Markets trade on lackluster note in noon deals

Indian benchmark indices traded on flat note with positive bias in afternoon session on account of buying in front line blue chip counters. Sentiments got some support with Finance minister Arun Jaitley’s statement that most of the states and Union territories have witnessed an increase in tax collection in December despite demonetization. As per data, tax collection figures for the period April -December 2016 show a positive trend as Direct Taxes increases by 12.01% and Indirect Taxes increases by 25% over the corresponding period last year i.e. April-December 2015. However, gains remained capped after the advance estimates of GDP data for fiscal year 2017, indicated a slowdown in growth even though the figures do not take into account the demonetisation impact. GDP growth is estimated to slow down to 7.1% in the current fiscal, from 7.6% in 2015-16, mainly due to slump in manufacturing, mining and construction sectors. In scrip specific development, Aurobindo Pharma gained over six percent after it agreed to acquire Portugal's Generis Farmaceutica SA from Magnum Capital Partners for a consideration of 135 million Euros.

On the global front, Asian markets were trading mixed, following the record closing highs on Wall Street Friday after U.S. jobs data for the month of December showed an increase in hourly wage growth, even as job growth was weaker than expected.

The BSE Sensex is currently trading at 26767.56, up by 8.33 points or 0.03% after trading in a range of 26701.18 and 26860.88. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Realty up by 1.05%, FMCG up by 0.58%, Auto up by 0.36%, Bankex up by 0.32% and Capital Goods up by 0.27%, while Power down by 0.75%, Oil & Gas down by 0.37% and PSU down by 0.28% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.04%, Reliance Industries up by 0.96%, Maruti Suzuki up by 0.95%, ITC up by 0.95% and Bajaj Auto up by 0.85%. On the flip side, Dr. Reddys Lab down by 2.82%, Power Grid down by 1.62%, Coal India down by 1.39%, Mahindra & Mahindra down by 1.36% and NTPC down by 1.25% were the top losers.

Meanwhile, describing the funds being deposited in banks following government’s demonetisation move, Finance minister Arun Jaitley has said that anonymity of money is gone and can now be identified with the owner. Moreover, he also said that the banking system has become stronger as funds have come into the banking system and these funds are now available for rural development, social welfare programmes.

Jaitley said that money in the system becomes part of the taxation system too. He added that the long-term benefit of this move is that the shadow, the parallel economy, which was not taxed, of which there was no accounting, which was not answerable, that is now becoming part of the economic system. He further said that large amount of cash with banks will lead to lower interest rates.

He also noted that when 86 per cent of a country's currency, constituting 12.2 per cent of its GDP, is squeezed out of the market and sought to be replaced by a new currency, there would obviously be significant consequences of that decision and also added that the queues outside the banks have disappeared and remonetisation has moved ahead.

On the demonetisation impact on economy, he said that economic activity is being restored as the period of pain and inconveniences is getting over and also that demonetisation decision required both courage and stamina.  He stated that the implementation of the move carried pain and can also lead to short-term criticism and inconveniences. He added that drop in economic activity on account of the currency squeeze during the remonetisation period would have a transient impact on the economy.

The CNX Nifty is currently trading at 8244.95, up by 1.15 points or 0.01% after trading in a range of 8227.75 and 8263.00. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 1.45%, Idea Cellular up by 1.37%, Eicher Motors up by 1.24%, BHEL up by 1.23% and Tech Mahindra up by 1.17%. On the flip side, Dr. Reddys Lab down by 2.92%, Power Grid down by 1.72%, Coal India down by 1.53%, NTPC down by 1.43% and Mahindra & Mahindra down by 1.35% were the top losers.

Asian markets were trading mixed; Taiwan Weighted decreased 29.8 points or 0.32% to 9,342.42, Jakarta Composite decreased 24.34 points or 0.46% to 5,322.68 and FTSE Bursa Malaysia KLCI decreased 4.62 points or 0.28% to 1,670.87. On the flip side, Hang Seng increased 9.09 points or 0.04% to 22,512.10 and Shanghai Composite increased 11.07 points or 0.35% to 3,165.39.