Indian benchmarks continue to trade in fine fettle; Nifty holds 8,500 mark

Indian benchmark equity indices continued to trade in fine fettle in noon session on sustained buying by funds and retail investors amid firm trend in other Asian bourses. Short-covering of bets, today being the last session of January expiry in the derivatives segment, kept the overall tempo up. Sentiments remained upbeat with report that Donald Trump and Narendra Modi have discussed opportunities to strengthen the partnership between the United States and India in broad areas such as the economy and defense. Some support also came with report that Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 93.95 crore, while Domestic Institutional Investors (DIIs) also bought shares worth a net Rs 533.49 crore, on January 24, 2017. However, gains remained capped with the report indicating that most Indian companies with overseas debt have not hedged enough of their foreign currency risk, making them vulnerable to any sharp movements in the rupee. The study of 100 companies holding 19.5 trillion rupees ($286.30 billion) of debt abroad as of March 2016, showed 54 of them, with 14.5 trillion exposure, were vulnerable given only 35 per cent of their balance sheets were hedged.

On the global front, Asian markets were trading higher on Wednesday, following the record closing highs overnight on Wall Street and higher crude oil prices. Shares in Japan rose on stronger-than-expected trade data and a weaker yen. Also, Japan's exports rose for the first time in 15 months in December on strong sales of electronics and car parts, a positive sign for the export-reliant economy even as U.S. protectionism threatens to hurt trade across the region and dent external demand.  Further, the dollar snapped its recent losing streak and Treasury yields pushed higher overnight as Trump shifted his focus back to growth initiatives including promising corporate tax breaks to fuel U.S. investment, after focusing on protectionism in his first few days in office.

Back home, all BSE sectoral indices were trading in the green. Among them, Consumer Durables index gained the most by 1.76 percent, followed by Realty 1.17 per cent, Capital Goods 0.95 per cent and Banking 0.74 percent. In scrip specific development, Bharat Financial Inclusion surged after the company reported 79.65% rise in its net profit at Rs 142.82 crore for third quarter ended December 31, 2016, as compared to Rs 79.50 crore for the same quarter in the previous year. On the other hand, Wockhardt declined after the company posted a net loss of Rs 19.46 crore for the quarter ended December 31, 2016, as compared to a net profit of Rs 84.24 crore for the same quarter in the previous year.

The market breadth remained optimistic, as there were 1420 shares on the gaining side against 903 shares on the losing side, while 189 shares remained unchanged.

The BSE Sensex is currently trading at 27505.65, up by 130.07 points or 0.48% after trading in a range of 27439.68 and 27531.69. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.44%, while Small cap index up by 0.70%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.76%, Realty up by 1.17%, Capital Goods up by 0.95%, Bankex up by 0.74% and Oil & Gas up by 0.67%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were HDFC up by 2.78%, Axis Bank up by 1.51%, Tata Steel up by 1.42%, Hero MotoCorp up by 1.19% and Larsen & Toubro up by 1.10%. On the flip side, Bharti Airtel down by 1.55%, Reliance Industries down by 0.54%, Mahindra & Mahindra down by 0.41%, Power Grid down by 0.37% and Dr. Reddy’s Lab down by 0.35% were the top losers.

Meanwhile, India will soon be submitting a proposal at the World Trade Organisation (WTO) to start discussions on trade facilitation agreement (TFA) in services. Commerce Minister Nirmala Sitharaman has said that India had already floated the concept note for the same and is now moving further towards a proposal. She added that they will soon submit a proposal for more discussions on that. The ministerial meeting of the WTO will be held in Buenos Aires, Argentina, on December 11-14.

India vying for an agreement to promote services trade as the sector contributes over 60 percent to the Gross Domestic product (GDP) and 28 percent in the total employment. Under this, it has suggested liberalisation of rules for movement of professionals and other steps to reduce transaction costs. Highlighting the importance of the services sector in pushing the country's economic growth, the minister has said that India is organising the third 'Global Exhibition on Services (GES)' in April in Greater Noida.

India is pushing for a TFA on services to promote trade in this sector along with goods. The TFA in goods will come into force once two-thirds of members have completed their ratification process. It contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and compliance issues.

Commerce Secretary Rita Teaotia has said that the sector is very important and areas like IT, healthcare, tourism, logistics hold huge potential for trade and investments. She added that the sector accounts for 33 per cent total exports.

The CNX Nifty is currently trading at 8521.50, up by 45.70 points or 0.54% after trading in a range of 8493.95 and 8526.15. There were 32 stocks advancing against 18 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Zee Entertainment up by 3.15%, HDFC up by 2.72%, Kotak Mahindra Bank up by 1.59%, Axis Bank up by 1.55% and Yes Bank up by 1.53%. On the flip side, Idea Cellular down by 2.24%, Bharti Airtel down by 1.50%, Tech Mahindra down by 0.93%, Mahindra & Mahindra down by 0.47% and Reliance Industries down by 0.41% were the top losers.

All the Asian markets were trading in green; KOSPI Index gained 0.06%, FTSE Bursa Malaysia KLCI rose 0.17%, Shanghai Composite jumped 0.07%, Jakarta Composite increased 0.13%, Taiwan Weighted added 0.25%, Hang Seng edged higher 0.18% and Nikkei 225 was up by 1.31%.