Benchmarks continue to trade higher in afternoon deals

Key benchmark indices continued to trade higher in the afternoon session on sustained buying, with the Sensex moving over the 31,200 and the Nifty above 9,600 marks. Trading sentiments remained optimistic with NITI Aayog Vice Chairman Arvind Panagariya’s statement that India will regain the crown of the fastest growing major economy, overtaking China, as early as the first quarter of 2017-18. He said that India, on an annual basis, is ahead of China and will regain the growth momentum soon on the back of host of reforms initiated by the Modi government in the last three years. The market sentiment was further boosted by hopes of good southwest monsoon rains along with positive global cues.  Moreover, index heavyweights like Bharti Airtel, Hero MotoCorp, NTPC and HDFC stocks too supported the market.  In scrip specific development, Bharti Airtel rallied over 2 percent after receiving the approval of the Securities and Exchange Board of India (SEBI), Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) for the proposed scheme of merger between Airtel and Telenor (India) Communications.

On the global front, Asian markets were trading mostly in green, as upbeat data on U.S. manufacturing and employment and buoyant European factory growth boosted investor optimism. Back home, the BSE Sensex is currently trading at 31265.37, up by 127.78 points or 0.41% after trading in a range of 31190.40 and 31332.56. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.71%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Telecom up by 1.54%, Healthcare up by 1.03%, Realty up by 0.97%, Auto up by 0.87% and Consumer Durables up by 0.86%, while Oil & Gas down by 0.25% and Energy down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.67%, Hero MotoCorp up by 2.66%, Cipla up by 2.48%, NTPC up by 1.69% and HDFC up by 1.48%. On the flip side, Hindustan Unilever down by 1.42%, GAIL India down by 1.27%, Tata Steel down by 1.26%, Power Grid down by 1.16% and ICICI Bank down by 0.81% were the top losers.

Meanwhile, expressing its optimism about India’s move to implement key reforms and bring structural changes, the global credit rating agency, Moody's Investors Service in its latest report has said that a number of wide-ranging reforms initiated by the government would gradually ease the country's high debt burden, if implemented successfully. Further, the agency has noted that demonetization & financial inclusion efforts will help broaden the tax base, while expenditure reforms will enhance spending efficiency and the Aadhaar identification system can help reduce fiscal leakage.

The report titled ‘Government of India: Effective Implementation of Key Fiscal and Banking Sector Reforms Would Address Core Credit Challenges’ focuses on the potential credit impact of three key pending reforms of India- the Goods and Services Tax (GST), the Fiscal Responsibility and Budget Management (FRBM) framework and bad loans resolution measures. Besides, it has said that the GST implementation will have a muted short-term impact, but expects higher productivity growth in long term.

Moody's Investors Service has further stated that implementation of medium-term fiscal framework would help guide lowering government debt, adding that the FRBM framework offers an opportunity to anchor fiscal consolidation by setting a medium-term target for the debt burden. On the problem of rising bad loans, the rating agency has said that the government’s recent measures to tackle nonperforming assets (NPAs) along with the promulgation of the Insolvency and Bankruptcy Code 2016 are credit positive for the sovereign. However, it pointed that high stressed assets in the banking sector pose contingent liability risks and limit private investment recovery.

The CNX Nifty is currently trading at 9652.25, up by 36.15 points or 0.38% after trading in a range of 9637.45 and 9673.50. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 2.75%, Bharti Airtel up by 2.70%, Cipla up by 2.54%, Adani Ports &SEZ up by 1.70% and Tata Motors up by 1.54%. On the flip side, GAIL India down by 1.84%, Hindustan Unilever down by 1.47%, BPCL down by 1.15%, Tata Steel down by 1.08% and Power Grid down by 1.04% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 5.12 points or 0.16% to 3,107.74, FTSE Bursa Malaysia KLCI added 9.89 points or 0.56% to 1,773.00, KOSPI Index was up by 27.11 points or 1.16% to 2,371.72, Taiwan Weighted rose 65.11 points or 0.65% to 10,152.53, Hang Seng surged 92.11 points or 0.36% to 25,901.33 and Nikkei 225 increased 317.25 points or 1.6% to 20,177.28.

On the flip side, Jakarta Composite was down by 6.49 points or 0.11% to 5,731.66.