Benchmarks continue to trade in green in noon session

In an extremely range-bound session of trade, Indian equity benchmarks continue to trade in fine fettle in the noon session, buoyed by encouraging corporate earnings and a string of government reforms, including NPA package for banks and national steel policy. The government has approved a new policy that envisages Rs 10 lakh crore investment to create more capacity in the steel sector. The policy aims at increasing supply of domestic coking coal to cut dependence on imports by half and production of 300 million tonnes of the alloy by 2030-31. Some support also came with Asian Development Bank’s report that the Indian economy will grow 7.4 per cent this fiscal and 7.6 per cent in the next as the bankruptcy and GST laws will help create a more business-friendly environment. Investors’ sentiments also got boost after the US Federal Reserve kept its policy rate unchanged in its two-day policy review. At the end of its two-day meeting, the US Federal Reserve kept its benchmark interest rate steady, but downplayed weak first-quarter economic growth and emphasized the strength of the labour market, a sign it was still on track for two more rate increases this year.

Meanwhile, shares of PSU banks gained traction after Cabinet approved new non-performing assets (NPA) policy to deal with stressed assets. The framework includes the promulgation of an ordinance to amend the Banking Regulation Act to give more teeth to the Reserve Bank of India (RBI) and its oversight committees to act on behalf of banks while deciding on NPAs. The proposals are now awaiting the President’s assent. Further, ICICI Bank, India’s largest private sector bank, surged over 8% after the bank reported a 188% year-on-year (YoY) rise in its March quarter (Q4) standalone net profit at Rs 2,025 crore. The private sector lender had logged profit of Rs 702 crore in the year-ago quarter.

On the global front, Asian markets were trading mostly lower on Thursday as investors turned cautious after the US Federal Reserve left interest rates unchanged overnight as expected, but signaled another rate hike is imminent despite recent economic weakness. The Federal Reserve on Wednesday voted unanimously to leave its benchmark interest rate at 0.75% to 1% and continues to project two more rate hikes in 2017. Lower base metal prices weighed on resources stocks. Meanwhile, the dollar gained 0.1 per cent to 112.83 yen, its highest since March 20, after surging 0.6 per cent on Wednesday to close at the session high. 

Back home, stocks from Banking, Consumer Durables and Capital Goods counters were supporting the markets’ uptrend, while those from Metal, Realty and IT counters were adding to the underlying cautious undertone. In scrip specific development, IG Petrochemicals surged after the company posted over 2-fold jump in its net profit at Rs 28.07 crore for the quarter ended March 31, 2017 as compared to Rs 11.98 crore for the same quarter in the previous year.

The market breadth remained optimistic, as there were 1434 shares on the gaining side against 1101 shares on the losing side, while 134 shares remained unchanged.

The BSE Sensex is currently trading at 30055.83, up by 161.03 points or 0.54% after trading in a range of 30027.41 and 30098.82. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index up by 0.44%.

The top gaining sectoral indices on the BSE were Bankex up by 1.92%, Consumer Durables up by 1.03%, Capital Goods up by 0.57%, PSU up by 0.53% and Healthcare up by 0.32%, while Metal down by 0.93%, Realty down by 0.75%, IT down by 0.69%, TECK down by 0.55% and Oil & Gas down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 8.89%, Axis Bank up by 3.21%, SBI up by 2.09%, Adani Ports & SEZ up by 1.74% and Hindustan Unilever up by 1.13%. On the flip side, Tata Motors down by 1.70%, TCS down by 0.97%, HDFC Bank down by 0.94%, Infosys down by 0.61% and Mahindra & Mahindra down by 0.47% were the top losers.

Meanwhile, in order to give impetus to the steel sector, the Union Cabinet has given its approval for National Steel Policy (NSP) 2017 that envisages Rs 10 lakh crore investment to create more capacity in the sector. The development assumes significance as the steel sector is reeling under weak demand and mounting raw material prices. 

The policy aims at increasing supply of domestic coking coal to cut dependence on imports by half and production of 300 million tonnes of the alloy by 2030-31. The policy also looks at increasing per capita steel consumption to 160 kg by 2030-31 and encouraging the industry to be a world leader on energy and raw material-efficient steel production by 2030-31 in a safe and sustainable manner. The proposed policy looks to develop and implement quality standards for domestic steel products.

With the roll out of the National Steel Policy-2017, it is envisaged that the industry will be steered in creating an environment for promoting domestic steel and thereby ensuring a scenario where production meets the anticipated pace of growth in consumption, through a technologically advanced and globally competitive steel industry.

Meanwhile, in 2015, India was the only large economy in the world where steel demand continued to show a positive growth at 5.3 percent as against China's (-) 5.4 percent and Japan's (-) 7 percent. India's growing urban infrastructure and manufacturing sectors indicate that demand is likely to remain robust in years ahead.

The CNX Nifty is currently trading at 9339.50, up by 27.55 points or 0.30% after trading in a range of 9337.30 and 9361.40. There were 20 stocks advancing against 30 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were ICICI Bank up by 8.96%, Axis Bank up by 3.27%, Grasim Industries up by 2.81%, Bank of Baroda up by 2.27% and SBI up by 1.93%. On the flip side, Hindalco down by 2.51%, HCL Tech down by 1.99%, Kotak Mahindra Bank down by 1.76%, Tata Motors down by 1.69% and BPCL down by 1.24% were the top losers.

Most of the Asian markets were trading in red, Hang Seng decreased 0.47%, FTSE Bursa Malaysia KLCI declined by 0.82%, Shanghai Composite was lower by 0.13% and Taiwan Weighted was down by 0.01%. On the other hand, KOSPI Index was up by 0.84% and Jakarta Composite gained 0.29%.