Benchmarks trade in fine fettle in early deals

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on penultimate session of F&O expiry. Traders took some encouragement with a private report stating that India’s millennial population is a massive disruptive force and driven by this supportive demographics along with government's policy action, Indian economy is likely to reach $ 5 trillion by 2025. Some support also came with the government hoping to overshoot the Rs 45,500 crore disinvestment targets for the current fiscal amid strengthening of equity markets. The Finance Ministry had cleared disinvestment in two more PSUs last week.

Firm global cues too aided sentiments with Asian markets trading mostly in green at this point of time, as investors cheered upbeat factory activity in Europe and solid earnings on Wall Street. The Japanese market was however struggling amid a strengthening yen. The US markets coming after a long weekend scaled fresh record highs in the last session, amid optimism about more business friendly policies under President Donald Trump.

Back home, stocks related to banking counter edged higher, as the newly-appointed Reserve Bank deputy governor Viral V Acharya has called for some urgent steps to resolve NPAs, saying none of the “piece-by-piece approach” offered so far has worked, including the AQR, simply because of “the many discretions given to banks” as also their “skewed incentive system”. However, stocks related to infrastructure space exhibited mixed trend after Ind-Ra maintained negative outlook on infra sector for FY18.

The BSE Sensex is currently trading at 28852.59, up by 91.00 points or 0.32% after trading in a range of 28789.30 and 28880.77. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.06%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Energy up by 3.28%, Oil & Gas up by 1.68%, Power up by 0.66%, Utilities up by 0.46% and Telecom was up by 0.32%, while IT down by 0.94%, Consumer Durables down by 0.76%, TECK down by 0.72%, FMCG down by 0.22% and Healthcare was down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 7.32%, Axis Bank up by 2.56%, Asian Paints up by 1.42%, Tata Motors up by 1.07% and Coal India was up by 0.95%. On the flip side, Infosys down by 1.47%, TCS down by 1.17%, Sun Pharma down by 0.76%, Bajaj Auto down by 0.73% and Wipro was down by 0.62% were the top losers.

Meanwhile, domestic rating agency, India Ratings and Research (Ind-Ra) has maintained a negative outlook for the infrastructure sector for the next financial year, and said that the negative outlook on the three heavyweight sub-sectors that include toll roads, thermal and wind continues to pull the overall sector outlook down.
As per its special report on FY18 Infrastructure Sector Credit Outlook, among the individual sectors, the negative rating continued for the third consecutive year for toll roads on the expectation of sluggish traffic growth. For the thermal power sector also it has maintained negative outlook, mainly due to suboptimal plant load factors, lack of interest for long-term power purchase agreements which has been compounded by low priority in power scheduling.

The ratings agency has maintained a stable outlook on solar and seaports due to the reasonably established payment profile of state utilities (barring a few) and growth-led cargo throughput volumes. Further, it has revised the outlook for airports to positive for FY18 from stable in FY17, based on the solid fundamentals of air passenger volumes, underpinned by moderate fuel prices (although higher than 2016 levels) and favorable policy actions. However, the outlook for wind energy turned negative from a stable rating in the last two years.

Ind-Ra added that a reduction in interest rates and the stability of the Indian rupee can help ease the overall pressure on projects’ cash flow while a pick-up in economic activity will have a salutary effect on traffic volumes and energy demand, leading to portfolio-wide increases in coverage metrics.

The CNX Nifty is currently trading at 8928.50, up by 20.65 points or 0.23% after trading in a range of 8917.10 and 8939.85. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 7.14%, Axis Bank up by 2.65%, Bharti Infratel up by 1.66%, Asian Paints up by 1.37% and Tata Power was up by 1.25%. On the flip side, Infosys down by 1.54%, TCS down by 1.34%, Wipro down by 0.87%, Eicher Motors down by 0.83% and Sun Pharma was down by 0.77% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 0.51 points or 0.03% to 1,707.06, Jakarta Composite gained 1.75 points or 0.03% to 5,342.74, KOSPI Index increased 3.62 points or 0.17% to 2,106.55, Taiwan Weighted added 13.93 points or 0.14% to 9,777.86 and Hang Seng was up by 197.58 points or 0.82% to 24,161.21.

On the flip side, Nikkei 225 decreased 8.16 points or 0.04% to 19,373.28 and Shanghai Composite was down by 4.97 points or 0.15% to 3,248.35.