Markets maintain gains supported by buying in banking and metals

Indian markets despite mild profit taking were maintaining their strength towards the mid of the day’s trade, tracking positive trade across Asian indices. Market was getting support from buying in the banking and metal stocks and Nifty was comfortably sailing near the crucial 8450 mark. The strength in the markets was being supported by foreign investors’ buying, after the Income Tax Department put in abeyance its controversial circular on taxing India-dedicated funds. CBDT said that with number of representations from various FPIs, venture capital funds and other stakeholders, expressing concern of possible multiple taxation of the same income currently under consideration and examination, the circular is kept in abeyance for the time being. Meanwhile, Capital markets regulator SEBI is assessing the impact of demonetisation on flight of foreign funds from the country during the October-December quarter. There was some encouragement to the market with the strength in rupee too, which continued to appreciate further for the third straight day on account of sustained selling of the American currency by banks and exporters.

On the sectoral front, barring some weakness in telecom and oil & gas sectors, all others were trading in green led by basic materials and capital goods. Broader markets too extended gains amid broad-based buying.

The BSE Sensex is currently trading at 27383.69, up by 148.03 points or 0.54% after trading in a range of 27256.74 and 27422.67. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices too were trading in green; the BSE Mid cap index was up by 0.62%, while Small cap index was higher by 0.77%.

The top gaining sectoral indices on the BSE were Metal up by 1.95%, Capital Goods up by 1.28%, Bankex up by 1.01%, FMCG up by 0.94% and Power up by 0.71%, while Telecom down by 0.39% and Oil & Gas down by 0.24% were the only losing indices on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 3.15%, Hindustan Unilever up by 2.69%, Larsen & Toubro up by 1.36%, Adani Ports & SEZ up by 1.27% and SBI up by 1.05%. On the flip side, Bharti Airtel down by 1.32%, NTPC down by 1.05%, GAIL India down by 1.01%, Reliance Industries down by 0.48% and Bajaj Auto down by 0.34% were the top losers.

Meanwhile, the United Nations World Economic Situation and Prospects (WESP) 2017 report has forecasted that India’s economy can grow at about 7.7 per cent in the financial year 2017 and 7.6 per cent in 2018. Report also said that the country was still the fastest growing large developing economy, on the back of robust private consumption and significant domestic reforms gradually being implemented by the government. However, it cautioned that low capacity utilisation and stressed balance sheets of banks and businesses will prevent a strong investment revival in the short term.

On the other hand, report has said that China's economy growth is likely to remain stable at 6.5 percent in the financial year 2017 and 2018, buoyed by favourable domestic demand and accommodative fiscal measures, including off-budget fiscal support through policy banks and public-private partnerships. However, it also said that the implications of China's ongoing economic rebalancing will inevitably be felt by the region in the medium and long-run through trade (including commodity prices) and financial channels, albeit to a varied extent across countries.

The report further said that in India, investment demand is likely to marginally pick up, helped by monetary easing, government efforts towards infrastructure investments and public-private partnerships and the implementation of domestic reforms such as the introduction of the Goods and Services Tax (GST) Bill. It also noted that this reform should promote investment in the medium term through lower transaction and logistic costs and efficiency gains. Its effective implementation requires adequate capacity building of the tax administration. It added that the GST reform constitutes a major change by establishing a new uniform tax rate.

Meanwhile, the report of the United Nations comes a day after the International Monetary Fund (IMF) has cut India’s economic growth estimate for 2016-17 to 6.6% from its earlier projection of 7.6%, due to the impact of the government's move of demonetization of high value currency notes in early November. The World Bank too cut India’s Gross Domestic Product (GDP) growth to 7 percent from its earlier estimate of 7.6 percent on note ban woes. However, report did not take into consideration the impact of the demonization policy on the country's economic growth.

The CNX Nifty is currently trading at 8446.70, up by 48.70 points or 0.58% after trading in a range of 8403.65 and 8460.30. There were 39 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were BHEL up by 4.49%, Tata Steel up by 3.15%, Hindustan Unilever up by 2.73%, Grasim Industries up by 2.06% and Ultratech Cement up by 1.83%. On the flip side, Bharti Airtel down by 1.57%, BPCL down by 1.17%, NTPC down by 1.00%, GAIL India down by 0.94% and Reliance Industries down by 0.42% were the top losers.

Most of the Asian markets were trading in green, KOSPI Index was tad higher by 0.22 points or 0.01% to 2,072.09, FTSE Bursa Malaysia KLCI gained 4.06 points or 0.24% to 1,667.09, Shanghai Composite was up by 9.87 points or 0.32% to 3,118.64, Jakarta Composite added 15.25 points or 0.29% to 5,282.19, Nikkei 225 increased by 106.61 points or 0.57% to 18,920.14 and Hang Seng surged by 257.24 points or 1.13% to 23,098.21.

On the flipside Taiwan Weighted was down by 12.56 points or 0.13% to 9,341.97.