Indian benchmarks extend gain for second straight session; Nifty ends above 9100 mark

Indian equity benchmarks carried forward their northbound journey for yet another session on Friday, as lenders such as SBI surged after Finance Minister Arun Jaitley promised a solution to the growing NPA problem within next few days. Jaitley also said the government is keen to roll out the GST on July 1 and other aspects like bringing petroleum and land under its ambit will be considered after the first year of implementation of the new system of indirect tax collection. Further, mutual fund managers seem to be bullish on bank shares as they raised their allocation in the sector to an all-time high of over Rs 1.2 lakh crore at the end of February, primarily on account of cheaper valuations. Meanwhile, some support also came with the report that EPFO trustees will meet on March 30 to discuss whether to increase its investments in ETFs to 15% of investible deposits in 2017-18, from the current 10%. Investors also got some comfort with External Affairs Minister Sushma Swaraj's statement that there was no reason to worry about the curbs on H1B visas or the job security of Indian IT professionals working in the US for the time being, as the Indian government was in talks with the US regarding this. Furthermore, strengthening of rupee against the dollar also supported the sentiments. However, gains remained capped on the report that the current account deficit (CAD) widened to $ 7.9 billion or 1.4% of GDP in the October-December quarter on account of higher trade deficit. Also, the Reserve Bank reported that the country added $ 14.2 billion in foreign exchange reserves on the balance of payment basis during the first nine months of the outgoing financial year, which is marginally down from $ 14.6 billion accretion in the year-ago period.

On the global front, Asian equity markets ended mostly higher on Friday, though most of the investors await a delayed vote on US healthcare reform, which is seen as a proxy for the success of Donald Trump's pro-growth agenda. Japanese market ended higher as the yen weakened against the dollar and banks posted strong gains after recent selling. The latest survey from Nikkei revealed that activity in Japan's manufacturing sector continued to expand in March, albeit at a slower rate, with a PMI score of 52.6, down from 53.3 in February. Further, Chinese shares rose as strong gains in the infrastructure sector offsetting concerns over tightening liquidity in the country's banking system, increased regulation and fresh curbs on property investment. Meanwhile, European stocks fell for the third time in four days, moving further away from a 15-month high they reached just a week ago.

Back home, after getting a firm start, the local indices soon capitalized on the momentum and touched intraday highs in late morning session. However, the indices failed to hold onto the highs and receded to intraday lows in late afternoon trades post weak European market opening and on reports that widespread adoption of Aadhaar numbers and linkages to Unique Identification (UID) programme databases for authenticating sensitive transactions should give pause to India's foreign policy and military planners. Eventually, the NSE's 50-share broadly followed index Nifty, got buttressed by around quarter percent to settle above the crucial 9,100 support level, while Bombay Stock Exchange's Sensitive Index-Sensex accumulated around hundred points and closed above the psychological 29,400 mark. The market breadth remained pessimistic, as there were 1345 shares on the gaining side against 1474 shares on the losing side, while 217 shares remained unchanged.

Finally, the BSE Sensex surged 89.24 points or 0.30% to 29421.40, while the CNX Nifty was up by 21.70 points or 0.24% to 9,108.00.

The BSE Sensex touched a high and a low of 29539.85 and 29350.17, respectively and there were 15 stocks on gainers side as against 15 stocks on the losers side on the index.

The broader indices ended mixed; the BSE Mid cap index declined by 0.03%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Bankex up by 1.23%, PSU up by 0.97%, Energy up by 0.40%, Realty up by 0.39% and Consumer Durables up by 0.37%, while IT down by 0.81%, TECK down by 0.68%, Basic Materials down by 0.33%, Healthcare down by 0.29% and Auto down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.90%, SBI up by 2.81%, GAIL India up by 1.17%, ITC up by 1.13% and Reliance Industries up by 0.95%. On the flip side, TCS down by 1.31%, Lupin down by 0.94%, Bajaj Auto down by 0.93%, Infosys down by 0.85% and ONGC down by 0.83% were the top losers.

Meanwhile, in order to deal with the major problem of banks' non-performing assets (NPAs), Finance Minister Arun Jaitley has said that the government is going to announce a policy to push for the quick settlement of NPA at banks in a couple of days and added that the decision will be taken in tandem with the Reserve Bank of India (RBI).

Jaitley has said that although the NPA amounts are large, the major ones are restricted to a limited number of companies. He further added that the problem of big NPAs is confined to essentially 30-50 companies and therefore those 30-50 accounts need to be resolved.

To tackle this problem the RBI has set up an oversight committee to look into process of cases referred to it by different banks and seeing the response and its performance, the government is also considering increasing such committees. NPAs of public sector banks (PSBs) rose by about Rs 1 lakh crore during the April-December period of 2016-17, the bulk of which are accounted for by the infrastructure sector - power, steel, roads - and textiles.

The CNX Nifty traded in a range of 9,133.55 and 9,089.40. There were 22 stocks in green as against 29 stocks in red on the index.

The top gainers on Nifty were Bank of Baroda up by 3.76%, ICICI Bank up by 3.22%, SBI up by 2.77%, Gail up by 1.43% and Kotak Mahindra Bank up by 1.19%. On the flip side, Grasim Industries down by 2.94%, Tech Mahindra down by 2.03%, ZEEL down by 1.34%, TCS down by 1.31% and Ambuja Cement down by 1.27% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 3.88 points or 0.05% to 7,336.83, Germany’s DAX decreased 7.02 points or 0.06% to 12,032.66 and France’s CAC decreased 17.57 points or 0.35% to 5,015.19.

Asian equity markets ended mostly in green on Friday after US markets ended flat overnight, showing little reaction to the postponement of a key vote on President Donald Trump's replacement healthcare plan intended to repeal and replace the Affordable Care Act. Underlying sentiment remained positive amid bets that the delayed vote would go ahead later in the day. Failure to pass it would cast doubt on Trump's ability to deliver on promises of increased infrastructure spending, tax cuts and deregulation. Japanese shares recovered from a weak start to close higher as the yen weakened against the dollar and banks posted strong gains after recent selling. The latest survey from Nikkei revealed that activity in Japan's manufacturing sector continued to expand in March, albeit at a slower rate, with a PMI score of 52.6, down from 53.3 in February. Further, Chinese shares rose as strong gains in the infrastructure sector offsetting concerns over tightening liquidity in the country's banking system, increased regulation and fresh curbs on property investment.