Benchmarks continue to trade in positive territory

Indian equity benchmarks continued to trade in positive territory in late afternoon session on the back of healthy buying in FMCG, Realty and Power counters. Sentiments remained upbeat with Prime Minister Narendra Modi's statement that the decision to scrap high-value bank notes will give the economy a further boost, and would provide long-term benefits, including forcing the country's vast shadow economy into the open. Some support also came 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%. On the currency front, the rupee was quoting higher by 21 paise against the dollar at 67.88 in afternoon session.

On the global front, European markets were trading in red, as investors focus on end-year data. Asian markets were trading in green despite the modest losses overnight on Wall Street. Back home, in scrip specific development, Steel Strips Wheels was trading in green after the company bagged repeat export order for supply of Steel wheels for winter market in EU and Canada. Total order value would be more than $107,000 for supplies in a period of four months.

The BSE Sensex is currently trading at 26635.74, up by 269.59 points or 1.02% after trading in a range of 26406.53 and 26651.79. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.21%, while Small cap index was up by 1.07%.

The top gaining sectoral indices on the BSE were FMCG up by 1.87%, Realty up by 1.61%, Power up by 1.47%, Capital Goods up by 1.16% and Bankex up by 1.12%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Power Grid up by 2.84%, ITC up by 2.59%, Sun Pharma up by 2.52%, ICICI Bank up by 1.93% and Axis Bank up by 1.60%. On the flip side, Tata Steel down by 0.64%, Bajaj Auto down by 0.41%, Dr. Reddys Lab down by 0.36%, ONGC down by 0.34% and Tata Motors down by 0.13% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Urjit Patel has said that demonetisation move will have far reaching changes towards a transformative effect on the economy going forward, despite some short-term disruptions and public hardship. On the eve of the deadline for citizens to deposit demonetised currency in banks, he also cautioned that there was little room for complacency and it is important to guard against sporadic volatility in financial markets.

In his foreword to the half-yearly Financial Stability Report (FSR), Patel said that the withdrawal of specified bank notes (SBNs) will impart far reaching changes going forward. It is expected to significantly transform the domestic economy. He said the increasing adoption of digital modes of payments will lead to greater intermediation, efficiency gains, accountability and transparency.

RBI Governor acknowledged there have been short-term disruptions and hardship to the public because of the demonetisation of high value currency. Patel also said that introduction of reform measures like the Goods and Services Tax on indirect taxation and the Bankruptcy Code for resolving asset quality stress will impart resilience to the economy.

He said the global financial crisis led banks to do stress test and match risk appetites with risk taking capacity, and added that last year's asset quality review and the subsequent corrective actions, which led to a spike in bad assets and shaving profits, are efforts in the same direction. Further, he said the stress shown by the domestic banking system is partly reflective of legacy issues but enhanced transparency has helped to reinforce the stability of India's financial system. On the domestic macroeconomic front, he said that condition remains ‘stable’ with a cool-down in inflation though the growth momentum has slackened recently. The RBI had revised downward the gross value added (GVA) growth for 2016-17 to 7.1 percent from 7.6 percent, with evenly balanced risks.

The CNX Nifty is currently trading at 8182.30, up by 78.70 points or 0.97% after trading in a range of 8114.75 and 8184.90. There were 42 stocks advancing against 8 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Aurobindo Pharma up by 3.15%, Power Grid up by 2.53%, ITC up by 2.52%, Sun Pharma up by 2.38% and ICICI Bank up by 2.05%. On the flip side, Tata Steel down by 0.59%, Dr. Reddys Lab down by 0.48%, ONGC down by 0.37%, BPCL down by 0.36% and Bharti Infratel down by 0.29% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 7.54 points or 0.24% to 3,103.64, Jakarta Composite increased 13.78 points or 0.26% to 5,316.35, Taiwan Weighted increased 100.41 points or 1.1% to 9,253.50 and Hang Seng increased 209.65 points or 0.96% to 22,000.56. On the flip side, Nikkei 225 decreased 30.77 points or 0.16% to 19,114.37 and FTSE Bursa Malaysia KLCI decreased 4.53 points or 0.28% to 1,633.69.

All European markets were trading in red; Germany’s DAX decreased 26.59 points or 0.23% to 11,424.46, UK’s FTSE 100 decreased 13.47 points or 0.19% to 7,106.79 and France’s CAC decreased 12.54 points or 0.26% to 4,825.93.