Benchmarks pare gains but trade continues in green

Indian equities pared most of their initial gains but continue to trade in green in the afternoon session, taking cues from Asian counterparts. Sentiments got some support with the United Nations World Economic Situation and Prospects (WESP) 2017 report, which highlighted that India's economy is projected to grow by 7.7 percent in fiscal year 2017, on the back of robust private consumption and significant domestic reforms gradually being implemented by the government. Besides, appreciation in Indian rupee coupled with gains in Metal, Consumer Durables, Capital Goods and FMCG sector stocks, too aided to optimistic milieu.  In scrip specific development, Panacea Biotec rallied after receiving approval from US Food and Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) to market a generic version of Rizatriptan Benzoate Tablet, Orally Disintegrating, 5 mg and 10 mg.

On the global front, most of the Asian markets were trading in green, led by Hong Kong and Chinese shares, as investors judged US president-elect Donald Trump’s concerns over a stronger dollar to be beneficial to some of the regional bourses.

The BSE Sensex is currently trading at 27295.74, up by 60.08 points or 0.22% after trading in a range of 27256.74 and 27422.67. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index added 0.59%.

The top gaining sectoral indices on the BSE were Metal up by 2.03%, Consumer Durables up by 1.02%, Capital Goods up by 1.00%, FMCG up by 0.66% and Bankex up by 0.61%, while Oil & Gas down by 0.55% and PSU down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.08%, Hindustan Unilever up by 2.73%, Larsen & Toubro up by 1.01%, Adani Ports & SEZ up by 0.83% and Asian Paints up by 0.71%. On the flip side, NTPC down by 1.71%, GAIL India down by 1.54%, Bharti Airtel down by 1.45%, Reliance Industries down by 0.97% and Bajaj Auto down by 0.73% were the top losers.

Meanwhile, the Associated Chambers of Commerce & Industry of India (Assocham) in its latest report has said that government’s demonetization move may wipe out the present stock of black money held in cash form economy but cannot eliminate the ill-gotten wealth converted into assets such as gold and real estate. It also said that scrapping of high value notes does not prevent the future generation of unaccounted money.

The Assocham study on Currency Demonetisation has stated that withdrawing existing high value demonetized notes addresses the stock of black money but little to address future flows. Therefore, to eliminate such flows, the industry body has suggested measures such as lowering stamp duty on property transactions, electronic registration of real estate etc.

The study also pointed out that high denomination currency withdrawal is not without some inherent problems. It added that it is very difficult to separate black money from white money because distinction is not once-and-for-all. It noted that white money used to purchase something becomes black if the shop-keeper does not pay sales tax and much of conspicuous consumption is paid for in unaccounted money, which, in the hand of the recipients can again become perfectly legal income.

The industry body highlighted that the problem of undisclosed incomes and wealth has to be tackled at the source. It said that the government  must reduce  the opportunity and incentives for unaccounted  transactions by narrowing the gap between the market value and the one fixed by the government agencies for different levies like stamp duty etc. Further, the chamber suggested several measures to check the menace of black money which include reducing discretionary powers to officers, which is possible if the rules and laws are crystal clear and are not left to individuals’ interpretation.

The CNX Nifty is currently trading at 8421.30, up by 23.30 points or 0.28% after trading in a range of 8403.65 and 8460.30. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.87%, Tata Steel up by 2.89%, Hindustan Unilever up by 2.73%, Ultratech Cement up by 1.67% and Grasim Industries up by 1.50%. On the flip side, Bharti Airtel down by 1.81%, GAIL India down by 1.68%, NTPC down by 1.45%, BPCL down by 1.20% and Reliance Industries down by 1.01% were the top losers.

The Asian markets were trading mostly in green, Shanghai Composite increased 5.71 points or 0.18% to 3,114.48, FTSE Bursa Malaysia KLCI gained 5.86 points or 0.35% to 1,668.89, Jakarta Composite was up by 22.6 points or 0.43% to 5,289.54, Nikkei 225 rose 80.84 points or 0.43% to 18,894.37, Hang Seng increased 256.23 points or 1.12% to 23,097.20.

On the flip side, Taiwan Weighted decreased 12.56 points or 0.13% to 9,341.97 and KOSPI Index declined 1.33 points or 0.06% to 2,070.54.