Markets trade with traction; banking stocks surge

Going from strength to strength, local equity markets gathered further ground on back of sustained buying activities by both funds and retail investors, despite lackluster global cues. Sentiment on the street improved with Finance Minister Arun Jaitley’s statement that the whole process of remonetisation of new notes that began after scrapping Rs 500 and Rs 1000 notes on November 8, is almost complete now and the Reserve Bank of India (RBI) is closely monitoring cash supply position on a daily basis. Arjun Ram Meghwal, Minister of State for Finance too stated that the ongoing digital push and encouragement of cashless transactions would boost the country’s gross domestic product (GDP). Besides, recovery in the rupee value also supported the sentiment. The rupee was trading strong at 67.00 in early deals on increased selling of the American currency by exporters. In scrip specific development, Zydus Cadila was up by over four and half percent after receiving the final approval from the USFDA to market Fluconazole Tablets USP in strengths of 50 mg, 100 mg, 150 mg and 200 mg and Clobetasol Propionate Spray, 0.05%.

On the global front, Asian markets 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. Back home, the BSE Sensex is currently trading at 28550.00, up by 248.73 points or 0.88% 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 0.69%, while Small cap index added 0.59%.

The top gaining sectoral indices on the BSE were Bankex up by 1.96%, Oil & Gas up by 1.04%, PSU up by 0.26%, FMCG up by 0.26% and Consumer Durables up by 0.20%, while TECK down by 0.75%, IT down by 0.74%, Metal down by 0.63%, Realty down by 0.13% and Auto down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 7.24%, Sun Pharma up by 2.43%, HDFC up by 1.72%, Cipla up by 1.63% and Lupin up by 1.24%. On the flip side, TCS down by 1.34%, Infosys down by 0.93%, Coal India down by 0.93%, Hero MotoCorp down by 0.71% and Bharti Airtel down by 0.66% were the top losers.

Meanwhile, going by its decision to absorb the Merchant Discount Rate (MDR) on debit card transactions, the Reserve Bank of India has announced that it will start reimbursing MDR charges on debit cards to banks, which were used to pay tax or non-tax dues to the government since January 1, 2017.

To get reimbursement of MDR, the RBI has asked banks to forward their claim along with statutory auditor's certificate, as in the case of agency commission claims, to RBI's Nagpur office on a quarterly basis. The central bank in its notification said that the banks will have to certify that MDR charges for transaction amounts up to Rs 1 lakh have not been collected from the payer. Further, the notification said that banks may file their claims by April 30 for the quarter ending March 2017.

MDR is the rate charged by banks to merchants for providing debit and credit card services. In order to encourage digital payment post announcement of demonetization, the government in December 2016 had decided to absorb the merchant discount rate (MDR) charges in respect of debit card transactions for making payments to it.

The CNX Nifty is currently trading at 8843.90, up by 65.90 points or 0.75% after trading in a range of 8804.25 and 8896.45. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were HDFC Bank up by 7.16%, Sun Pharma up by 2.35%, Aurobindo Pharma up by 1.97%, BPCL up by 1.95% and HDFC up by 1.79%. On the flip side, Bharti Infratel down by 3.12%, Hindalco down by 1.97%, Idea Cellular down by 1.95%, TCS down by 1.36% and Eicher Motors down by 1.32% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 112.91 points or 0.58% to 19,234.62, Hang Seng declined 96.78 points or 0.4% to 24,010.92, Jakarta Composite slipped 28.82 points or 0.54% to 5,349.18, Shanghai Composite shed 20.1 points or 0.62% to 3,209.52, Taiwan Weighted decreased 11.49 points or 0.12% to 9,759.76 and KOSPI Index was down by 1.26 points or 0.06% to 2,080.58.

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