Benchmarks continue firm trade; Nifty holds 8800 mark

Indian equity benchmarks continued their firm trade in late morning session on account of buying in frontline blue chip counters. Traders took support with Finance Minister Arun Jaitley’s statement that situation is normal as far as remonetisation is concerned and RBI is monitoring cash position on a daily basis. Minister of State for Finance Arjun Ram Meghwal too has said that demonetisation of old high value currency and the government’s push towards digital economy will definitely expand India’s GDP. He also said that India was on the verge of a transition from a large cash economy to a less cash and digital economy. However, the upside was capped with domestic rating agency, India Ratings and Research (Ind-Ra) report which doesn’t expects the performance of Indian companies to improve substantially in FY18. Pick-up in capital expenditure by the private sector is at least another two fiscal years away. Rise in commodity prices and uptick in interest rates amid rate hikes globally are two important risks to slow-but-improving demand for FY18. Traders were seen piling position in Bankex, Oil & Gas and Consumer Durables stocks, while selling was witnessed in IT, TECK and Metal sector stocks. In scrip specific development, Biocon was trading in green after the Bangalore-based drugmaker informed that the US Food and Drug Administration (FDA) has accepted Mylan’s Biologics License Application (BLA) for MYL-1401H, a proposed biosimilar to Neulasta (pegfilgrastim), an anti cancer drug. Mylan is Biocon’s partner for biosimilar development. HDFC Bank was trading firm after the Reserve Bank of India removed restrictions and allowed foreign investors to buy more shares in the bank with immediate effect.

On the global front, Asian shares were trading mostly in red, as investors booked profits, while the dollar inched up after Thursday’s slide and optimism over possible renewed supply cuts by OPEC lifted oil prices. Singapore revised its fourth-quarter gross domestic product growth sharply higher. Earlier in the week, Taiwan raised its 2017 economic growth target to a three-year high, Indonesia’s January exports rose at the fastest pace in more than five years and China’s January inflation picked up by more than expected to near six-year highs. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,800 and 28,400 levels respectively. The market breadth on BSE was positive in the ratio of 1326:916, while 130 scrips remained unchanged.

The BSE Sensex is currently trading at 28463.71, up by 162.44 points or 0.57% after trading in a range of 28431.61 and 28726.26. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Bankex up by 1.50%, Oil & Gas up by 0.60%, Consumer Durables up by 0.15%, FMCG up by 0.08% and Realty up by 0.05%, while IT down by 1.15%, TECK down by 1.10%, Metal down by 0.80%, Auto down by 0.31% and Power down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 6.60%, Sun Pharma up by 1.85%, HDFC up by 1.70%, Lupin up by 1.15% and Cipla up by 0.94%.

On the flip side, Coal India down by 1.73%, TCS down by 1.54%, Infosys down by 1.39%, Hero MotoCorp down by 1.28% and Maruti Suzuki down by 0.92% were the top losers.

Meanwhile, the American thinktank, Heritage Foundation in its latest report titled ‘2017: Index of Economic Freedom’ has reported that India slipped by 3.6 points to 143rd rank from 123rd rank last year. The overall score of India was 52.6 points in the index, behind its several South Asian neighbours. The report classified India in the ‘mostly unfree’ economies category, citing uneven progresses on market-oriented reforms.

The thinktank has said that despite India sustaining an average annual growth of about 7 per cent over the past five years, growth is not deeply rooted in policies that preserve economic freedom. The report stated that the state maintains an extensive presence in many areas through public-sector enterprises. A restrictive and burdensome regulatory environment discourages the entrepreneurship that could provide broader private-sector growth. It also said that India has technology and manufacturing sectors as advanced as any in the world as well as traditional sectors characteristic of a lesser developed economy. Extreme wealth and poverty coexist as the nation both modernises rapidly and struggles to find paths to inclusive development for its large and diverse population.

The report noted that India is a significant force in world trade, but corruption, underdeveloped infrastructure, and poor management of public finance undermine overall development. The thinktank, however, credited Prime Minister Narendra Modi with reinvigorating India’s foreign policy. It said Modi, who in June 2016 made his fourth visit to the US in two years, has bolstered bilateral ties, particularly in defence cooperation.

As per the report, Hong Kong, Singapore and New Zealand topped the index. India’s neighbours Nepal (125), Sri Lanka (112), Pakistan (141), Bhutan (107), and Bangladesh (128) were ranked higher than India, while only Afghanistan (163) and Maldives (157) were ranked below India. Also, China with a score of 57.4 points, an increase of 5.4 points compared to previous year was placed at 111 position and the United States was ranked 17 with 75.1 points.

The CNX Nifty is currently trading at 8818.45, up by 40.45 points or 0.46% after trading in a range of 8804.25 and 8896.45. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were HDFC Bank up by 6.68%, Sun Pharma up by 2.03%, HDFC up by 1.86%, IndusInd Bank up by 1.69% and Bosch up by 1.30%.

On the flip side, Bharti Infratel down by 3.48%, Idea Cellular down by 3.01%, Coal India down by 2.04%, Hindalco down by 1.94% and TCS down by 1.64% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 124.67 points or 0.64% to 19,222.86, Hang Seng decreased 111.09 points or 0.46% to 23,996.61, Jakarta Composite decreased 28.82 points or 0.54% to 5,349.18, Shanghai Composite decreased 20.48 points or 0.63% to 3,209.13, Taiwan Weighted decreased 14.83 points or 0.15% to 9,756.42 and KOSPI Index decreased 4.36 points or 0.21% to 2,077.48.

On the other hand, FTSE Bursa Malaysia KLCI increased 1.86 points or 0.11% to 1,709.45.