Sensex, Nifty hover near highest point of the day

Indian equity benchmarks added strength, continuing their firm trade with benchmarks hovering near the highest point of the day in the afternoon session, on account of sustained buying by fund and retail investors in the blue-chip counters. Sentiments remained up-beat with Finance Minister Arun Jaitley’s statement that India will continue to grow at 7-8 per cent rate, an 'absolute normal' for the nation under the current global environment. Jaitley also said as far as the economy is concerned, all the decisions taken by the Modi-Government are consistently in one direction. Domestic sentiment was also buoyed by Reliance Industries’ better-than-expected fourth quarter earnings and positive global cues. Moreover, the rupee appreciating by another 19 paise to 64.25 against the dollar in early trade too sent out positive vibes to the stock markets. In scrip specific development, BHEL was up by over two percent after bagging its largest ever export order worth Rs 10,000 crore, for setting up 1,320 MW (2x660 MW) Maitree super thermal power project in Bangladesh.

On the global front, Asian markets were trading mostly in green, following the global rally after encouraging results from the French presidential election helped ease worries over political instability in Europe. Back home, the BSE Sensex is currently trading at 29870.29, up by 214.45 points or 0.72% after trading in a range of 29780.84 and 29872.68. 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 1.01%, while Small cap index added 0.83%.

The top gaining sectoral indices on the BSE were Telecom up by 2.50%, Energy up by 1.39%, Oil & Gas up by 1.32%, Realty up by 1.14% and FMCG up by 1.06%, while there were no losers on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.43%, Bharti Airtel up by 3.26%, Reliance Industries up by 1.68%, ITC up by 1.36% and Hero Moto up by 1.24%. On the flip side, NTPC down by 1.11%, TCS down by 0.98%, Sun Pharma down by 0.33%, Cipla down by 0.22% and ONGC down by 0.08% were the top losers.

Meanwhile, reiterating that the problem of bad loans in the banking system is not 'insurmountable' for India, Finance Minister Arun Jaitley has said that a large economy like India can deal with this problem, as it is not a problem spread over hundreds or thousands of accounts but is confined to only 20 to 30 big accounts. However, he stated that the problem of Non-performing assets (NPAs) has just persisted too long and is certainly adversely impacting the banking system.

Jaitley stressed that at present, the resolution of NPAs is a top priority for the government as it will encourage private investments and in order to resolve the problem, some precipitative action will have to be taken and this may involve some hair cuts by the banks, which would be a bona fide commercial consideration. He also added that the defaulting companies will have to find partners and go in for either change of management or search of investors.

The Finance Minister blamed the anti-corruption laws of pre-liberalisation era as one of the constraints because of which banks are not able to take bold decisions. He pointed that one of the fundamental flaws in the law has been that erroneous decision-making, which may be taking haircuts to settle gets identified a corruption,' and this has made the banking bureaucracy defensive in tackling the NPA. He also stated that parliamentary committee has approved changes to the law so that bureaucrats 'can make decisions on commercial considerations than be constrained as to future consequences of the action itself.'

The CNX Nifty is currently trading at 9279.60, up by 61.65 points or 0.67% after trading in a range of 9250.35 and 9283.50. There were 38 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.42%, Bharti Infratel up by 3.34%, BPCL up by 2.78%, Bharti Airtel up by 2.76% and Indian Oil Corp. up by 2.48%. On the flip side, NTPC down by 1.23%, Eicher Motors down by 1.08%, TCS down by 0.99%, Tata Power down by 0.47% and Aurobindo Pharma down by 0.43% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 3.28 points or 0.19% to 1,759.33, Shanghai Composite was up by 7.95 points or 0.25% to 3,137.48, KOSPI Index rose 23.11 points or 1.06% to 2,196.85, Taiwan Weighted surged 123.76 points or 1.27% to 9,841.71, Nikkei 225 jumped 203.45 points or 1.08% to 19,079.33 and Hang Seng was up by 240.45 points or 1% to 24,379.93.

On the flip side, Jakarta Composite was down by 4.07 points or 0.07% to 5,660.41.