Markets trade marginally higher in late afternoon session

Indian equity benchmarks were trading marginally higher in late afternoon session on the back of buying in TECK, Capital Goods and Realty counters. Investors remained optimistic with Union Finance Minister Arun Jaitley’s statement that the implementation of the Goods and Services Tax (GST), along with demonetisation will bring more revenues as far as states and the central government are concerned and enlarge the size as far as the formal economy is concerned. However, gains remained capped with former Finance Minister P Chidambaram’s statement that the country’s economy has been adversely impacted and the people’s sentiment has taken a hit due to the ill-conceived demonetisation drive by the Narendra Modi- Government. He said that it will take at least two years to get back to growth path again.

On the global front, European markets were trading in red following lackluster cues from Wall Street and Asia on some disappointing U.S. corporate earnings, weak GDP data and U.S. President Donald Trump's immigration ban. Asian markets were trading mixed. Back home, in scrip specific development, V2 Retail jumped higher after the company inaugurated two new retail stores at Silchar in Assam and Agartala in Tripura. OM Metals Infraprojects was trading in green after the company’s joint venture (JV), Om Metals-SPML bagged contract worth $16.58 million in Africa.

The BSE Sensex is currently trading at 27895.17, up by 12.71 points or 0.05% after trading in a range of 27813.32 and 27947.37. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.32%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were TECK up by 1.08%, Capital Goods up by 0.40%, Realty up by 0.32%, Metal up by 0.12% and FMCG up by 0.08%, while Auto down by 0.75%, Consumer Durables down by 0.55%, Bankex down by 0.54%, Oil & Gas down by 0.49% and PSU down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 10.00%, Reliance Industries up by 1.41%, Sun Pharma up by 1.20%, Dr. Reddy’s Lab up by 1.11% and Larsen & Toubro up by 0.75%. On the flip side, Tata Motors down by 1.89%, Tata Steel down by 1.19%, TCS down by 1.12%, Bajaj Auto down by 1.00% and Wipro down by 0.90% were the top losers.

Meanwhile, the global credit rating agency, Crisil in its latest report has said that the fiscal deficit target of 3 per cent for 2017-18 will be hard to hold as the debt dynamics of the country show stickiness. Further the agency stated that to help economy, there is a need to move to a range which will provide some flexibility to the government.

It stated that to maintain fiscal prudence for the next two to three years, government needs to come up with substantial steps to push up the revenues. Though, it said that the borrowing target is not expected to be very large and in line with the fiscal deficit target, adding that they are not significant or at the level that would spook the stock market and reverse the gains.

Further, agency noted that in FY17, spectrum or excise duty on oil that has led to revenue windfall are all temporary measures and may reverse in the coming fiscal. It added that the income Declaration Scheme (IDS) scheme too may not provide much support and can't continue forever.

On the current scenario, the rating agency has said that country has not been able to bring down the debt-GDP ratio which is quite high and it makes matters complicated and the government should focus on execution capacity so that the budget does not lie unused. It said that the GDP estimate is around 6.9 per cent for 2016-17.

The CNX Nifty is currently trading at 8652.30, up by 11.05 points or 0.13% after trading in a range of 8617.75 and 8662.60. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 27.82%, Bharti Airtel up by 9.76%, Grasim Industries up by 5.21%, Reliance Industries up by 1.50% and Hindalco up by 1.31%. On the flip side, Bharti Infratel down by 2.49%, Aurobindo Pharma down by 1.93%, Tata Motors - DVR down by 1.62%, Tata Motors down by 1.43% and Indusind Bank down by 1.42% were the top losers.

Asian markets were trading mixed; Jakarta Composite increased 11.24 points or 0.21% to 5,324.08. On the flip side, Nikkei 225 decreased 98.55 points or 0.51% to 19,368.85.

All European Markets were trading red; UK’s FTSE 100 decreased 39.26 points or 0.55% to 7,145.23, Germany’s DAX decreased 32.22 points or 0.27% to 11,782.05 and France’s CAC decreased 14.57 points or 0.3% to 4,825.41.