is currently trading at 8,578.40, up by 146.40 points or 1.74% after trading in a range of 8512.90 and 8592.00. There were 47 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 8.23%, Tata Steel up by 8.06%, SBI up by 7.12%, Hindalco up by 7.09% and Cipla up by 6.48%. On the flip side, Asian Paints down by 2.45%, Infosys down by 0.87%, HDFC down by 0.63% and Wipro down by 0.07% were the top losers.

All the Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 11.96 points or 0.73% to 1,659.58, Shanghai Composite gained 38.43 points or 1.23% to 3,166.80, KOSPI Index soared 40.26 points or 2.06% to 1,998.64, Jakarta Composite jumped 56.66 points or 1.05% to 5,470.98, Taiwan Weighted surged 221.55 points or 2.48% to 9,164.75, Hang Seng added 459.4 points or 2.05% to 22,874.59 and Nikkei 225 was up by 1119.58 points or 6.89% to 17,371.12.