Benchmarks trade in green; Nifty above 9400 mark

Indian equity benchmarks continued their firm trade in late morning session on account of buying in frontline blue chip counters with Nifty reclaiming 9400-mark. The rupee opened lower against dollar on account of buying of American currency by banks and importers. Traders got some support with Prime Minister Narendra Modi’s statement that our aim is that India must be an engine of growth as well as an example in climate friendly development in the years to come. The global rating agency Fitch Ratings enlightened that the Goods and Services Tax (GST) reform, being touted as India’s biggest reform that will come into effect from July 1, may not boost revenues significantly in the next few years, but can work in the medium term. The agency added that it may indirectly boost revenues in the medium term through higher GDP growth and more transparency. Investors took note that the rain disrupting El Nino still has a 50% chance of developing later this year albeit weakly, while prospects of Indian Ocean Dipole (IOD) - a phenomenon that strengthens monsoon in the country - forming over the Indian Ocean are looking good.

Traders were seen piling up position in Industrials, Oil & Gas and Auto stocks, while selling was witnessed in Telecom, HealthCare and Metal stocks. In scrip specific development, Glenmark Pharmaceuticals was trading under pressure after global brokerage house downgraded the company to Equal Weight from Overweigh and cut the target price. NCC is trading in red after reporting 26.11 per cent fall in net profit to Rs 63.71 crore on 13.54 per cent rise in total income to Rs 2,186.50 crore in Q4 March 2017 over Q4 March 2016. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. May 2017 series to next month i.e. June 2017 series. The near month May 2017 derivatives contracts will expire on Thursday i.e. May 25, 2017.

On the global front, Asian shares were trading mostly in green, as investors awaited minutes from the US Federal Reserve and an upcoming OPEC meeting. Moody’s Investors Services downgraded China’s long-term local and foreign currency issuer ratings, citing expectations that the financial strength of the world’s second-biggest economy would erode in the coming years. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,400 and 30,400 levels respectively. The market breadth on BSE was positive in the ratio of 1147:1001, while 107 scrips remained unchanged.

The BSE Sensex is currently trading at 30487.40, up by 122.15 points or 0.40% after trading in a range of 30395.69 and 30521.45. 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 0.01%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Industrials up by 1.09%, Oil & Gas up by 0.69%, Auto up by 0.66%, Utilities up by 0.66% and Energy up by 0.58%, while Telecom down by 0.62%, Healthcare down by 0.42%, Metal down by 0.26%, TECK down by 0.09% and Consumer Disc down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.60%, HDFC up by 1.86%, Adani Ports & Special Economic Zone up by 1.19%, NTPC up by 1.02% and TCS up by 0.82%.

On the flip side, Dr. Reddy’s Lab down by 1.39%, Asian Paints down by 1.04%, Mahindra & Mahindra down by 0.64%, SBI down by 0.62% and Cipla down by 0.31% were the top losers.

Meanwhile, in order to address the bankruptcy issue in the financial sector, the government is likely to introduce a separate bankruptcy law during forthcoming monsoon session of Parliament. The proposed bill will help in quick winding up of stressed banks, NBFCs and microfinance institutions while safeguarding the interest of small savers.

A finance ministry committee has suggested a ‘resolution corporation’ to expeditiously deal with issues concerning insolvency of financial institutions, including banks and insurers. The proposed resolution corporation will contribute to the stability and resilience of the financial system by carrying out speedy and efficient resolution of financial firms in distress, providing deposit insurance to consumers of certain categories of financial services and monitoring the systemically important financial institutions.

Further, it will also protect consumers of financial institutions and public funds to the extent possible. After enactment of the Financial Resolution and Deposit Insurance Bill, 2016, the Deposit Insurance and Credit Guarantee Corporation will be dissolved and all its functions will be carried out by the resolution corporation. Last year, the Insolvency and Bankruptcy Code (IBC) 2016 was passed by the Parliament to deal with cases of corporates or companies other than the financial sector.

The CNX Nifty is currently trading at 9415.25, up by 29.10 points or 0.31% after trading in a range of 9386.35 and 9426.00. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Tata Motors - DVR up by 3.92%, Tata Motors up by 3.50%, Yes Bank up by 2.06%, Indian Oil Corporation up by 1.89% and HDFC up by 1.81%.

On the flip side, HCL Tech down by 2.75%, Bharti Infratel down by 1.87%, Dr. Reddy’ Lab down by 1.47%, Hindalco down by 1.17% and Asian Paints down by 1.12% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 3.24 points or 0.18% to 1,770.41, KOSPI Index increased 4.34 points or 0.19% to 2,316.08, Taiwan Weighted increased 36.14 points or 0.36% to 10,043.98 and Nikkei 225 increased 96.63 points or 0.49% to 19,709.91.

On the other hand, Jakarta Composite decreased 53.66 points or 0.94% to 5,676.95, Hang Seng decreased 37.89 points or 0.15% to 25,365.26 and Shanghai Composite decreased 13.29 points or 0.43% to 3,048.66.