Benchmarks trade with traction in early deals; Sensex reclaims 26,300 mark

Indian equity benchmarks have made a positive start and are trading in fine fettle with frontline gauges recapturing their crucial 26,300 (Sensex) and 8,050 (Nifty) levels in early deals on Wednesday, tracking positive global cues. Traders are taking some support with Prime Minister’s meeting with economists and experts, to take stock of the economy and get feedback on ways to deal with the problem of cash crunch post demonetisation. Reportedly 4-5 sectoral groups have been set up to discuss new initiatives and Budget proposals. Market participants overlooked reports that foreign portfolio investors (FPIs) have pulled out close to $10 billion, or almost Rs 68,000 crore, from the country's debt and equity markets since November 8, in one of the largest selloffs in a two-month period since 2013.

On the global front, Asian markets were trading mostly in green at this point of time. The Japanese market was marginally in green in a thin volume trade. The US markets despite coming off the day’s high managed a positive close in last session and the tech-heavy Nasdaq surged to a new record closing high, after the Conference Board reported a continued improvement in consumer confidence in the month of December.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. The market breadth remained in favor of advances, as there were 1,372 shares on the gaining side against 349 shares on the losing side while 69 shares remain unchanged.

The BSE Sensex is currently trading at 26333.02, up by 119.58 points or 0.46% after trading in a range of 26216.54 and 26345.30. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.02%, while Small cap index was up by 1.06%.

The top gaining sectoral indices on the BSE were TECK up by 0.95%, IT up by 0.86%, Auto up by 0.71%, PSU up by 0.71% and FMCG was up by 0.68%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Cipla up by 1.64%, Wipro up by 1.48%, Dr. Reddys Lab up by 1.41%, Axis Bank up by 1.20% and Lupin was up by 1.19%. On the flip side, Tata Steel down by 0.57%, Power Grid down by 0.44% and Tata Motors was down by 0.19% were the top losers.

Meanwhile, Prime Minister Narendra Modi as chairman of government think-tank NITI Aayog attended a meeting of economists and experts to take stock of the economy and get feedback on ways to deal with the problem of cash crunch post demonetisation. At the meeting PM discussed a range of subjects including agriculture, job creation and skill development with a group of select economists and experts. Further, 4-5 sectoral groups have been set up to discuss new initiatives and Budget proposals.

Vice chairman of NITI Aayog, Arvind Panagariya said that farm sector experts suggested incentivising states to undertake market reforms, create corpus fund for promoting farm mechanisation and micro irrigation, and provide interest subvention for term loans, among others, to double farm income by 2022. Panagariya further said that another key theme under discussion was job creation and skill development. The economists present at the meeting urged that unorganised labour be brought into the formal economy. They also stressed on the need to make skill development more demand driven and increase the emphasis on apprenticeship.

The meeting assumes significance in view of various multilateral agencies and RBI lowering growth outlook for the current fiscal. RBI has reduced the forecast to 7.1 per cent from 7.6 per cent in its monetary policy review earlier this month. Also, Indian economy expanded by 7.1 per cent and 7.3 per cent in first and second quarters of 2016-17, respectively. The theme of the meeting was ‘Economic Policy Reform, Road Ahead’ and there are about 15 invitees for the conference. Further, the Prime Minister will also took stock of various initiatives of NITI Aayog to promote digital economy like Lucky Grahak Yojana and Digi Dhan Vyapaar Yojana to incentivise digital payments.

The meeting was attended by Finance Minister Arun Jaitley, Niti Aayog Vice Chairman Arvind Panagariya, and senior officers from the Union Government, among others. The economists and experts who were present included Pravin Krishna, Sukhpal Singh, Vijay Paul Sharma, Neelkanth Mishra, Surjit Bhalla, Pulak Ghosh, Govinda Rao, Madhav Chavan, N K Singh, Vivek Dehejia, Pramath Sinha, Sumit Bose and TN Ninan.

The CNX Nifty is currently trading at 8074.85, up by 42.00 points or 0.52% after trading in a range of 8033.25 and 8075.40. There were 46 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.31%, Zee Entertainment up by 1.63%, Idea Cellular up by 1.57%, Aurobindo Pharma up by 1.47% and Cipla was up by 1.45%. On the flip side, Tata Steel down by 0.61%, Power Grid down by 0.41%, Tata Motors - DVR down by 0.35%, Tata Motors down by 0.25% and Reliance Industries was down by 0.09% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 6.32 points or 0.39% to 1,626.00, Nikkei 225 rose 31.08 points or 0.16% to 19,434.14, Taiwan Weighted added 89.25 points or 0.98% to 9,198.85 and Jakarta Composite was up by 93.31 points or 1.83% to 5,196.27.

On the flip side, KOSPI Index decreased 14.22 points or 0.7% to 2,027.95, Shanghai Composite slipped 8.42 points or 0.27% to 3,106.24 and Hang Seng was down by 6.71 points or 0.03% to 21,568.05.