Markets pare losses to trade in green

Indian equity indices pared all of its losses and entered into positive territory in late afternoon session on fresh buying by investors in selected blue-chip counters. Sentiments got some support with the Reserve Bank of India (RBI) governor Urjit Patel’s statement that nationwide goods and services tax (GST) and legislation of bankruptcy code should impart resilience to the economy and demonitisation of high value currency notes have the potential to transform the economy. However, upside remained capped with industry body, Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report highlighted that banning of high value notes would lower growth rate due to economic slowdown in the third and fourth quarters of fiscal 2016-17.

On the global front, European stocks were trading in red. German shares fell slightly in thin trade on the first trading day of the year after U.S. stocks ended 2016 with a whimper on Friday and data out of China showed the pace of growth in China's manufacturing and services sectors slowed in December. Asian markets were closed on account of trading holiday except South Korean market which was trading in red. Back home, in scrip specific development, SML Isuzu edged higher on reporting 16.4% jump in December sales and Natco Pharma jumped over a one percent after the company launched the first generic version of Sofosbuvir, Velpanat in Nepal.

The BSE Sensex is currently trading at 26651.21, up by 24.75 points or 0.09% after trading in a range of 26447.06 and 26720.98. There were 19 stocks advancing against 10 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.74%, while Small cap index was up by 1.11%.

The top gaining sectoral indices on the BSE were Realty up by 4.64%, Metal up by 1.61%, Auto up by 1.52%, Consumer Durables up by 1.23% and Capital Goods up by 0.98%, while Bankex down by 0.82% was the sole losing index on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.26%, Tata Steel up by 3.20%, Tata Motors up by 2.26%, Dr. Reddys Lab up by 1.68% and Maruti Suzuki up by 1.66%. On the flip side, HDFC down by 2.80%, SBI down by 1.98%, Bajaj Auto down by 1.25%, ICICI Bank down by 1.10% and Infosys down by 0.50% were the top losers.

Meanwhile, Finance Ministry in its year-end review has stated that India retained its position as one of the fastest growing major economies in the world, as the Indian economy grew 7.2 per cent in the first half of the current fiscal. The ministry said that the stress given to fiscal consolidation through expenditure rationalisation and revenue-raising efforts and the focus on administrative measures for cooperative financial governance and steps towards containing inflation have contributed significantly to macro-economic stability.

The report pointed out that the economic growth has continued to be robust even though the global economy remained sluggish and recent rise in petroleum prices. It said that the government has undertaken a number of policy measures including enhanced public investment, kick starting stalled projects, improving governance through systemic changes like open auction for natural resources, and improving business environment. Further, the government has also liberalised and simplified the foreign direct investment (FDI) policy in the sectors like defence, railway infrastructure, construction and pharmaceuticals etc.

Talking about inflation, the report said that it has remained in comfort zone during the year with retail & wholesale inflation averaging 5.2% and 2.7%, respectively, in the April-October period, while fiscal deficit & current account deficit as percentage of GDP improved and the growth rates for agriculture and allied sectors, industry and services sectors during the six-month period are estimated at 2.5 per cent, 5.6 per cent, and 9.2 percent, respectively. During April-October period of the ongoing fiscal, trade deficit decreased to $ 53.2 billion from $ 78.2 billion a year ago.

The CNX Nifty is currently trading at 8193.65, up by 7.85 points or 0.10% after trading in a range of 8133.80 and 8212.00. There were 35 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.36%, Eicher Motors up by 3.20%, Mahindra & Mahindra up by 3.19%, Ultratech Cement up by 2.61% and Tata Motors - DVR up by 2.32%. On the flip side, HDFC down by 2.97%, SBI down by 2.18%, Bank of Baroda down by 1.89%, Indusind Bank down by 1.45% and Bajaj Auto down by 1.07% were the top losers.

Equity markets in China, Japan, Hong Kong, and Australia are all shut on account of the New Year holiday. The only counter opened today was KOSPI Index decreased 0.3 points or 0.01% to 2,026.16.

European markets were trading in red; Germany’s DAX decreased 14.95 points or 0.13% to 11,466.11 and France’s CAC was down by 6.49 points or 0.13% to 4,855.82. London stock exchange was closed on account of New Year holiday.