Benchmarks continue to hold their head above water

Indian benchmark equity indices were holding their head above water and trading up with modest gains, as investors preferred to remain on sidelines ahead of US Federal Reserve's meeting that begins later in the day for clues on the outlook for US monetary policy, while crude oil prices pulled back after their surge to 18-month highs. Investors are also eyeing the Consumer Price Index (CPI) data which is expected to cool down for the month of November, as the data accommodates the impact of the government’s decision to demonetize high value currency notes that month. The all-India general CPI inflation had dropped to 4.2% in October from 4.39% in the previous month.  Sentiments got some support with Central Board of Direct Taxes (CBDT) clarification that an increase in turnover of a business owing to its accepting digital means of payment will not trigger reopening of cases of past years.

On the global front, Asian markets are witnessing a mixed trend on Tuesday, tracking the lackluster cues overnight from Wall Street and on caution ahead of the US Federal Reserve's monetary policy announcement on Wednesday. The Fed is widely expected to increase interest rates by 25 basis points, reflecting the first rate hike in a year. The Fed has kept rates near zero since the 2008 global crisis but its leaders have indicated the U.S. economy is improving enough to start moving gradually toward normal policy. Further, Chinese stocks extended their declines, shrugging off better than expected retail sales and industrial data. Economic data for November showed relatively strong activity. Industrial production grew 6.2% from a year ago, up from October's 6.1%.

Back home, stocks from Auto, Consumer Durables and Oil & Gas counters were supporting the markets’ uptrend, while those from Metal, Teck and Realty counters were adding to the underlying cautious undertone. In scrip specific development, Sunteck Realty has surged after the company reported a consolidated net profit of Rs 96 crore for the quarter ended September 30, 2016, due to higher sales and other comprehensive income. Moreover, Rolta India rallied after the company reported 91.33% rise in its consolidated net profit at Rs 54.30 crore for the quarter ended September 30, 2016 as compared to Rs 28.38 crore for the same quarter in the previous year.

The market breadth remained optimistic as there were 1209 shares on the gaining side against 993 shares on the losing side, while 117 shares remained unchanged.

The BSE Sensex is currently trading at 26578.82, up by 63.58 points or 0.24% after trading in a range of 26494.23 and 26611.81. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.28%, while Small cap index up by 0.09%.

The top gaining sectoral indices on the BSE were Auto up by 0.89%, Consumer Durables up by 0.73%, Oil & Gas up by 0.67%, FMCG up by 0.40% and PSU up by 0.17%, while Metal down by 0.93%, TECK down by 0.31%, IT down by 0.30%, Realty down by 0.25% and Power down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.08%, Wipro up by 1.71%, ITC up by 1.05%, Reliance Industries up by 0.86% and Maruti Suzuki up by 0.86%. On the flip side, Lupin down by 1.28%, Tata Steel down by 0.94%, TCS down by 0.87%, GAIL India down by 0.70% and Asian Paints down by 0.69% were the top losers.

Meanwhile, in order to promote less-cash economy and in line with government’s announcement of incentivizing digital payment, from midnight of December 13, a discount of 0.75% will be offered for all those who purchase petrol and diesel through digital mode such as Debit/Credit Cards, Mobile Wallets and Prepaid Loyalty Cards.

Oil companies decided on the ‘cash back’ route after four days of talks with banks and wallet companies. They had also considered an upfront discount to those paying digitally, but this seemed difficult to implement. The oil companies would be bearing all the burden of the 0.75% discount and not sharing it with any bank or payment solutions provider.

Indian Oil Corp, the nation’s largest fuel retailer has said in a statement that discount will be credited to customer's account in the form of cash back within maximum three working days of the transaction. It further said that the discount will translate into a rebate of 49 paisa a litre on petrol and 41 paisa on diesel.

Recently, in a step ahead to achieve the government’s dream of a cashless society in the country, Finance Minister Arun Jaitley had unveiled slew of incentives that include discounts for payments made digitally for fuel, insurance, toll and rail travel, following government’s demonetization of Rs 500 and Rs 1000 notes in order to curb corruption. Nearly 4.5 crore customers buy petrol or diesel every day and collectively contribute about Rs 1,800 crore in transactions.

The CNX Nifty is currently trading at 8178.90, up by 8.10 points or 0.10% after trading in a range of 8155.80 and 8200.95. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.10%, BPCL up by 1.91%, Wipro up by 1.81%, Idea Cellular up by 1.59% and Tata Motors - DVR up by 1.30%. On the flip side, Hindalco down by 3.41%, Zee Entertainment down by 2.69%, Ultratech Cement down by 1.81%, Grasim Industries down by 1.66% and Lupin down by 1.42% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI gained 0.1%, KOSPI Index rose 0.27%, Nikkei 225 added 0.5% and Taiwan Weighted was up by 0.34%. On the flip side, Hang Seng decreased 0.25%, Jakarta Composite dropped 0.81% and Shanghai Composite was down by 0.25%.