Benchmarks make cautious start; broader markets outperform

The benchmark indices have made a cautious start and are trading slightly in green in early deals on Monday, as uncertainty over US fiscal and monetary policies kept the momentum tepid. However, broader market, the BSE Midcap and BSE Smallcap indices are outperforming the headline indices adding around half a percent each. Overall sentiments remained up-beat, as traders took encouragement with report that the GST Council in a meeting during weekend cleared the law for compensating states for loss of revenue that they may incur during implementation of Goods and Service Tax. The council’s nod has paved the way for the law to be tabled in Parliament in the second half of the budget session beginning March 9.

On the global front, Asian markets were trading mostly in green at this point of time taking cues from the US markets, though the Japanese index was down for a third straight session after the yen dropped after a three-day gain. The US markets ended at fresh record highs despite a choppy session, although traders seemed somewhat reluctant to make significant moves, to get a head start on the long holiday weekend.

Back home, telecom stocks are ringing loud on report that Reliance Communications and the Tata Group have initiated talks to explore a possible union that could see Tata Teleservices joining forces with the merged RCom-Aircel and MTS. Banking stocks too remained on buyers’ radar with an Arcil official stating that once the Insolvency and Bankruptcy Bill is passed, the sale of bad loans to asset reconstruction companies (ARCs) could improve substantially to 30-35 per cent of the loans put on the block by banks and financial institutions from the current 10-15 per cent.

The BSE Sensex is currently trading at 28496.74, up by 27.99 points or 0.10% after trading in a range of 28419.27 and 28512.31. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.48%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were Telecom up by 1.98%, Consumer Durables up by 0.91%, TECK up by 0.71%, Healthcare up by 0.64% and Oil & Gas was up by 0.51%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Bharti Airtel up by 2.37%, GAIL India up by 1.86%, TCS up by 1.44%, Hindustan Unilever up by 1.38% and Sun Pharma up by 0.99%. On the flip side, HDFC down by 0.69%, ITC down by 0.58%, Maruti Suzuki down by 0.51%, Mahindra & Mahindra down by 0.37% and Axis Bank down by 0.34% were the top losers.

Meanwhile, a joint study carried out by the Associated Chambers of Commerce & Industry of India (Assocham) and global advisory firm Ernst & Young (EY), has stated that the government's demonetisation move has led to widespread adoption of online payment and is expected to have a positive long term impact on the economy through better tax compliance, increase in the tax to GDP ratio and higher tax collections. It also highlighted that improved governance, favourable conditions to conduct business, transparency in government procedures and responsive policy making with an immediate focus on effective implementation of reforms will continue to evolve India into a preferred destination for foreign investment.

The Assocham-EY study titled 'India: Transforming through radical reforms' noted that India is set on a growth trajectory that promises all-round development, economic welfare and strong macroeconomic indicators. All these radical reforms are acting as enablers for boosting the domestic environment which in turn is improving the country's stature globally. However, it said that the government needs to continuously invest in improving the ease of doing business environment, develop sound infrastructure and ensure availability of trained workforce.

As per the report, combining demonetisation with Digital India and Pradhan Mantri Jan Dhan Yojana will ensure transparency in financial transactions. It also said that the GST (goods and services tax) which is expected to be rolled out by July 2017, will further boost the economy by simplifying the indirect tax structure, and eliminating the cascading effect of taxes on customers and make doing business easier in the country. It added that the ceasing of major proportion of unaccounted currency would reduce the government liabilities and add to its finances. Besides, the surplus liquidity in the banking system will lower borrowing costs and increase the access to credit.

The CNX Nifty is currently trading at 8833.45, up by 11.75 points or 0.13% after trading in a range of 8809.80 and 8834.25. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 3.92%, Bharti Airtel up by 2.40%, GAIL India up by 1.75%, Hindustan Unilever up by 1.65% and TCS up by 1.48%. On the flip side, Yes Bank down by 1.00%, Hindalco down by 0.90%, HDFC down by 0.81%, ITC down by 0.62% and Mahindra & Mahindra down by 0.57% were the top losers.

Asian markets were trading mostly in green; KOSPI Index rose 1.82 points or 0.09% to 2,082.40, FTSE Bursa Malaysia KLCI gained 3.46 points or 0.2% to 1,711.14, Jakarta Composite increased 13.45 points or 0.25% to 5,364.38, Shanghai Composite surged 25.25 points or 0.79% to 3,227.33, Nikkei 225 added 34.43 points or 0.18% to 19,269.05 and Hang Seng was up by 78.11 points or 0.33% to 24,111.85. On the flip side, Taiwan Weighted was down by 9.4 points or 0.1% to 9,770.52.