Benchmarks continue to trade in green in late afternoon session

Indian equity benchmarks continued to trade in green in late afternoon session on the back of buying in Metal and Realty counters. Sentiments remained positive with Finance Minister Arun Jaitley’s statement that government will offer tax benefits to small scale business engaged in cashless transactions and the move would enable small businesses having annual turnover of Rs 2 crore will save up to 30 percent in tax payments. On the global front, European markets were trading mixed after German authorities admitted to the attacks in Berlin being a terrorist attack and the Islamic State claiming responsibility for the same. Asian markets were trading mostly in red.

Back home, Indian rupee was at 67.87, appreciated 0.18 paise against dollar as compared to its previous close, as investors shrugged off geopolitical tensions and turned their focus to the prospects of faster U.S. economic growth. In scrip specific development, Reliance Communications jumped over eight percent after the company signed a binding agreement with Brookfield Infrastructure and its institutional partners for the sale of its tower business. Super Crop Safe edged higher after receiving License from FSSAI.

The BSE Sensex is currently trading at 26368.60, up by 60.62 points or 0.23% after trading in a range of 26296.26 and 26394.14. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.13%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Realty up by 1.61%, Metal up by 0.91%, Power up by 0.86%, PSU up by 0.68% and Auto up by 0.43%, while FMCG down by 0.62% and Capital Goods down by 0.04% were the only losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.69%, NTPC up by 1.45%, Coal India up by 1.15%, Bajaj Auto up by 1.15% and HDFC up by 1.07%. On the flip side, Sun Pharma down by 1.63%, ITC down by 1.20%, TCS down by 0.76%, Tata Motors down by 0.62% and Larsen & Toubro down by 0.45% were the top losers.

Meanwhile, with an aim to recover from the effect of demonetization, the Reserve Bank of India in a pre-Budget meeting with Finance Minister Arun Jaitley  urged for full tax exemption on provisioning made for non-performing assets (NPAs) and the removal of service tax on digital transactions.It argued that such a facility of full tax deduction will shore up banks, which face challenges from demonetisation and sluggish loan recoveries in the ongoing third quarter.

Currently, banks and financial institutions are allowed deduction in respect of provision made for doubtful debts is only up to 7.5 percent of the total income. Thus, the RBI and some bankers sought to allow 100 percent deduction on bad debt provisioning in the upcoming Budget. PSU banks also sought higher capital infusion from the government saying they had not been able to carry out normal lending activity since demonetisation as their prime focus has been on exchanging notes and accepting old currency.

During the meeting, banks also pitched for extension of the additional 60-day window granted to them for recognition of a loan account as sub-standard. The RBI, on November 21, had temporarily relaxed prudential norms for banks and non-banking finance companies. They were given an additional 60 days beyond what is applicable to them for recognition of a loan account as sub-standard, thereby saving them the burden of provisioning. The relaxation in norms applied for dues payable between November 1 and December 31. Banks now want this facility extended even for dues payable beyond December 31.

The CNX Nifty is currently trading at 8097.15, up by 14.75 points or 0.18% after trading in a range of 8075.85 and 8112.55. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.88%, Mahindra & Mahindra up by 1.78%, Bosch up by 1.64%, Ultratech Cement up by 1.61% and NTPC up by 1.45%. On the flip side, Bharti Infratel down by 2.23%, Sun Pharma down by 1.58%, ITC down by 1.44%, Zee Entertainment down by 1.22% and TCS down by 0.84% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 50.04 points or 0.26% to 19,444.49, Taiwan Weighted decreased 38.15 points or 0.41% to 9,204.26, Jakarta Composite decreased 22.86 points or 0.44% to 5,139.62, KOSPI Index decreased 3.98 points or 0.19% to 2,037.96 and FTSE Bursa Malaysia KLCI decreased 1.81 points or 0.11% to 1,632.71. On the flip side, Shanghai Composite increased 34.55 points or 1.11% to 3,137.43 and Hang Seng increased 80.74 points or 0.37% to 21,809.80.

European markets were trading mixed; UK’s FTSE 100 increased 0.2 points to 7,044.16 and Germany’s DAX increased 3.79 points or 0.03% to 11,467.77, while France’s CAC decreased 8.71 points or 0.18% to 4,841.18.