Markets continue to trade in green in noon session

Benchmark equity indices continued to trade in green in noon session led by gains in frontline blue chip stocks such as Tata Motors, Wipro, ITC and Reliance Industries among others. 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. Though, investors preferred to remain on sidelines ahead of 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 demonetise high value currency notes that month. In scrip specific development, Sun Pharmaceutical Industries rose around five percent after the company signed an exclusive global licensing deal with Moebius Medical to develop novel liposomal non-opiod pain product for osteoarthritis.

On the global front, Asian markets were trading mixed, as investors awaited the looming outcome of the Federal Reserve’s rates review, with all eyes on how the Fed steers monetary policy in the wake of Republican Donald Trump’s surprise election win last month. Back home, the BSE Sensex is currently trading at 26605.08, up by 89.84 points or 0.34% after trading in a range of 26494.23 and 26611.81. There were 19 stocks advancing against 11 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 was up by 0.11%.

The top gaining sectoral indices on the BSE were Auto up by 0.99%, Consumer Durables up by 0.71%, Oil & Gas up by 0.53%, FMCG up by 0.49% and Capital Goods up by 0.16%, while Metal down by 0.82%, Realty down by 0.62%, Bankex down by 0.06%, TECK down by 0.03% and IT down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.63%, Wipro up by 1.68%, ITC up by 1.10%, Reliance Industries up by 0.80% and Sun Pharma Inds. up by 0.70%. On the flip side, Lupin down by 1.28%, GAIL India down by 0.87%, Tata Steel down by 0.58%, NTPC down by 0.48% and TCS down by 0.36% were the top losers.

Meanwhile, the government is expected to amend the Reserve Bank of India Act to make old currency notes of Rs 500 and Rs 1000 invalid and reference to this effect would be made in the upcoming Union Budget. As part of the demonetisation process, there would be a law to cancel old high-value currency notes and it can be made effective from March 31.

The law to annul the validity came ahead in 1978, when the currency was banned and this time the government acted under RBI Act Section 26 (2). According to the section, the central government could declare that a banknote will no longer be used as legal tender by a notification in the Gazette of India.

Due to cancellation of old high-value currency notes, higher dividend from the RBI may not be applicable until the RBI law is amended. The central government expects Rs 13 lakh crore to come back in the banking system. Banks have reportedly received Rs 12 lakh crore demonetised currency notes as against Rs 15.5 lakh crore.

Recently, RBI Governor Urjit Patel had said that it would not have any automatic impact on the central bank’s balance sheet under the existing law. He also said that the withdrawal of legal tender characteristics status does not extinguish any of RBI’s balance sheet, therefore, there is no implication on the balance sheet as of now.

The CNX Nifty is currently trading at 8190.05, up by 19.25 points or 0.24% after trading in a range of 8155.80 and 8200.95. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.71%, Tata Motors - DVR up by 1.90%, Wipro up by 1.89%, BPCL up by 1.84% and Idea Cellular up by 1.79%. On the flip side, Hindalco down by 3.02%, Zee Entertainment down by 2.13%, Ultratech Cement down by 2.03%, Grasim Industries down by 1.83% and Lupin down by 1.30% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 2.08 points or 0.13% to 1,643.50, Taiwan Weighted gained 32.2 points or 0.34% to 9,382.14 and Nikkei 225 was up by 95.49 points or 0.5% to 19,250.52. On the flip side, Jakarta Composite decreased 40.81 points or 0.77% to 5,267.32 and Hang Seng declined 16.98 points or 0.08% to 22,416.04.