Benchmark indices continue to trade higher; banking counters lead

Indian equity benchmarks continued to trade firm in noon session with official result session coming to an end and the investors are reshuffling their portfolios according to the company’s performance during Q3FY17. Off the day’s high, but still Sensex and Nifty were trading above the crucial 28,500 and 8,800 levels respectively, with gains of over half a percent. Moreover, broader indices too were trading with decent amount of gains. Sentiments got a boost after Reserve Bank of India (RBI) governor Urjit Patel said India was at a ‘good place’ in terms of financial stability and the central bank will manage any sharp volatility in the markets arising out of global developments including concerns over U.S. President Donald Trump's protectionist policies.  He also said RBI is looking beyond the headline inflation figures and is focusing on core inflation trends, which excludes more volatile food and fuel prices, to guide RBI's policy moves. Adding the optimism among investors, Arjun Ram Meghwal, Minister of State for Finance said the ongoing digital push and encouragement of cashless transactions would boost the country’s gross domestic product (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, weak trend in Asian stocks coupled with depreciation in rupee value have limited the gains. Some investors remained nervous with domestic rating agency, India Ratings and Research’s (Ind-Ra’s) report, which doesn’t expect 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.

On the global front, Asian markets were trading mostly weak on Friday as investors took profits, while the dollar inched up after Thursday's slide and optimism over possible renewed supply cuts by OPEC lifted oil prices. A batch of positive economic data out of Asia this week, driven by improving exports and rising commodity prices, has bolstered shares, although concerns linger that any protectionist threats posed by US President Donald Trump could reverse the recovery. Overnight, Wall Street put in a mixed performance, with the Dow Jones Industrial Average barely eking out its sixth straight record high, while the S&P 500 and Nasdaq snapped a seven-day winning streak as investors paused their buying to digest recent gains.

Back home, stocks from Banking, Oil & Gas and FMCG counters were supporting the markets’ uptrend, while those from IT, Metal and Consumer Durables counters were adding to the underlying cautious undertone. In scrip specific development, HDFC Bank rallied after the RBI allowed overseas investors to buy stake in the bank as the foreign shareholding in the bank went below the prescribed limit. Furthermore, Cadila Healthcare surged after the company received US Food and Drug Administration (USFDA) clearance for its Gujarat plant after an inspection.

The market breadth remained optimistic, as there were 1404 shares on the gaining side against 1016 shares on the losing side, while 160 shares remained unchanged.

The BSE Sensex is currently trading at 28512.94, up by 211.67 points or 0.75% 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 0.52%, while Small cap index up by 0.54%.

The top gaining sectoral indices on the BSE were Bankex up by 1.69%, Oil & Gas up by 0.88%, FMCG up by 0.27%, PSU up by 0.09% and Capital Goods up by 0.04%, while IT down by 0.99%, TECK down by 0.91%, Metal down by 0.88%, Auto down by 0.19% and Realty down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 6.88%, Sun Pharma up by 2.09%, HDFC up by 1.98%, Lupin up by 1.10% and Cipla up by 0.82%. On the flip side, TCS down by 1.43%, Infosys down by 1.29%, Hero MotoCorp down by 1.06%, Coal India down by 0.99% and SBI down by 0.83% were the top losers.

Meanwhile, President Pranab Mukherjee has given approval to change government of India, Allocation of Business Rules, 1961, to delegate work of ‘Promotion of Digital Transactions including Digital Payments’ to the Ministry of Electronics and Information Technology (MeitY). As per the new rules, IT Ministry will oversee the works relating to promote digital transactions. The Ministry will promote e-governance for empowering citizens, promoting inclusive and sustainable growth of the electronics, information technology and information technology-enabled services industries, enhancing efficiency through digital services and ensuring a secure cyber space. 

Especially after demonetization old Rs 500 and 100 notes, the central government is stressing upon digital payment and taking various steps in this regard. In February last year, the Union Cabinet headed by Prime Minister Narendra Modi had given nod for introduction of steps for promotion of payments through cards and digital means with an aims to reducing cash transactions. Besides, the Centre had in December 2016 decided on a package of incentives and measures for promotion of digital and cashless economy in the country. 

Meanwhile, promotion of payments through cards and digital means will be instrumental in reducing tax avoidance, migration of government payments and collections to cashless mode, discourage transactions in cash by providing access to financial payment services to the citizens to conduct transactions through card or digital means and shifting payment ecosystem from cash dominated to non-cash/less cash payments.

The CNX Nifty is currently trading at 8828.35, up by 50.35 points or 0.57% 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 6.80%, Sun Pharma up by 2.15%, HDFC up by 1.94%, BPCL up by 1.68% and Indusind Bank up by 1.48%. On the flip side, Bharti Infratel down by 3.18%, Hindalco down by 2.32%, Idea Cellular down by 1.85%, Eicher Motors down by 1.57% and BHEL down by 1.53% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 0.66%, Hang Seng decreased 0.54%, Jakarta Composite fell 0.51%, Shanghai Composite shed 0.67%, Taiwan Weighted slipped 0.12% and KOSPI Index was down by 0.11%. On the flip side, FTSE Bursa Malaysia KLCI was up by 0.10%.