Indian bourses continue to trade in positive territory

Key benchmark indices continued to trade in positive territory in the afternoon session, following better-than-expected Q3 GDP data and positive Asian cues. As per the Central Statistical Office (CSO), GDP for the third quarter (Q3) of financial year 2016-17 (FY17) grew at 7%, allaying fears of any major effect of demonetisation. The Q3 numbers not only made India the fastest-growing large economy in the world but also helped the CSO retain its earlier projection (in first advance estimates) for full-year GDP growth at 7.1% in the second advance estimates released on Tuesday. The market sentiment was also underpinned by a private survey that showed Indian factory activity expanded for a second straight month in February. However, there was some cautiousness too with India's fiscal deficit touching Rs 5.64 lakh crore at the end of January, 105.7 percent of the full-year target, mainly due to lower realisation of non-tax revenue. In the Budget presented on February 1, the government had retained the fiscal deficit target at 3.5 per cent of GDP. In scrip specific development, Jindal Stainless was up by over half percent after signing a License Agreement with Defence Research & Development Organisation which entails Transfer of Technology for manufacturing High Nitrogen Steel for armour applications.

On the global front, Asian markets were trading mostly in green as attention turned to President Donald Trump’s speech to Congress for clues on what might be ahead for trade, regulations and taxes. Back home, at present, Sensex and Nifty were trading above the crucial 28,900 and 8,900 levels respectively, with gains of over half a percent. The BSE Sensex is currently trading at 28941.05, up by 197.73 points or 0.69% after trading in a range of 28824.17 and 29001.35. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Realty up by 2.41%, Healthcare up by 1.17%, Bankex up by 0.96%, IT up by 0.84% and FMCG up by 0.69%, while Oil & Gas down by 0.90%, Energy down by 0.50%, Consumer Durables down by 0.19% and PSU down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 2.63%, Sun Pharma up by 2.39%, HDFC up by 1.95%, Axis Bank up by 1.74% and Hindustan Unilever up by 1.33%. On the flip side, Tata Motors down by 1.39%, Mahindra & Mahindra down by 0.79%, Coal India down by 0.56%, NTPC down by 0.49% and Bharti Airtel down by 0.34% were the top losers.

Meanwhile, Credit rating agency, S&P ratings in its latest report has said that India’s banking sector growth and profitability are expected to improve gradually in financial year 2017-18, from the low base of the financial year 2016-17. The agency has noted sluggish recovery in industry because of low capacity utilisation in the corporate segment and the wait-and-watch approach of borrowers in some retail segments post demonetisation.

The rating agency, in its report 'Progress will be Slow for India's Banks in 2017', has said that the pace of new non-performing loan creation is likely to abate somewhat over next 12 months and due to low provision coverage and inadequate resolution of stressed assets, the banks with sizable corporate exposures will remain vulnerable.

Further S&P noted that weak profitability and rising capital demands from basel III implementation will continue to put pressure on the capitalisation of some public sector banks (PSU) in the country. It said that barring large capital infusion from the government, credit profiles of some of the PSU banks would remain vulnerable.

On loan growth, the rating agency has said that the note ban resulted in the lowest loan growth in several years and high stress on profitability and asset quality. However, it expect recovery in loan growth in the financial year 2017-18. The agency added that a likely increase in nominal GDP growth and higher commodity prices will lead to greater working capital requirements for firms.

The CNX Nifty is currently trading at 8933.75, up by 54.15 points or 0.61% after trading in a range of 8898.60 and 8950.25. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 2.69%, Sun Pharma up by 2.44%, Bharti Infratel up by 2.37%, Kotak Mahindra Bank up by 2.34% and HDFC up by 1.84%. On the flip side, BPCL down by 2.04%, Tata Motors down by 1.49%, Idea Cellular down by 1.38%, Ultratech Cement down by 1.11% and Bharti Airtel down by 0.71% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.8 points or 0.17% to 1,696.57, Shanghai Composite gained 4.16 points or 0.13% to 3,245.89, Hang Seng was up by 36.76 points or 0.15% to 23,777.49 and Nikkei 225 added 274.55 points or 1.44% to 19,393.54. On the flip side, Taiwan Weighted decreased 75.69 points or 0.78% to 9,674.78 and Jakarta Composite was down by 15.81 points or 0.29% to 5,370.88.