Benchmarks trade slightly in green on firm global cues

Indian equity benchmarks have made a positive start and are trading slightly in green amid firm global cues. Sentiments also remained up-beat with Finance Minister Arun Jaitley's statement that the government would offer tax incentives to small businesses engaged in cashless transactions, as part of the government's fight against the cash economy. He said the move would enable businesses with annual turnover of Rs 2 crore to save up to 30 per cent in tax payments. However, gains remained capped on report that foreign Institutional Investors (FIIs) continued their relentless sell-offs and sold domestic equities worth Rs 535.77 crore on December 20.

On the global front, Asian markets were trading mostly in green after the US dollar encamped near 14-year peaks on as global yield spreads moved inexorably in its favour, while a falling yen lifted Japanese shares to a one-year top. The US markets extended the gains, despite a lack of major catalysts amid another quiet day on the U.S. economic front.

Back home, Buying in banking counters too aided sentiments as the Reserve Bank of India has urged the Finance Minister Arun Jaitley to allow banks to get full tax deduction on the provisions made towards bad debts. Railways stocks too remained in focus, as the Finance Minister indicated that the Railways must shift its focus from populism to performance and called for a transparent accounting system for Railways and outsourcing some of its non-core functions such as hospitality services.

The BSE Sensex is currently trading at 26345.85, up by 37.87 points or 0.14% after trading in a range of 26296.26 and 26394.14. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.16%, while Small cap index up by 0.30%.

The top gaining sectoral indices on the BSE were Realty up by 0.80%, Metal up by 0.75%, Power up by 0.47%, Bankex up by 0.40% and PSU up by 0.27%, while Oil & Gas down by 0.38%, FMCG down by 0.26%, Consumer Durables down by 0.14%, Energy down by 0.03% and Industrials down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.05%, SBI up by 0.86%, Axis Bank up by 0.73%, Tata Steel up by 0.69% and ICICI Bank up by 0.66%. On the flip side, GAIL India down by 0.90%, TCS down by 0.84%, ITC down by 0.65%, Tata Motors down by 0.52% and Sun Pharma down by 0.50% were the top losers.

Meanwhile, clearing the air around the rumors of cash shortage, Finance Minister Arun Jaitley has said that the Reserve Bank of India (RBI) has enough currency for circulation. He said there was full preparedness to deal with currency shortages post demonetization and added that taking advance printing and current printing together, the RBI has been maintaining the money stock and even today, the RBI has more than adequate stock, not only to last them till December 30, but to last them far beyond that.

Minister further said that there was not a single day when RBI had not released adequate currency to banks. There was a certain level of currency that was to be released and there was full preparedness for it. Talking about the currency in circulation, Jaitley said that the government was not releasing data regarding the currency in circulation due to the inaccuracy of double counting. The currency which got printed might have gone to Post Offices and from there to banks and again back to currency chests so there could be double counting and scope for inaccuracies, so they do not want to guess the figures.

Jaitley also said that post demonetisation payments through credit and debit cards and e-wallets have increased significantly and many industries have shown a growth in digital payments by 300-1,500 percent. Meanwhile, RBI deputy governor said that all ATMs have been recalibrated and economic affairs Secretary Shaktikanta Das assured that currency supply situation has improved considerably.

The CNX Nifty is currently trading at 8090.30, up by 7.90 points or 0.10% after trading in a range of 8075.85 and 8112.55. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.82%, Eicher Motors up by 1.44%, HDFC up by 1.22%, Ultratech Cement up by 1.16% and ACC up by 0.98%. On the flip side, BPCL down by 1.45%, Zee Entertainment down by 1.19%, GAIL India down by 1.16%, ITC down by 0.93% and TCS down by 0.83% were the top losers.

Asian markets were trading mostly in green; KOSPI Index gained 3.22 points or 0.16% to 2,045.16, Jakarta Composite rose 5.01 points or 0.1% to 5,167.49, Shanghai Composite increased 29.48 points or 0.95% to 3,132.36, Nikkei 225 added 38.86 points or 0.24% to 19,533.39 and Hang Seng was up by 139.31 points or 0.64% to 21,868.37.

On the flip side, Taiwan Weighted decreased 17.49 points or 0.19% to 9,227.32 and FTSE Bursa Malaysia KLCI was down by 1.28 points or 0.08% to 1,633.24.