Benchmarks trade in fine fettle in early deals; Nifty reclaims 9,800 mark

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Wednesday, with frontline gauges recapturing their crucial 9,800 (Nifty) and 31,800 (Sensex) bastion. Traders took some encouragement with statement of Revenue Secretary Hasmukh Adhia that the Goods and Services Tax (GST) will help bring down the inflation by one to two percent by the end of this year. He also said that the government’s objective is to ensure that inflation does not increase, and added that the government has tried to keep items frequently used by the consumers under the lower tax bracket. However, gains remained capped, as traders opted to stay away from taking positions in risky assets ahead of the IIP and inflation data to be announced after the market hours today.

On the global front, Asian Markets were mostly in red at this point of time tracking weakness in Wall Street amid controversy surrounding US President Trump after emails disclosed by President Donald Trump's eldest son cited Russian support for his father's 2016 election campaign. The US markets continued their lackluster trade and made another mixed closing in the last session, as traders remained reluctant to make significant moves ahead of Federal Reserve Chair Janet Yellen's semiannual testimony before Congress.

Back home, select stocks from banking space edged higher on report that the finance ministry is gearing up to introduce a host of Bills, including the Banking Regulation (Amendment) Bill, repeal of State Bank of India (Subsidiary Banks) Act, 1959, among others, in the upcoming Monsoon Session. The aviation stocks too were flying high on a report from ICRA that the domestic air passenger traffic in India crossed the 10-million-mark (in a single month) for the first time in the history of Indian aviation during the month of May 2017.

The BSE Sensex is currently trading at 31822.30, up by 75.21 points or 0.24% after trading in a range of 31785.69 and 31865.69. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.40%, while Small cap index was up by 0.37%.

The top gaining sectoral indices on the BSE were Energy up by 1.18%, Oil & Gas up by 0.99%, Capital Goods up by 0.61%, Power up by 0.60% and PSU up by 0.58%, while IT down by 0.04% were the lone losing index on the BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.71%, Reliance Industries up by 1.52%, ONGC up by 1.31%, Power Grid Corporation up by 0.90% and Dr. Reddys Lab up by 0.83%. On the flip side, TCS down by 0.45%, Kotak Mahindra Bank down by 0.40%, Asian Paints down by 0.28%, HDFC down by 0.28% and Axis Bank down by 0.27% were the top losers.

Meanwhile, acknowledging the large size of unorganised sector, Union Finance Minister Arun Jaitley has exhorted financial institutions, including Nabard, and banks to step up focus on improving credit flow to unorganised sector and has said that it will help to push employment growth. He also said that it is a fact that people in the unorganised sector are much higher than the organised sector, but the former gets credit with lot of difficulty.

Jaitley pointed out that if the resources of banks and financial institutions through various schemes are diverted towards unorganised sector, it will help create more employment. Regarding the benefits of self-help groups (SHGs), he said they have come a long way and generated lakhs of jobs in rural areas. He further said that since most SHGs are women-led, these have brought in financial security for rural women. He also said it has been observed that SHGs the repayment capacity is much higher with regard to all microfinance schemes.

The Finance Minister said he was hopeful that the Nabard-led initiative of SHG-Bank Linkage Programme would further expand in the coming days. Over a span of 25 years, the SHG-Bank linkage programme has grown into a massive movement with 85 lakh SHGs across the country now part of this programme. The total loan exposure of the banking system to SHGs is about Rs 61,000 crore. Meanwhile, the credit growth has plunged to a six-decade low of 5.08% in 2016-17 against 10.7% a year ago.

The CNX Nifty is currently trading at 9811.20, up by 25.15 points or 0.26% after trading in a range of 9801.55 and 9823.00. There were 36 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 2.23%, Hindustan Unilever up by 1.73%, Reliance Industries up by 1.62%, Ambuja Cement up by 1.41% and ONGC up by 1.28%. On the flip side, Indiabulls Housing down by 0.57%, Asian Paints down by 0.47%, HDFC down by 0.46%, Kotak Mahindra Bank down by 0.38% and TCS down by 0.32% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 111.58 points or 0.55% to 20,083.90, Shanghai Composite slipped 6.48 points or 0.2% to 3,196.56, KOSPI Index shed 3.74 points or 0.16% to 2,392.26 and FTSE Bursa Malaysia KLCI was down by 1.28 points or 0.07% to 1,753.75.

On the flip side, Taiwan Weighted increased 10.1 points or 0.1% to 10,425.67, Jakarta Composite gained 19.28 points or 0.33% to 5,792.60 and Hang Seng was up by 211.78 points or 0.82% to 26,089.42.