Benchmarks trade near intra-day high level in noon session

Indian benchmark indices extended early gains to continue firm trade in noon session, hovering near intra-day high level, on the back of sustained buying in several blue chip stocks. Both Bombay Stock Exchange (BSE) Sensex and National Stock Exchange (NSE) Nifty are trading well above their psychological levels of 29,100 and 8,950. Sentiments got a boost with Moody's Investors Service’s latest report stating that demonetisation will be credit positive for India as it is likely to reduce tax avoidance and corruption. The agency however projected growth to slow to 6.4% in the January-March quarter, from 7% in the previous three months. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Some support also came with Bank of America Merrill Lynch’s (BofAML’s) report stating that India is expected to clock a GDP growth of 6.9 percent this financial year, which is likely to recover to 7.2 per cent in 2017-18. The global financial services major also said rate cuts hold the key to recovery and expects a 50-70 bps reduction in lending rates by banks by September. Meanwhile, shares of domestic aluminium and steel produces gained traction after China ordered producers in 28 cities to slash output during winter, as Beijing intensifies its war on smog. 

On the global front, Asian markets were trading mostly higher on Thursday, tracking the strong gains overnight on Wall Street after US President Donald Trump's address to a joint session of Congress. While Trump's speech provided few specifics on his plans for tax reform and replacing Obamacare, investors were relieved that he struck a softer, more optimistic tone. Further, Japan's Nikkei share average hit a 14-month high as the dollar gained against the yen on rising expectations the US Federal Reserve will hike interest rates in March.

Back home, stocks from Auto, Basic Materials and Metal counters were supporting the markets’ uptrend, while those from Realty, Healthcare and Utilities counters were adding to the underlying cautious undertone. In scrip specific development, Tata Motors gained after the company reported 2% increase in total passenger and commercial vehicle sales in February at 47,573 units compared to 46,674 in the same month last year. On the other hand, Wockhardt declined after the company said that its step-down unit in the US, Morton Grove Pharmaceuticals Inc, has received a warning letter from the US Food and Drug Administration (USFDA).

The market breadth remained optimistic, as there were 1467 shares on the gaining side against 1028 shares on the losing side, while 148 shares remained unchanged.

The BSE Sensex is currently trading at 29144.54, up by 160.05 points or 0.55% after trading in a range of 29062.07 and 29144.54. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index up by 0.43%.

The top gaining sectoral indices on the BSE were Auto up by 1.31%, Industrials up by 1.13%, Metal up by 0.96%, Basic Materials up by 0.92% and Capital Goods up by 0.75%, while Realty down by 1.21%, Healthcare down by 0.11% and Utilities down by 0.08% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.53%, ICICI Bank up by 1.79%, Hero MotoCorp up by 1.63%, Bajaj Auto up by 1.50% and Coal India up by 1.03%. On the flip side, Sun Pharma down by 1.17%, Dr. Reddys Lab down by 0.93%, NTPC down by 0.84%, Power Grid down by 0.49% and ITC down by 0.26% were the top losers.

Meanwhile, in order to meet the financial requirements of huge pipeline of projects, Finance Minister Arun Jaitley has pitched for increase in funding for India from International Bank for Reconstruction and Development (IBRD), a part of the World Bank Group. FM emphasized on the need for capital expansion in the World Bank Group as well as on the need for developing countries like India to have more voting right at the multilateral lender.

While noting that India has decided to seek the aid only through IBRD and cease the funding from International Development Agency (IDA), the finance minister said that an increase in IBRD support is imperative to meet India’s current requirement of $ 5-7 billion and for a huge pipeline of projects.

Jaitley also urged the World Bank to lower its effective rate of interest on loans by removing the commitment charges levied on the undisbursed loans. Further, he suggested that the World Bank should explore innovative financing options and should relax the requirement of Sovereign Guarantee for loans to AAA rated organisations.

The CNX Nifty is currently trading at 8989.70, up by 43.90 points or 0.49% after trading in a range of 8969.80 and 8992.50. There were 37 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.46%, Tata Motors - DVR up by 3.08%, Ultratech Cement up by 2.84%, Hero MotoCorp up by 1.88% and Hindalco up by 1.80%. On the flip side, BPCL down by 1.38%, Idea Cellular down by 1.32%, Sun Pharma down by 1.21%, Dr. Reddy’s Lab down by 0.97% and NTPC down by 0.97% were the top losers.

Asian markets were trading higher barring the Shanghai Composite which was tad down by 0.06%. On the other hand, Taiwan Weighted was up by 0.06%, KOSPI Index gained 0.63%, FTSE Bursa Malaysia KLCI was higher by 0.86%, Jakarta Composite increased by 0.98%, Hang Seng moved up by 0.49% and Nikkei 225 surged by 0.95%.