Markets continue to hold the gains; Nifty above 9200 level

Indian markets are holding their gains towards the mid of the session, while there is hardly any sign of profit taking at the high points of the day, the continuous buying in the midcaps are supporting the markets to hold their crucial bastion. Though, the Asian peers continue to show a mixed trend, buying in metal and energy stocks at the domestic front has been supporting the markets. Meanwhile, after the parliament passed the crucial GST bills in early April, the Centre and states are set to brainstorm on specific items that will come under the various slabs under the Goods and Services Tax (GST) regime in a two day scheduled meeting on May 18-19. There is pressure on the government to fix the service tax rate on financial products at 12%, a lower rate will boost financial inclusion and bolster savings. A fitment committee headed by revenue secretary Hasmukh Adhia has already deliberated on contentious issues with state officials. Back on street, the broader markets continue to outperform the benchmarks and are up by over a percent. On the sectoral front, metal, banking, finance and power have taken the lead, while none of the sectoral indices were showing any sign of fatigue. In scrip specific development, Coal India was down by over a percent on concerns over limited divestment in the company. Recently Coal Controller’s Organization has downgraded 177 of Coal India’s 413 mines, potentially impairing the monopoly miner’s profitability.

The BSE Sensex is currently trading at 29651.40, up by 237.74 points or 0.81% after trading in a range of 29487.78 and 29701.19. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap index was up by 1.04%, while Small cap index gained 1.08%.

The top gaining sectoral indices on the BSE were Power up by 1.67%, Utilities up by 1.67%, Basic Materials up by 1.43%, Metal up by 1.42% and Bankex up by 1.31%.

The top gainers on the Sensex were Adani Ports & SEZ up by 3.70%, ICICI Bank up by 3.16%, NTPC up by 2.36%, SBI up by 1.81% and GAIL India up by 1.77%. On the flip side, Coal India down by 1.43%, Bharti Airtel down by 0.70%, Sun Pharma down by 0.40%, Bajaj Auto down by 0.26% and Mahindra & Mahindra down by 0.24% were the top losers.

Meanwhile, reversing the growth trend, the cash-intensive microfinance institutions’ (MFIs) securitisation volumes fell for the first time in two years on account of the impact of demonetisation. The credit rating agency, ICRA in its latest report has said that securitization volumes have declined by over 20 per cent to around Rs 7,150 crore in fiscal 2017 compared to Rs 9,000 crore last year.

As per ICRA’s report, MFIs including some Small Finance Banks raised nearly Rs 5,500 crore through the securitisation route in the first six months of fiscal 2017, while only around Rs 1,650 crore was raised in the second half of the fiscal, resulting in total securitisation volumes of around Rs 7,150 crore for the full year.

Noting that the dip in micro loan securitisation volumes is primarily due to the impact of the demonetisation event on the portfolio of most MFIs, ICRA said that investors also adopted a wait and watch approach for this asset class on the back of a rapid increase in the portfolio at risk numbers in the softer delinquency buckets, and the uncertainty around the portfolio performance going forward.

The credit agency has reported that the unexpected demonetisation also had a more pronounced impact on this asset class due to high reliance on cash for both collections and disbursements to MFI borrowers. The unavailability of legal tender with the borrower resulted in loan repayments being severely impacted. Besides, it said that local political interference and rumours of loan waiver in some areas of the country led to further disruption in collection process, which was primarily seen in states where local body or assembly elections were due.

The CNX Nifty is currently trading at 9209.60, up by 70.30 points or 0.77% after trading in a range of 9159.70 and 9217.90. There were 41 stocks advancing against 9 stocks declining, while one stock remained unchanged on the index.

The top gainers on Nifty were Hindalco up by 4.05%, Adani Ports & SEZ up by 3.75%, ICICI Bank up by 2.94%, Bank Of Baroda up by 2.39% and NTPC up by 2.32%. On the flip side, Coal India down by 1.49%, Bharti Airtel down by 0.82%, Sun Pharma down by 0.41%, Kotak Mahindra Bank down by 0.35% and Ambuja Cement down by 0.34% were the top losers.

The Asian markets were showing mixed trend, KOSPI Index was up by 4.42 points or 0.21% to 2,150.18, FTSE Bursa Malaysia KLCI was higher by 4.74 points or 0.27% to 1,738.67, Taiwan Weighted increased by 30.16 points or 0.31% to 9,746.56, Jakarta Composite gained 37.99 points or 0.68% to 5,615.47 and Nikkei 225 was up by 59.13 points or 0.32% to 18,414.39.

On the other hand, Hang Seng slumped by 206.3 points or 0.85% to 24,055.36 and Shanghai Composite was lower by 5.8 points or 0.18% to 3,216.37.