Markets trade with traction; FMCG stocks surge

Going from strength to strength, local equity markets added further ground on back of sustained buying activities by both funds and retail investors. Sentiments were on optimistic note after Finance Minister Arun Jaitley said that the effect of note ban is evidently visible with the country’s tax collection figures showing double-digit growth. Jaitley highlighted that till November 30, there has been a 26.2% rise in central indirect tax collection and till December 19, direct tax collection increase has been to the extent of 14.4%. Some support also came with the RBI Governor Urjit Patel’s statement that demonetisation will have a transformative effect on the economy going forward, despite some short-term disruptions and public hardship. He said that the increasing adoption of digital modes of payments will lead to greater intermediation, efficiency gains, accountability and transparency. Besides, appreciation in Indian rupee against dollars also supported the sentiments. In scrip specific development, GE Power India was up by around six percent after the company received contracts worth $40 million by Bharat Heavy Electricals to supply components and services for the supercritical steam generator island packages for 2x800 MW coal-based Uppur Thermal Power Project and 1x800MW coal-based North Chennai Supercritical Thermal Power Project Stage-III.

On the global front, Asian markets were trading mostly in green on Friday, the last trading day of 2016, despite the modest losses overnight on Wall Street. Trading volumes remain thin in the absence of any market-moving news. The U.S. dollar weakened, while crude oil prices rebounded in Asian trades.

The BSE Sensex is currently trading at 26619.38, up by 253.23 points or 0.96% after trading in a range of 26406.53 and 26642.18. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.27%, while Small cap index gained 1.04%.

The top gaining sectoral indices on the BSE were FMCG up by 1.81%, Capital Goods up by 1.09%, IT up by 1.09%, Bankex up by 1.04% and Power up by 0.98%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were ITC up by 2.57%, Adani Ports &Special up by 1.89%, ICICI Bank up by 1.83%, Sun Pharma Inds. up by 1.82% and SBI up by 1.56%. On the flip side, Bharti Airtel down by 0.63%, Tata Motors down by 0.29%, Bajaj Auto down by 0.18% and Tata Steel down by 0.14% were the top losers.

Meanwhile, negating the ill effects of demonetisation and highlighting the positive impact on tax collection, Finance Minister Arun Jaitley has said that the effect of note ban is evidently visible with the country’s tax collection figures showing double-digit growth. Jaitley highlighted that till November 30, there has been a 26.2% rise in central indirect tax collection and till December 19, direct tax collection increase has been to the extent of 14.4%.

In central Indirect Taxes, Finance Minister has said that excise duty up by 43.5%, Service tax up by 25.7 % & Custom Duties up by 5.6% till Nov 30, 2016 and also added that life insurance, international tourism, petroleum consumption, flow into mutual funds has increased by 11%. On the GDP impact, he said that there could have been adverse impact of demonetisation on GDP for quarter or so, but it is not as bad as predicted.  

On the liquidity situation in the markets, Jaitley has stated that a large part of old currency notes have been replaced and more notes of Rs 500 being increased. He also said that demonetisation has brought a large part of money into the banking system which has increased the ability of the banks to lend. He further said that with the critical part of remonetisation already behind them and there being no impact on the above areas, the situation in the coming weeks is surely going to get bigger and better.

The CNX Nifty is currently trading at 8176.20, up by 72.60 points or 0.90% after trading in a range of 8114.75 and 8182.05. There were 42 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were ITC up by 2.54%, Aurobindo Pharma up by 2.52%, Adani Ports &Special up by 1.95%, Tech Mahindra up by 1.94% and ICICI Bank up by 1.85%. On the flip side, Bharti Airtel down by 0.76%, BPCL down by 0.61%, Hindalco down by 0.58%, Bharti Infratel down by 0.54% and Tata Motors down by 0.45% were the top losers.

Asian markets were trading mostly in green; Jakarta Composite increased 27.77 points or 0.52% to 5,330.34, Taiwan Weighted increased 100.41 points or 1.1% to 9,253.50 and Hang Seng increased 216.52 points or 0.99% to 22,007.43. On the flip side, Nikkei 225 decreased 30.77 points or 0.16% to 19,114.37 and Shanghai Composite decreased 4.4 points or 0.14% to 3,091.70.