Benchmarks trade in green; Nifty above 8400 mark

Indian equity benchmarks added strength in late morning session on account of buying in front line blue chip counters. The markets are likely to continue its consolidation mood as there is a high level of uncertainty caused by the currency exchange, the upcoming Union Budget, General Anti-Avoidance Rule (GAAR) and GST implementation, impending state elections, and flux in US policy. Traders were getting support with Moody’s Investors Service and its Indian affiliate ICRA report that India will remain one of the fastest growing major economies globally in 2017, although GDP growth will moderate in the first half of the year, as the economy adjusts after demonetization. Moody’s also believes that the government will likely achieve its fiscal deficit target of 3.5% of GDP for the current fiscal year ending March 31, 2017. Some support also came with buying interest in public sector banks on reports that the Finance Ministry is likely to finalize a capital infusion plan for public sector banks this week based on the request of various lenders affected by demonetization amid rising bad loans. Investors maintained a cautious note ahead of Goods and Services Tax (GST) Council meeting and Wholesale Price index-based inflation scheduled later in the day. Finance Minister Arun Jaitley will look to break the deadlock over distribution of powers between centre and states to administer GST, an issue that is holding up launch of the new national sales tax from April. The council has been deadlocked in the last four meetings, the last one being on January 4, with states seeking sole powers to control assessee with annual turnover of up to Rs 1.5 crore.

Traders were seen piling position in Realty, Consumer Durables and Metal stocks, while selling was witnessed in IT, TECK and Oil & Gas sector stocks. Oil marketing companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) were trading in green following a hike in petrol prices by 42 paise a litre on Sunday, the fourth increase in 6 weeks, and diesel rate by Rs 1.03 a litre, the second hike in a fortnight. In scrip specific development, DCB Bank was trading in green following a 25% rise in December quarter net profit at Rs 51 crore, driven primarily by a surge in the core interest income. The lender had reported a post tax profit of Rs 41 crore in the year-ago period.

On the global front, Asian shares were trading mostly in red, on worries UK Prime Minister Theresa May might signal plans for a ‘hard Brexit’ in her speech on Tuesday. The Bank of Japan raised its economic assessment for three of the country’s nine regions in a quarterly report, saying that most areas were seeing a moderate economic recovery. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,400 and 27,200 levels respectively. The market breadth on BSE was positive in the ratio of 1411:774, while 128 scrips remained unchanged.

The BSE Sensex is currently trading at 27275.98, up by 37.92 points or 0.14% after trading in a range of 27172.68 and 27301.38. There were 16 stocks advancing against 14 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 0.50%.

The top gaining sectoral indices on the BSE were Realty up by 2.25%, Consumer Durables up by 1.30%, Metal up by 1.13%, Bankex up by 0.35% and Capital Goods up by 0.32%, while IT down by 0.75%, TECK down by 0.47%, Oil & Gas down by 0.09% and FMCG down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 2.16%, Tata Steel up by 2.08%, Tata Motors up by 1.31%, HDFC up by 1.12% and Lupin up by 0.93%.

On the flip side, Infosys down by 1.52%, Sun Pharma down by 0.68%, Reliance Industries down by 0.56%, Hindustan Unilever down by 0.48% and ONGC down by 0.37% were the top losers.

Meanwhile, in the ninth meeting of all powerful GST Council, headed by Jaitley, the Centre and states will look at a formula to sort out the row over levying goods and services tax on the high seas by letting the government collect the tax and pass it on to the states. The Centre's proposal to tax transactions that take place within 12 nautical miles from state borders has been opposed by several states, including BJP-ruled Gujarat and Maharashtra as well as Kerala, Karnataka and Odisha, which stand to lose substantial revenue.

Finance Minister Arun Jaitley has said that 'most of the issues have been sorted out, some critical issues remain and these critical issues over the next few weeks we will try and solve out'. 'We would want it to be implemented from April if all issues are resolved.' According to Jaitley, GST needs to be rolled out latest by September 16, 2017.

Jaitley will also look to break the deadlock over distribution of powers between centre and states to administer GST, an issue that is holding up launch of the new national sales tax from April. The council has been deadlocked in the last four meetings, with states seeking sole powers to control assessee with annual turnover of up to Rs 1.5 crore.

The council had in previous meeting agreed on most of the clauses of the draft IGST law, which along with Central-GST (CGST) and State-GST (SGST) have to be passed by the Parliament and state legislatives respectively before the new tax regime can be rolled out.

The CNX Nifty is currently trading at 8403.90, up by 3.55 points or 0.04% after trading in a range of 8374.40 and 8414.95. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Adani Ports & Special Economic Zone up by 2.26%, Tata Steel up by 2.23%, Idea Cellular up by 1.53%, Zee Entertainment up by 1.39% and Tata Motors up by 1.20%.

On the flip side, HCL Tech down by 1.83%, Eicher Motors down by 1.67%, Infosys down by 1.64%, Tech Mahindra down by 0.86% and Sun Pharma down by 0.84% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 242.75 points or 1.06% to 22,694.63, Nikkei 225 decreased 154.01 points or 0.8% to 19,133.27, Taiwan Weighted decreased 84.65 points or 0.9% to 9,294.18, Shanghai Composite decreased 43.83 points or 1.41% to 3,068.93, KOSPI Index decreased 14.71 points or 0.71% to 2,062.08 and FTSE Bursa Malaysia KLCI decreased 5.72 points or 0.34% to 1,666.78.

On the other hand, Jakarta Composite increased 4.47 points or 0.08% to 5,277.45.