Indian equity indices continue firm trade in noon session

Indian equity benchmarks continued to trade firm in noon session on sustained buying by domestic institutional investors amid firm Asian cues. Sentiments got some support with the report that a normal monsoon this year should continue to revive rural demand and allow the RBI to cut rates by 25 bps in August. According to the report, rural demand is already reviving and the autumn kharif farm income has jumped by 26 per cent last year. The central bank, in its monetary policy review meet on April 6, kept the repurchase or repo rate -- at which it lends to banks -- unchanged at 6.25%. However, gains remained capped with Chief Economic Adviser Arvind Subramanian’s statement that India’s high economic growth rate last fiscal may not reflect the actual impact of demonetisation particularly on the informal sector and it may take a few months to assess its real fallout.  Meanwhile, sugar stocks gained tractions after the government decided to extend stock limits on sugar traders by another six months till October 2017 to check sweetener prices that are ruling at Rs 42-44 per kg. The move will enable state governments to impose stock limits and licensing requirements in respect of sugar. Furthermore, private sector banks witnessed selling pressure after lower than expected result posted by two leading private banks namely Yes Bank and IndusInd Bank, while good buying was observed in PSU banks after New NPA policy received in-principle nod as Prime Minister's Office, Finance Ministry and RBI reached a consensus.

On the global front, Asian markets were trading mostly higher on Thursday after crude oil prices rebounded from an overnight sell-off and Japan reported stronger-than-expected exports in March. Besides, easing tensions over North Korea too helped brighten the mood after weeks of jitters over the US response to Pyongyang's missile tests and nuclear weapons program. Meanwhile, US markets made a mixed closing in last session, as traders reacted to the latest earnings news as well as a steep drop by the price of crude oil.

Back home, stocks from Realty, Consumer Durables and Basic Materials counters were supporting the markets’ uptrend, while those from Banking counters were adding to the underlying cautious undertone. In scrip specific development, YES Bank declined as the asset quality of the bank slipped, with gross NPAs or bad loans rising to 1.52% of gross advances as on March 31, 2017, as against 0.85% in previous quarter and 0.76% a year ago. Net NPAs rose to 0.81% of net loans disbursed from 0.29% earlier. However, Jay Bharat Maruti surged after the company reported a rise of 72.06% in its net profit at Rs 20.75 crore for the quarter ended March 31, 2017 as compared to Rs 12.06 crore for the same quarter in the previous year.

The market breadth remained optimistic, as there were 1747 shares on the gaining side against 728 shares on the losing side, while 137 shares remained unchanged.

The BSE Sensex is currently trading at 29416.44, up by 79.87 points or 0.27% after trading in a range of 29341.68 and 29442.24. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.69%, while Small cap index up by 0.97%.

The top gaining sectoral indices on the BSE were Realty up by 1.78%, Consumer Durables up by 1.16%, Basic Materials up by 1.15%, Industrials up by 0.78% and PSU up by 0.66%, while Bankex down by 0.29% was the sole losing index on BSE.

The top gainers on the Sensex were GAIL India up by 4.10%, HDFC up by 2.36%, ONGC up by 1.50%, Adani Ports & SEZ up by 1.40% and HDFC Bank up by 0.96%. On the flip side, ICICI Bank down by 2.14%, Axis Bank down by 1.59%, Sun Pharma down by 0.58%, Power Grid down by 0.54% and Coal India down by 0.30% were the top losers.

Meanwhile, Chief Economic Adviser Arvind Subramanian has said that it may take few months to evaluate the real fallout of Modi government’s decision to withdraw high-denomination currency notes from circulation. He also pointed out that India’s high GDP growth rate in the previous financial year may not reflect the actual impact of note ban mainly on the informal sector.

However, Subramanian has stated that the impact of the sudden withdrawal of over 86 per cent of Indian currency is pretty much over as the newly- printed Rs 500 and Rs 2,000 notes hit the banking system, replacing the old Rs 500 and Rs 1,000 notes that were cancelled overnight on November 8, last year. On the GDP front, he said that the country is projected to have clocked a surprising 7.1 per cent growth in the financial year 2016-17 with a 7 per cent growth rate in the October-December quarter, notwithstanding demonetization.

He further said that the informal sector, which does the bulk of its transactions in cash, had borne the biggest brunt of demonetization. He also said that the full impact of demonetization will only be known over the course of the next few months, except for the impact on the informal sector, which they do not think that they are really going to get a handle on at all. He also conceded that the government's decision to demonetize high-denomination notes was a step towards digitization and broadening of the tax base. Adding further, he said that it is really about creating an infrastructure, using technology to better deliver government services in the long run.

The CNX Nifty is currently trading at 9130.95, up by 27.45 points or 0.30% after trading in a range of 9102.65 and 9135.95. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 4.23%, Grasim Industries up by 3.47%, HDFC up by 2.32%, Indiabulls Housing up by 1.70% and Bank of Baroda up by 1.69%. On the flip side, Yes Bank down by 3.55%, ICICI Bank down by 2.00%, Axis Bank down by 1.68%, Tata Power down by 1.23% and Aurobindo Pharma down by 0.76% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 0.13%, KOSPI Index gained 0.5%, Nikkei 225 increased 0.11% and Hang Seng was up by 0.31%. On the flip side, Taiwan Weighted decreased 0.08%, Shanghai Composite slipped 0.42% and Jakarta Composite was down by 0.1%.