Markets continue to trade in green in noon session

Benchmark equity indices continued to trade in green in noon session as banks recovered from the previous session's losses on hopes of a pickup in credit growth following cuts in lending rates. Sentiments got some support after Union Finance Minister Arun Jaitley expressed hope that Goods and Services Tax (GST) will be implemented in 2017 and a digitised economy will be future of India. He also said that the last year was a very successful year for India as the country continued to remain the fastest economy in the world. Besides, appreciation in Indian rupee also aided the sentiment. However, gains were limited after a government report showed that Core sector output in the month of November slowed down to 4.9% from 6.6% in October and 5.01% in September, mainly due to decline in production of crude oil and natural gas. Though, it was higher than the 0.6% growth seen in November 2015, on the back of healthy performance by sectors, including coal, steel and electricity. Meanwhile, investors are eyeing on the GST Council meeting, to arrive at a consensus on contentious issues, including dual administrative control and inter-state supply. In scrip specific development, MEP Infrastructure Developers was up by over four percent after the company received LoA from NHAI for the collection of user fee for ‘BRIJGHAT FEE PLAZA’ at 88.5 for the section from 58 km to 93 km (Hapur-Garhmuketeshwar Section) of National Highway No. 24 in the state of Uttar Pradesh.

On the global front, Asian markets were trading mostly in green after a key indicator of China's private manufacturing showed robust gains in December, while Hong Kong gaming stocks tumbled on Macau gambling revenue declines.

The BSE Sensex is currently trading at 26673.04, up by 77.59 points or 0.29% after trading in a range of 26488.37 and 26693.57. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.66%, while Small cap index was up by 0.96%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 3.22%, Oil & Gas up by 1.97%, PSU up by 1.53%, Power up by 1.10% and FMCG up by 0.88%, while IT down by 0.47%, TECK down by 0.43% and Auto down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid Corp. up by 2.32%, Axis Bank up by 1.81%, ITC up by 1.43%, Coal India up by 1.33% and Reliance Industries up by 1.01%. On the flip side, Infosys down by 1.36%, Hero MotoCorp down by 0.78%, Bharti Airtel down by 0.71%, Tata Steel down by 0.67% and Mahindra & Mahindra down by 0.57% were the top losers.

Meanwhile, following the rate cuts announcement by public sector and private sectors banks, India Inc has expressed hope that cheaper loans will boost economy and push up consumption as lending may pick up significantly. Industry chamber, CII has said that lending rates cuts will play a crucial role in the process of strengthening the economy in the medium term. CII Director General Chandrajit Banerjee stated that the sectors such as consumer durables, automobiles and housing should see a recovery as loans become cheaper. He also said that various measures have been taken to encourage lending to the SME sector and added that bank lending is expected to pick up considerably, as deposit mobilisation has been strong following demonetization.

Ficci president Pankaj Patel said that it is encouraging to see the banks moving towards an easier lending rate regime. He also expressed hope that this rate cut cycle will be carried forward and added that with sufficient liquidity now at their disposal and credit growth moving at a slow pace, lowering of interest rates was the need of the hour.

Following the Prime Minister Narendra Modi’s address to the nation on December 31, lenders such as SBI, PNB, Union Bank of India, IDBI and ICICI have announced rate cuts. PM had appealed to the banks flush with currency to move beyond their traditional priorities, and keep the poor, the lower middle class, and the middle class at the focus of their activities.  State Bank of India, the country’s largest lender has cut its benchmark lending rate by 0.9 per cent across various maturities with immediate effect. The bank reduced marginal cost of funds based lending rate (MCLR) to 8 per cent from 8.90 per cent for 1-year tenure. Similarly, Union Bank of India reduced its lending rate by 0.65 per cent to 8.65 per cent. Last week, SBI subsidiary State Bank of Travancore also cut rates by up to 0.3 per cent, while IDBI Bank cut its lending rate by up to 0.6 per cent across various loan tenors.

The CNX Nifty is currently trading at 8206.60, up by 27.10 points or 0.33% after trading in a range of 8148.60 and 8214.75. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.61%, BPCL up by 2.40%, Power Grid Corpn. up by 2.31%, Indusind Bank up by 1.88% and Yes Bank up by 1.88%. On the flip side, Infosys down by 1.35%, Idea Cellular down by 1.07%, Hero MotoCorp down by 0.93%, Bharti Infratel down by 0.87% and Mahindra & Mahindra down by 0.83% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 17.81 points or 0.88% to 2,043.97, Taiwan Weighted rose 19.38 points or 0.21% to 9,272.88, Shanghai Composite added 31.59 points or 1.02% to 3,135.23 and Hang Seng was up by 149 points or 0.68% to 22,149.56. On the flip side, Jakarta Composite decreased 31.75 points or 0.6% to 5,264.96 and FTSE Bursa Malaysia KLCI was down by 8.63 points or 0.53% to 1,633.10.