Firm trade prevails in late morning session

Indian equity benchmarks continued their firm trade in late morning session on account of buying in front line blue chip counters. Investors were eyeing President-elect Donald Trump’s news conference later in the day for any clues to his policies on tax, fiscal spending, international trade and currencies. The street is also expecting that Budget 2017-18 will likely give a massive push to infrastructure in terms of outlay and extra budgetary resources as the Narendra Modi government looks to boost economic growth following a global slowdown abroad and demonetization at home. Traders took some support with Prime Minister Narendra Modi’s statement that India is on threshold of becoming most digitized economy in the world. While he also declared his ambition to bring about a paradigm shift through a series of historic changes, reiterating the government’s commitment to reforms and projecting India as a bright spot amid global gloom after having emerged as the world's fastest-growing economy. Investors will also keenly await the December 2016 quarter performance of Tata Consultancy Services (TCS) after its disappointing performance in the previous quarter when it failed to report meaningful sequential growth in revenue. South Indian Bank and Banco Products (India) will announce their financial results for the quarter ended December 31, 2016 today. Traders were seen piling position in Metal, Bankex and Capital Goods stocks, while selling was witnessed in IT and TECK sector stocks. Select sugar stocks were trading firm on reports that the government may not reduce import duty on sugar in the current season. In scrip specific development, Endurance Technologies was trading firm with wholly owned subsidiary in Germany - Endurance Amann GmbH, commencing operations at its new machining plant from January 10, 2017. The plant is located at Massenbachhausen, Germany, in proximity to the existing two plants of Endurance Amann GmbH.

On the global front, Asian shares were trading mostly in green, with investors eyeing the first full press conference by President-elect Donald Trump since the November election. Trump has vowed to label China a currency manipulator on his first day in office and has threatened to slap huge tariffs on imports from China. Hong Kong shares extended their recent rally into a fifth successive day as investors brushed off another loss on Wall Street. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,300 and 27,000 levels respectively. The market breadth on BSE was positive in the ratio of 1498:703, while 140 scrips remained unchanged.

The BSE Sensex is currently trading at 27031.24, up by 131.68 points or 0.49% after trading in a range of 26978.44 and 27078.69. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.78%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Metal up by 3.74%, Bankex up by 1.34%, Capital Goods up by 0.91%, PSU up by 0.85% and Auto up by 0.35%, while IT down by 0.34% and TECK down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.76%, Coal India up by 3.43%, Lupin up by 1.47%, Adani Ports & Special Economic Zone up by 1.24% and Larsen & Toubro up by 1.23%.

On the flip side, Bajaj Auto down by 0.94%, Cipla down by 0.89%, TCS down by 0.80%, Hero MotoCorp down by 0.39% and Infosys down by 0.37% were the top losers.

Meanwhile, the World Bank in latest report titled ‘Global Economic Prospects’ has cut India’s Gross Domestic Product (GDP) growth to 7 percent from its earlier estimate of 7.6 percent on the back of demonetisation of high value currency notes. It also declared that the country would regain its momentum, with growth rising to 7.6 percent in Fiscal Year (FY) 2018 and strengthening to 7.8 percent in FY 2019-20, as various reform initiatives are expected to unlock domestic supply bottlenecks and raise productivity. It has said that the immediate withdrawal of a large volume of currency in circulation and subsequent replacement with new notes announced by the government in November contributed to slowing growth in 2016.

According to the report, which pointed out that 80% of transactions were in cash, thus in the short-term, demonetisation could continue to disrupt business and household economic activities, weighing on growth. But the report also noted that in the medium-term, a benefit of demonetisation may be liquidity expansion in the banking system, helping to lower lending rates and lift economic activity. The World Bank said that the challenges encountered in phasing out large currency notes and replacing them with new ones may pose risks to the pace of other economic reforms like Goods and Services Tax, labour and land reforms.

The report added that infrastructure spending should improve the business climate and attract investment in the near-term. The World Bank said that the 'Make in India' campaign may support India's manufacturing sector, backed by domestic demand and further regulatory reforms. Moderate inflation and a civil service pay hike should support real incomes and consumption, assisted by bumper harvests after favourable monsoon rains.

The CNX Nifty is currently trading at 8332.20, up by 43.60 points or 0.53% after trading in a range of 8322.25 and 8345.45. There were 36 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were IndusInd Bank up by 4.95%, Hindalco up by 3.50%, Tata Steel up by 3.43%, Coal India up by 3.43% and Yes Bank up by 2.72%.

On the flip side, TCS down by 1.03%, Bajaj Auto down by 0.96%, Cipla down by 0.86%, Tech Mahindra down by 0.58% and HCL Tech down by 0.56% were the top losers.

The Asian markets were trading mostly in green; Jakarta Composite increased 1.64 points or 0.03% to 5,311.56, FTSE Bursa Malaysia KLCI increased 2.16 points or 0.13% to 1,674.21, KOSPI Index increased 33.59 points or 1.64% to 2,078.71, Nikkei 225 increased 69.44 points or 0.36% to 19,370.88 and Hang Seng increased 145.54 points or 0.64% to 22,890.39.

On the other hand, Shanghai Composite decreased 19.35 points or 0.61% to 3,142.32 and Taiwan Weighted decreased 13.64 points or 0.15% to 9,336.00.