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 supported by positive global cues along with gains in Metal, Oil & Gas and Realty sector stocks. Sentiments got some support with BRICS nation's National Development Bank chief K V Kamath’s statement that India will continue to grow on the back of its consumption-driven economy. He also said that global economic uncertainty may not have much impact on India. Besides, recovery in the rupee value also supported the sentiment. The rupee was trading strong at 68.11 in early deals on increased selling of the American currency by exporters. However, was some cautiousness too with a major central revenue body asking Finance Minister Arun Jaitley not to implement Goods and Services Tax (GST) in a hurry and threatened to take legal recourse in case their concerns are not addressed, claiming that demonetisation has affected country’s growth. In scrip specific development, Pharma Major Lupin was up by over a percent after receiving final approval for its Paroxetin Extended Release Tablets USP, 12.5 mg, 25 mg and 37.5 mg from USFDA to market a generic version of Apotex Technologies, Inc’s Paxil CR Tablets, 12.5 mg, 25 mg and 37.5 mg.

On the global front, Asian markets were trading mostly in green, following the modest gains on Wall Street Friday after Donald Trump's inauguration as the 45th U.S. President. However, investors turned cautious after Trump's inaugural address did not specify his economic policies, but sounded protectionist after he pledged to lead an administration that puts America first.

The BSE Sensex is currently trading at 27082.42, up by 47.92 points or 0.18% after trading in a range of 26963.58 and 27167.79. 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 0.19%, while Small cap index was up by 0.39%.

The top gaining sectoral indices on the BSE were Metal up by 1.58%, Oil & Gas up by 1.19%, PSU up by 1.11%, Realty up by 1.01% and FMCG up by 0.61%, while Capital Goods down by 0.35% and Bankex down by 0.18% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.39%, Lupin up by 1.66%, ONGC up by 1.55%, Tata Motors up by 1.44% and Tata Steel up by 1.29%. On the flip side, ICICI Bank down by 2.52%, Axis Bank down by 1.09%, Larsen & Toubro down by 1.03%, Bharti Airtel down by 0.98% and Hindustan Unilever down by 0.71% were the top losers.

Meanwhile, Finance ministry’s Revenue Department, responding to the query on impact of demonetisation on economic growth by the Parliament's Public Accounts Committee (PAC), has said that note ban will lead to a wider and deeper tax base and also to lower interest rates. It further added that the idle or hidden cash which has come into the formal system after note ban will be utilized for productive purposes.

The department further elaborated that tax evasion is going to be more difficult as now it is easier to track the cash which has returned to banking channels. It also mentioned that increased availability of funds with banks and lowering of interest rates are expected to enhance credit disbursal, promoting investments in productive economic activities and giving boost to growth.

On measures to enhance transparency, Revenue Department said that increasing use of non-cash modes of transactions will promote transparency and will have a lasting positive impact on tax collections, both direct and indirect. It noted that along with other measures for increasing transparency and strengthening enforcement, demonetisation will pave the way for sustainable faster economic growth.

The CNX Nifty is currently trading at 8372.50, up by 23.15 points or 0.28% after trading in a range of 8327.20 and 8404.15. There were 33 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.41%, GAIL India up by 2.34%, Zee Entertainment up by 2.02%, BPCL up by 1.96% and Grasim Industries up by 1.65%. On the flip side, ICICI Bank down by 2.68%, Bharti Infratel down by 1.61%, Axis Bank down by 1.22%, Aurobindo Pharma down by 1.20% and Larsen & Toubro down by 1.12% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 0.38 points or 0.02% to 2,065.99, Shanghai Composite increased 8.41 points or 0.27% to 3,131.55, FTSE Bursa Malaysia KLCI increased 8.52 points or 0.51% to 1,673.41 and Taiwan Weighted increased 92.59 points or 0.99% to 9,424.05.

On the flip side, Nikkei 225 decreased 246.88 points or 1.29% to 18,891.03, Hang Seng decreased 12.3 points or 0.05% to 22,873.61 and Jakarta Composite decreased 4.11 points or 0.08% to 5,250.20.