Benchmarks trade in fine fettle in early deals; Nifty regains 8,950 mark

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Thursday with frontline gauges recapturing their crucial 28,900 (Sensex) and 8,950 (Nifty) levels. Market participants ignored US Fed’s statement that it might be appropriate to raise interest rates again fairly soon if incoming data on the labour market and inflation is in line. Traders also shrugged off the International Monetary Fund’s (IMF) statement that India’s growth is projected to slow to 6.6 percent in 2016-17 fiscal due to the strains that have emerged in the economy as a result of ‘temporary disruptions’ caused by demonetization.

On the global front, Asian markets slipped from their 19-month highs after minutes of US Federal Reserve's last monetary policy suggested many policymakers believe interest rates should be increased ‘fairly soon’. The US markets consolidated a bit and made a mixed closing in the last session following the release of the minutes of the Federal Reserve's latest monetary policy meeting.

Back home, buying in banking space too aided sentiments, as the Chief Economic Advisor (CEA) Arvind Subramanian has emphasised the need to move full steam to deal with the problem of bad loans facing banking sector. He said that the government is considering setting up a state-owned asset reconstruction company to deal with mounting bad loans. Oil and gas stocks too remained in focus, as the CEA has said that rising global oil prices will not pose a serious risk to the economy if they remain within the range of $55-65 a barrel.

The BSE Sensex is currently trading at 28932.66, up by 67.95 points or 0.24% after trading in a range of 28904.34 and 28972.79. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.38%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Telecom up by 3.75%, TECK up by 1.70%, IT up by 1.40%, Realty up by 0.72% and Consumer Durables was up by 0.53%, while Power down by 0.38%, Auto down by 0.28%, FMCG down by 0.26%, Utilities down by 0.18% and Consumer Disc was down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 5.36%, TCS up by 2.23%, Wipro up by 1.15%, Infosys up by 1.09% and GAIL India was up by 0.91%. On the flip side, ICICI Bank down by 0.89%, NTPC down by 0.84%, Tata Steel down by 0.56%, Asian Paints down by 0.54% and ITC was down by 0.49% were the top losers.

Meanwhile, quashing the rumors regarding the re-introduction of new Rs 1000 notes, Economic Affairs Secretary Shaktikanta Das has said that there is no plan to re-introduce the Rs 1,000 note and the focus is on increasing the production and supply of Rs 500 and lower denomination currency. He also said that complaints of cash shortages at ATMs are being addressed and the government has requested people to desist from withdrawing more money than they need.

He assured that enough cash is available and logistics issues of reloading ATMs are being addressed more frequently. Das urged ‘I request everyone to withdraw only the amount that is required, since excessive withdrawal of cash deprives cash for others’. In December 2016, new Rs 500 notes were released for circulation, aiming to ease the situation post demonetisation, the initiative taken by Prime Minister Narendra Modi-led government in order to curb circulation of black money in the economy.

Economic Affairs Secretary’s comments came after the report that the government will soon launch the new series of Rs 1000 denomination notes. The report also stated that the Reserve Bank of India has already started production of the new Rs 1,000 notes and that the initial plan was to introduce the new Rs 1,000 note in January but it has been delayed due to the pressing need to supply Rs 500 notes.

The CNX Nifty is currently trading at 8951.50, up by 24.60 points or 0.28% after trading in a range of 8935.40 and 8957.15. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 5.26%, Idea Cellular up by 5.15%, TCS up by 2.17%, HCL Tech up by 1.82% and Infosys was up by 1.30%. On the flip side, Grasim Industries down by 1.27%, Eicher Motors down by 1.13%, NTPC down by 0.96%, ICICI Bank down by 0.89% and Tata Steel was down by 0.77% were the top losers.

Most of the Asian markets were trading in red; Hang Seng declined 115.31 points or 0.48% to 24,086.65, Nikkei 225 decreased 59.18 points or 0.31% to 19,320.69, Shanghai Composite shed 12.84 points or 0.39% to 3,248.38, Taiwan Weighted slipped 8.68 points or 0.09% to 9,770.10 and FTSE Bursa Malaysia KLCI was down by 0.67 points or 0.04% to 1,707.41.

On the flip side, KOSPI Index increased 0.73 points or 0.03% to 2,107.34 and Jakarta Composite was up by 5.54 points or 0.1% to 5,364.22.