Benchmarks make cautious start of the F&O series expiry session

Indian equity benchmarks have made a cautious start and are trading flat on F&O series expiry day amid weak global cues. Traders also remained concerned with report that over 90 percent of junked notes are already deposited in banks, dimming the expectation that Reserve Bank of India (RBI) will be able to give a substantial dividend to the government. Sentiments also remained dampened on report that foreign investors sold equities worth Rs 527.06 crore on December 28. However, traders took some support with report that the Cabinet Committee on Economic Affairs (CCEA) has approved the Road Connectivity Project for Left Wing Extremism (LWE) Affected Areas. Appreciation in Indian currency against dollar too aided sentiments. The rupee staged a mild recovery of 8 paise to 68.16 against the dollar at the forex market following fresh selling of the US currency by banks and exporters.

On the global front, Asian markets were trading mixed at this point of time, as the crude oil prices slipped after touching its highest level in more than a year overnight. Japanese market was leading the decliners as the yen climbed against the dollar. The US markets declined in last session and the tech-heavy Nasdaq pulled back from yesterday's record closing high, mainly on profit taking as some traders looked to cash in on the recent strength in the markets.

The BSE Sensex is currently trading at 26231.36, up by 20.68 points or 0.08% after trading in a range of 26166.67 and 26429.63. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.41%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.99%, IT up by 0.76%, PSU up by 0.60%, TECK up by 0.59% and Consumer Durables was up by 0.43%, while FMCG down by 0.36%, Auto down by 0.15%, Capital Goods was down by 0.10% were the few losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.00%, Axis Bank up by 0.92%, ONGC up by 0.82%, Infosys up by 0.67% and Asian Paints up by 0.60%. On the flip side, Adani Ports &Special down by 1.40%, ITC down by 1.04%, Hero MotoCorp down by 0.63%, Bajaj Auto down by 0.52% and Dr. Reddys Lab down by 0.47% were the top losers.

Meanwhile, in order to provide relief to people hit by demonetization, the Reserve Bank of India (RBI) has extended the grace period for banks, non-banking finance companies (NBFC) and microfinance companies to classify bad loans by 30 days in the case of agriculture and term loans of up to Rs 1 crore. As per RBI notification, it has been decided to provide 30 days, in addition to the 60 days provided on November 21, thus, borrowers together get 90 days breather from getting the account classified under non-performing asset (NPA) category.

According to the RBI, the relief will be applicable to running working capital accounts (OD/CC) or crop loans where the sanctioned limit is Rs 1 crore or less and term loans for business purposes - secured or otherwise - where the sanctioned amount is Rs 1 crore or less on the books of any bank or any NBFC, including a microfinance company. This will also include agriculture loans. Further, dues payable after January 1, 2017 will be covered by the instructions for the respective entities.

Recently, the RBI had given additional 60 days for repayment incentive of 3 percent interest subsidy to farmers who repay their crop loans due in Nov-Dec. The surprise announcement made by Prime Minister Narendra Modi on November 8, to scrap Rs 500 and 1,000 notes resulted in a cash crunch in the market leading to slowdown in business. As a result, the repayment capacity of the borrowers were impacted and there was fear of loan default rising.

The CNX Nifty is currently trading at 8044.75, up by 9.90 points or 0.12% after trading in a range of 8020.80 and 8055.10. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.05%, HCL Tech up by 1.62%, TCS up by 1.24%, Ambuja Cement up by 0.97% and Bharti Infratel up by 0.89%. On the flip side, Adani Ports &Special down by 1.68%, ITC down by 1.13%, Aurobindo Pharma down by 0.83%, Bajaj Auto down by 0.76% and Zee Entertainment down by 0.61% were the top losers.

Asian markets were trading mixed; KOSPI Index rose 0.29 points or 0.01% to 2,024.78, FTSE Bursa Malaysia KLCI increased 2.21 points or 0.14% to 1,632.51, Shanghai Composite gained 6.9 points or 0.22% to 3,109.14 and Jakarta Composite was up by 49.75 points or 0.95% to 5,259.19.

On the flip side, Nikkei 225 declined 281.82 points or 1.45% to 19,119.90, Hang Seng slipped 21.48 points or 0.1% to 21,733.26 and Taiwan Weighted was down by 10.28 points or 0.11% to 9,191.12.