Benchmarks continue to trade in green

Indian equity benchmarks added gains to trade firm, hovering near the highest point of the day in late morning session ahead of expiry of December series futures and options contracts. The rupee opened slightly higher against the dollar amid selling of the American currency by banks and exporters. PM Modi’s 50-day demonetisation drive ends tomorrow (December 30) and there are expectations of tax sops from the government to boost the economy. There will be concern that over 90 percent of junked notes are already deposited in banks, dimming the expectation that RBI will be able to give a substantial dividend to the government. Meanwhile, on Wednesday, foreign investors sold equities worth Rs 527.06 crore, domestic investors bought shares worth Rs 824.84 crore. Some support also crept on report that India Inc raised a whopping Rs 38,645 crore in November through private placement of corporate debt bonds, a surge of 57 percent from the year-ago level, for business expansion and propping up working capital requirements. The market may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. December 2016 series to next month i.e. January 2017 series. The near month December 2016 derivatives contracts will expire today i.e. December 29, 2016. Traders were seen piling position in Oil & Gas, Consumer Durables and PSU stocks, while selling was witnessed in FMCG sector stocks. In scrip specific development, IFCI was trading firm after the India’s biggest bourse National Stock Exchange (NSE) filed its draft prospectus for Rs 10,000-crore Initial Public Offer (IPO) of equity with the Securities and Exchange Board of India (SEBI).

On the global front, Asian shares were trading mostly in green, with Japan’s Nikkei down as the yen firmed and Toshiba Corp dived after news of potential massive write-downs led to a downgrade of its credit ratings. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,050 and 26,200 levels respectively. The market breadth on BSE was positive in the ratio of 1375:597, while 119 scrips remained unchanged.

The BSE Sensex is currently trading at 26254.14, up by 43.46 points or 0.17% after trading in a range of 26166.67 and 26429.63. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.72%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.17%, Consumer Durables up by 1.05%, PSU up by 0.85%, Metal up by 0.61% and Power up by 0.59%, while FMCG down by 0.25% was the sole losing index on BSE.

The top gainers on the Sensex were GAIL India up by 1.32%, ONGC up by 1.24%, Axis Bank up by 1.07%, TCS up by 0.93% and Tata Steel up by 0.89%.

On the flip side, Adani Ports & Special Economic Zone down by 1.60%, ITC down by 1.08%, Hero MotoCorp down by 0.56%, Coal India down by 0.51% and Larsen & Toubro down by 0.49% 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 8053.75, up by 18.90 points or 0.24% after trading in a range of 8020.80 and 8055.75. There were 37 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.93%, Grasim Industries up by 1.64%, Idea Cellular up by 1.54%, Ambuja Cement up by 1.32% and HCL Tech up by 1.23%.

On the flip side, Adani Ports & Special Economic Zone down by 1.82%, ITC down by 1.17%, Zee Entertainment down by 1.08%, Aurobindo Pharma down by 0.73% and Coal India down by 0.54% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 0.59 points or 0.03% to 2,025.08, FTSE Bursa Malaysia KLCI increased 3.31 points or 0.2% to 1,633.61, Shanghai Composite increased 4.1 points or 0.13% to 3,106.34 and Jakarta Composite increased 60.96 points or 1.17% to 5,270.40.

On the other hand, Nikkei 225 decreased 247.3 points or 1.27% to 19,154.42, Taiwan Weighted decreased 51.4 points or 0.56% to 9,150.00 and Hang Seng decreased 14 points or 0.06% to 21,740.74.