Benchmark indices continue to trade higher; RIL rallies 7%

Indian benchmark indices continued to trade higher in noon session amid covering up of short positions ahead of the February month expiry in the derivatives segment on Thursday. Also, Index heavyweight Reliance Industries made its presence felt by surging over seven percent in the session, as investors cheered the company's move to end free telecom services on its Jio platform and start charging customers from April 1. Sentiments got some support 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.  Investors got some comfort as Prime Minister Narendra Modi urged the United States to keep an open mind on admitting skilled Indian workers, in comments that pushed back against Republican President Donald Trump's 'America First' rhetoric on jobs. Indian nationals are by far the largest group of recipients of the 65,000 H-1B visas issued each year to new applicants under a cap mandated by Congress.

On the global front, Asian markets were trading mostly higher on Wednesday as investors cheered upbeat factory activity in Europe and solid earnings on Wall Street. However, the dollar dipped, reversing an earlier rise made on hawkish comments from Federal Reserve officials. Philadelphia Fed President Patrick Harker said he would likely support a quarter point rate increase at the central bank's March 14-15 meeting if the economy improves further. The Federal Reserve minutes are expected to provide more insight on the probability of an interest rate increase at the Fed's March meeting. Further, lower yields on Japanese government bonds weighed on financial stocks, which logged modest declines.

Back home, stocks from Energy, Oil & Gas and Realty counters were supporting the markets’ uptrend, while those from IT, Consumer Durables and Teck counters were adding to the underlying cautious undertone. In scrip specific development, Coal India surged after the company announced that the board will meet on March 06, 2017, to consider payment of interim dividend, if any, for the year 2016-17. Furthermore, Britannia Industries gained after the company signed a non-binding Memorandum of Understanding (MoU) with Chipita, a Greek Company for exploring certain business opportunities.

The market breadth remained optimistic, as there were 1255 shares on the gaining side against 1150 shares on the losing side, while 169 shares remained unchanged.

The BSE Sensex is currently trading at 28883.99, up by 122.40 points or 0.43% after trading in a range of 28789.30 and 28901.19. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.02%, while Small cap index up by 0.06%.

The top gaining sectoral indices on the BSE were Energy up by 3.30%, Oil & Gas up by 1.46%, Realty up by 1.36%, Telecom up by 1.23% and Bankex up by 0.46%, while IT down by 1.03%, Consumer Durables down by 0.78%, TECK down by 0.65%, Capital Goods down by 0.29% and Basic Materials down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 7.28%, Axis Bank up by 2.34%, Coal India up by 2.25%, Asian Paints up by 1.43% and Bharti Airtel up by 1.31%. On the flip side, Infosys down by 1.80%, NTPC down by 1.22%, TCS down by 1.19%, Tata Steel down by 0.84% and Power Grid down by 0.80% 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 8942.60, up by 34.75 points or 0.39% after trading in a range of 8917.10 and 8946.55. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 7.47%, Axis Bank up by 2.61%, Bosch up by 2.34%, Bharti Infratel up by 2.20% and Coal India up by 2.19%. On the flip side, Infosys down by 1.82%, NTPC down by 1.28%, TCS down by 1.24%, Grasim Industries down by 0.96% and Power Grid down by 0.95% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 0.04%, Jakarta Composite gained 0.03%, KOSPI Index increased 0.14%, Taiwan Weighted added 0.15% and Hang Seng was up by 0.7%. On the flip side, Nikkei 225 decreased 0.09% and Shanghai Composite was down by 0.02%.