Indian equities sustain the jubilation in noon trades

Indian benchmarks are trading on a steady note on Thursday noon trades, maintaining the one percent gain on the back of widespread buying by participants tracking firm global cue in anticipation of the European Central Bank extending stimulus. The important psychological 8,200 (Nifty) and 26,500 (Sensex) levels were proving as strong supports for the frontline gauges as they stayed above those bastions, gyrating in a narrow range. Sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that demonetisation will boost growth in long run. The Finance Minister said the country will now have a cleaner economy, cleaner ethics and better GDP, he added that the economy, in the long term, is looking for a major change and policy makers now have a vision. Also, appreciation in rupee value against the dollar added to the optimistic sentiments. Indian rupee gained 19 paise to 67.44 against the dollar on Thursday on sustained selling of the US currency by exporters and banks amid foreign fund inflows. The foreign institutional investors which resorted to selling after Trump's win also reversed their trend in past few sessions. In last two trading sessions the foreign institutional investors bought shares worth Rs 356 crore. Some support also came with S&P Global Ratings’ statement that India with a large domestic economy will be less affected by the changes in growth and monetary policy in the new set-up under Donald Trump administration. Although Reserve Bank of India keeping the key rates unchanged at Wednesday's policy review, many investors are hoping a rate cut going ahead. Further, the RBI's decision to withdraw the incremental Cash Reserve Ratio requirement will help to improve liquidity in the economy.

On the global front, Asian markets were trading higher on Thursday, following the record gains overnight on Wall Street and on expectations that the European Central Bank will extend its asset purchase program at its monetary policy meeting later in the day. Also, risk appetites got an added boost when China reported upbeat trade figures with exports and imports both beating forecasts. Japan's Nikkei gained over a percent, brushing off a disappointing downward revision to economic growth for the third quarter.

Back home, all BSE sectoral indices were trading in the green. Among them, Metal index gained the most by 3.07 per cent, followed by Auto 2.20 per cent, Consumer Durables 1.85 per cent and IT 1.32 per cent. In scrip specific development, Tata Motors surged after the company’s subsidiary -- Jaguar Land Rover (JLR) has reported its best ever November retail sales of 47,588 vehicles, up 2% compared to November 2015. On the other hand, Divi’s Laboratories has dipped after the company said the US Food and Drug Administration (USFDA) issued form 483 with five observations against its unit at Visakhapatnam of Andhra Pradesh.

The market breadth remained optimistic as there were 1743 shares on the gaining side against 508 shares on the losing side, while 121 shares remained unchanged.

The BSE Sensex is currently trading at 26584.56, up by 347.69 points or 1.33% after trading in a range of 26357.35 and 26636.42. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.21%, while Small cap index up by 1.26%.

The top gaining sectoral indices on the BSE were Metal up by 3.07%, Auto up by 2.20%, Consumer Durables up by 1.85%, IT up by 1.32% and FMCG up by 1.29%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 4.47%, Tata Motors up by 3.55%, Adani Ports &Special up by 2.56%, Maruti Suzuki up by 2.31% and Coal India up by 2.22%. On the flip side, NTPC down by 0.74% and Dr. Reddy’s Lab down by 0.36% were the top losers.

Meanwhile, dousing all fears of growth derailment, Finance Minister Arun Jaitley has said that the government’s surprise move to withdraw high-denomination bank notes of Rs 500 and Rs 1,000 may create a disruption in the short term but in the long run will lead to a cleaner economy and better GDP growth as banks will have more funds to lend. 

Jaitley stated that after government’s decision to withdraw high-denomination bank notes there was a shortage of cash in the system. Therefore, Reserve Bank of India released certain amounts of currency and the shortage was also being made up by people doing more digital transactions. He also noted India will move digital in these 2-3 months. He added that they will achieve far more than what they have achieved in the past few decades.

The Minister also said that the pain had been factored in when the decision was taken to ban 500 and 1000 rupee notes to eliminate corruption and black money and added that Prime Minister had the broad shoulder to face the consequence of this and a decision of this kind carries the pain in transition which is regrettable but which was also factored in. He added that the PM had an option of doing which many other had done look the other way. 

He further said that the surprise move would fetch more money into the banking system and the capacity of banks to support the economy would go up. Low-cost funds would be available with banks. He added that more transactions coming into the banking system means more transactions coming into the taxation system.

The CNX Nifty is currently trading at 8207.90, up by 105.85 points or 1.31% after trading in a range of 8151.75 and 8225.50. There were 46 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.38%, Tata Motors - DVR up by 4.04%, Tata Motors up by 3.50%, Bosch up by 3.32% and Hindalco up by 3.20%. On the flip side, Bharti Infratel down by 1.72%, NTPC down by 0.77%, Aurobindo Pharma down by 0.51%, Eicher Motors down by 0.40% and Dr. Reddy’s Lab down by 0.34% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI gained 0.32%, Jakarta Composite rose 0.22%, KOSPI Index surged 1.37%, Taiwan Weighted strengthened 1.21%, Hang Seng added 0.63%, Nikkei 225 surged 1.41% and Shanghai Composite was up by 0.05%.