Benchmarks trade jubilantly on last trading day of 2016

Indian equity benchmarks have made a positive start and are trading jubilantly in early deals on last trading day of the year 2016. Sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that the impact of demonetisation is clearly visible with tax collection figures seeing double-digit growth. He had said that there has been a 26.2 per cent increase in central indirect tax collection till November 30, while till December 19, direct tax collection increase has been to the extent of 14.4 per cent against a growth rate of only 8.3 per cent previous year. Traders also took some encouragement with the Reserve Bank of India (RBI) easing norms for working capital lending to micro and small enterprises (MSEs) on difficulties faced by them, as a result of the sudden withdrawal of legal tender status of high-value currency notes.

On the global front, most of the Asian counters, paring all their initial losses, were trading in green at this point of time. The US markets coming off the early highs ended modestly lower in the last session, though selling pressure remained subdued, limiting the downside for the major averages. 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 favour of advances, as there were 1,482 shares on the gaining side against 333 shares on the losing side while 74 shares remain unchanged.

The BSE Sensex is currently trading at 26571.60, up by 205.45 points or 0.78% after trading in a range of 26406.53 and 26578.70. 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 1.29%, while Small cap index was up by 1.02%.

The top gaining sectoral indices on the BSE were FMCG up by 1.28%, Power up by 1.11%, Bankex up by 1.06%, Capital Goods up by 0.94% and Consumer Durables was up by 0.74%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 1.73%, ITC up by 1.55%, Axis Bank up by 1.52%, SBI up by 1.31% and Cipla was up by 1.10%. On the flip side, Bharti Airtel down by 0.53%, Coal India down by 0.27% and Dr. Reddys Lab was down by 0.10% were the top losers.

Meanwhile, the Government set-up panel to review the working of the Fiscal Responsibility and Budget Management (FRBM) Act has sought the views of the Reserve Bank of India (RBI) on the path to fiscal consolidation. The FRBM Panel is likely to submit its report by January 13, 2017, after factoring in the inputs of the RBI.
FRBM is likely to suggest a fiscal roadmap in its report and might also suggest deviating from the current 3 percent fiscal deficit target in 2017-18 and suggest a specific target for fiscal deficit instead of range. Among other things, the panel has been examining the need and feasibility of having a ‘fiscal deficit range’ as the target in place of the existing fixed numbers (percentage of GDP) as the goal. However, the panel report is unlikely to be made public until Budget.

The Committee was originally slated to submit its report by October 31, but exceeded the time table after the government expanded their scope of work to include examination of the recommendations of 14th Finance Commission as also of the Expenditure Management Commission (EMC). The five member committee, under former revenue secretary N K Singh, was set up to review the working of the FRBM Act over the last 12 years and suggest the way forward ‘keeping in view the broad objective of fiscal consolidation and prudence and the changes required in the context of the uncertainty and volatility in the global economy’. The other members of the committee, which was announced by Finance Minister Arun Jaitley in his Budget speech, include former finance secretary Sumit Bose, Chief Economic Advisor Arvind Subramanian, the then RBI deputy governor Urjit Patel and NIPFP Director Rathin Roy.

The CNX Nifty is currently trading at 8159.60, up by 56.00 points or 0.69% after trading in a range of 8114.75 and 8165.20. There were 44 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 2.55%, Tata Power up by 2.26%, ICICI Bank up by 1.63%, Ambuja Cement up by 1.47% and Eicher Motors up by 1.41%. On the flip side, Bharti Infratel down by 1.13%, BPCL down by 1.07%, Bharti Airtel down by 0.71%, Coal India down by 0.42% and Dr. Reddys Lab down by 0.14% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite rose 2.21 points or 0.07% to 3,098.31, Nikkei 225 gained 6.26 points or 0.03% to 19,151.40, Jakarta Composite increased 27.77 points or 0.52% to 5,330.34, Taiwan Weighted added 88.12 points or 0.96% to 9,241.21 and Hang Seng was up by 212.73 points or 0.98% to 22,003.64. On the flip side, FTSE Bursa Malaysia KLCI was down by 3.86 points or 0.24% to 1,634.07.