Markets move into green on value buying in power and oil & gas

Indian markets coming off their early volatility have slightly crept into green and the major benchmarks were trading with modest gains supported by some lower level buying and positive cues from the Asian markets. However, the cautiousness persisted with the domestic currency after a day of recovery once again showing a declining trend on month-end demand for the American currency from importers. Most of the sectoral indices were trading in green led by the power and utilities sector stock that led the markets higher.

The banking stocks though still remained under pressure after the central bank ordered banks to temporarily boost cash deposits with it in a bid to absorb excess liquidity generated by a government ban on larger notes. RBI in a surprise move raised CRR to 100 percent on incremental deposits growth from September 26 to be reviewed periodically. The CRR hike will reduce the market liquidity considerably and lowers the chances of any rate cut by the RBI in its upcoming policy review. The broader markets were holding firm and were in a comparatively better position than the benchmarks.

The BSE Sensex is currently trading at 26383.71, up by 67.37 points or 0.26% after trading in a range of 26183.22 and 26385.25. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.92%, while Small cap index gained 1.01%.

The top gaining sectoral indices on the BSE were Power up by 1.80%, Oil & Gas up by 1.55%, PSU up by 0.94%, Auto up by 0.93%, Realty up by 0.81%, while Bankex down by 0.66%, Consumer Durables down by 0.47%, IT down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid Corpn. up by 3.44%, Bharti Airtel up by 2.81%, Hero MotoCorp up by 2.07%, NTPC up by 1.61% and Cipla up by 1.53%. On the flip side, SBI down by 1.80%, ICICI Bank down by 1.75%, Wipro down by 1.09%, HDFC down by 1.08% and TCS down by 0.96% were the top losers.

Meanwhile, reacting for the first time after the demonetization move was announced by the Prime Minister, the Reserve Bank of India (RBI) governor Urjit Patel has said that central bank is monitoring situation arising out of the decision to withdraw Rs 500/1,000 notes and taking all the required decisions to normalize the situation as soon as possible in order to ease genuine pain of honest citizens, who have been hurt by the move.

He has said that liquidity in the banking system has increased as the printing presses have started to re-balance the production towards Rs.100 and Rs. 500 notes to make them available to meet demand. But he also advised the people to start using cash alternatives like debit cards and digital wallets to make transactions cheaper and easier. Therefore, in the long term, it will help India to jump into a less cash-use economy at par with more developed nations. He also advised banks to make a big push with Point of Sale (PoS) machines with traders so that debit card use becomes more prevalent.

RBI governor added that about 40-50,000 people were deployed to refit the ATMs. Currency is available and banks are working in a mission mode to lift currency and take them to their branches and ATMs. Patel also said the central bank has announced an incremental CRR (Cash Reserve Ratio) of 100 per cent because of the large increase in deposits of banks on account of the return of Rs 1,000 and Rs 500 notes and the decision would be reviewed immediately once the government issues adequate quantum of MSS (Market Stablisation Scheme) bonds which they have promised to do.

The CNX Nifty is currently trading at 8133.25, up by 18.95 points or 0.23% after trading in a range of 8066.50 and 8136.25. There were 36 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Power Grid Corpn. up by 3.02%, BPCL up by 2.97%, Idea Cellular up by 2.92%, Bharti Airtel up by 2.87% and Hero MotoCorp up by 2.29%. On the flip side, Bank Of Baroda down by 2.14%, ICICI Bank down by 1.85%, SBI down by 1.80%, Wipro down by 1.29% and TCS down by 0.97% were the top losers.

Most of the Asian markets were trading in green, FTSE Bursa Malaysia KLCI was up by 0.93 points or 0.06% to 1,628.19, KOSPI Index gained 7.06 points or 0.36% to 1,981.52, Shanghai Composite was higher by 20.85 points or 0.64% to 3,282.79, Taiwan Weighted gained 63.17 points or 0.69% to 9,222.24 and Hang Seng surged by 196.15 points or 0.86% to 22,919.60.

On the other hand, Nikkei 225 was down by 24.33 points or 0.13% to 18,356.89 and Jakarta Composite declined by 11.83 points or 0.23% to 5,110.27.