Benchmarks continue to trade in green in noon session

After getting a gap-up start, Indian benchmark indices continue to trade in fine fettle in noon session on sustained buying by domestic investors ahead of key macroeconomic data to be released later in the day. Sentiments remain bullish with Finance Minister Arun Jaitley’s statement that the implementation of the Goods and Services Tax (GST), coupled with a digitised economy ushered in by demonetization, will make India’s economy look much cleaner and bigger. Finance Minister reiterated that the Centre is still aiming to roll out the Goods and Services Tax (GST) regime from April 1 if all pending issues are sorted out. Besides, a positive start of the earnings season and firming trend on other Asian bourses also fuelled the domestic market sentiments. Some support also came with NITI Aayog estimating a growth rate of 8% for 2016-17 as per a ‘cautiously optimistic’ prognosis it has laid out in the appraisal document for the Twelfth Five-Year Plan, flagging the lack of reforms in land acquisition, labour and simplification of administrative procedures as impediments to growth. The review, however, does not take into account the impact of demonetisation. Meanwhile, Pharma stocks came under pressure after US president-elect Donald Trump attacked the pharmaceutical industry for high drug prices and for manufacturing overseas, saying he will create new procedures for bidding on drugs, reports AFP. On the other hand, shares of footwear companies rallied on expectation of an incentive package for leather sector in the forthcoming Budget.

On the global front, Asian market were trading mostly higher on Thursday, though Japan's Nikkei share average dropped to a near two-week low after President-elect Donald Trump failed to provide clarity on future fiscal policies in a highly-awaited press briefing. Additionally, a stronger yen weighed on exporters' shares. Ahead of the news conference, the World Bank said that Trump's proposed tax cuts and spending plans could boost US and global growth, but noted that uncertainty about his trade policies adds to risks. Overnight, Wall Street ended higher after a choppy trading session.

Back home, stocks from Power, Capital Goods and PSU counters were supporting the markets’ uptrend, while those from FMCG, Consumer Durables and Auto counters were adding to the underlying cautious undertone. In scrip specific development, Atlanta gained after the company bagged Rs 1,292 crore order from National Highways Authority of India (NHAI).

The market breadth remained pessimistic as there were 1108 shares on the gaining side against 1256 shares on the losing side, while 139 shares remained unchanged.

The BSE Sensex is currently trading at 27225.03, up by 84.62 points or 0.31% after trading in a range of 27166.69 and 27278.93. There were 12 stocks advancing against 17 stocks declining on the index, one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.03%, while Small cap index up by 0.08%.

The top gaining sectoral indices on the BSE were Power up by 2.30%, Capital Goods up by 1.12%, PSU up by 1.12%, IT up by 1.03% and TECK up by 0.80%, while FMCG down by 0.38%, Consumer Durables down by 0.11% and Auto down by 0.07% were the only losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 4.61%, NTPC up by 3.53%, ONGC up by 2.08%, Infosys up by 1.92% and Larsen & Toubro up by 1.82%. On the flip side, Dr. Reddys Lab down by 1.49%, Sun Pharma down by 1.31%, Coal India down by 1.31%, Adani Ports & SEZ down by 0.85% and Hindustan Unilever down by 0.72% were the top losers.

Meanwhile, ahead of the Union Budget 2017-18, Reserve Bank of India Governor Urjit Patel has stressed that keeping inflation rate low and stable on durable basis is ‘crucial requirement’ for a meaningful interest rate regime whereby decisions by savers and investors help to achieve maximal allocative efficiency in an economy whose investment rate has to increase for better growth outcomes.

Stating that RBI has already notified inflation target of 4 percent, Urjit Patel said the effort should be to achieve the objective of keeping prices under check on a durable basis, given the progress already made. He also noted that the RBI would continue to press ahead for a more fluid, smooth transmission of monetary policy and also enhance the linkage between changes in policy rates and other rates, including administered ones.

On the issue of fiscal deficit, Reserve Bank of India Governor said that though the central government has embarked on a fiscal consolidation path since 2013, the total borrowing by the centre and states combined is amongst the highest within G-20 countries. He also said that lower fiscal deficit will also help in better management of risk and curb financial volatility which becomes more important in view of adverse external environment.

On recapitalisation of public sector banks, Patel said that a well capitalised domestic banking system enhances the comfort of the various stakeholders to conduct business in the offshore International Financial Services Centre (IFSC) as well. GIFT has been set up by the Gujarat government as India's first IFSC that brings together world class infrastructure, connectivity, people and technology on a single platform for businesses across the world. 

The CNX Nifty is currently trading at 8399.45, up by 18.80 points or 0.22% after trading in a range of 8382.30 and 8417.20. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 4.69%, NTPC up by 3.47%, Larsen & Toubro up by 1.96%, Infosys up by 1.93% and ONGC up by 1.92%. On the flip side, Idea Cellular down by 2.61%, Aurobindo Pharma down by 1.75%, Coal India down by 1.44%, Sun Pharma down by 1.36% and Indusind Bank down by 1.36% were the top losers.

Asian markets were trading mostly in green; KOSPI Index rose 0.18%, FTSE Bursa Malaysia KLCI gained 0.21%, Shanghai Composite increased 0.2%, Jakarta Composite added 0.22% and Taiwan Weighted was up by 0.69%. On the flip side, Nikkei 225 decreased 1.15% and Hang Seng was down by 0.67%.