Markets trade range-bound; Sensex above 31,800 mark

Benchmark indices traded range-bound in late afternoon session, holding most of their earlier gains on the back of earnings optimism, with the Sensex gaining over 150 points. Investors took encouragement with Finance Minister Arun Jaitley’s statements that the Goods and Services Tax (GST) is a win- win deal for all as it will expand the tax net, end inspector raj and bring down prices of goods. NITI Aayog Vice Chairman Arvind Panagariya’s statement that the country’s gross domestic product (GDP) could touch $8 trillion over the coming 15 years by maintaining 8 percent growth annually, also remained supportive. Besides, India-focused offshore funds and exchange-traded funds (ETFs) have pumped in nearly $5 billion in the first six months of the year due to country’s long-term growth prospect. Meanwhile, the government may impose anti- dumping duty of up to $266 per tonne on a certain type of rubber, used in items like footwear and conveyor belts, from EU, Korea and Thailand and revenue authorities will go slow in undertaking enforcement actions under GST for the first six months as they want industry to settle down into the new indirect tax regime.

On the global front, European markets were showing mixed trend, as investors took stock of a series of corporate announcements from across the continent. Asian markets were trading in green. Back home, in scrip specific development, Steel Strips Wheels (SSWL) gained after the company bagged yet another exports order for supply of Steel wheels for EU Caravan market. This order covers supplies of around 31,000 steel wheels in a period of 3 months. The Wheels will be shipped from company’s Chennai plant beginning next month. This repeat order strengthens SSWL’s position as a strong player in caravan wheels market in European region.

The BSE Sensex is currently trading at 31882.94, up by 171.95 points or 0.54% after trading in a range of 31793.72 and 31919.29. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.75%, while Small cap index was up by 0.89%.

The gaining sectoral indices on the BSE were Telecom up by 2.64%, Realty up by 1.56%, FMCG up by 1.46%, Healthcare up by 1.43% and Metal up by 1.42%, while there were no losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.77%, ITC up by 2.62%, Coal India up by 1.67%, Power Grid Corporation up by 1.62% and TCS up by 1.55%. On the flip side, Infosys down by 1.24%, Hindustan Unilever down by 0.99%, Adani Ports & SEZ down by 0.76%, Hero MotoCorp down by 0.67% and Bajaj Auto down by 0.38% were the top losers.

Meanwhile, pegging the current weighted average provisioning at 42 per cent by banks towards 12 accounts identified by the Reserve Bank of India (RBI) for reference to the National Company Law Tribunal under the Insolvency and Bankruptcy Code in FY18, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that for the resolution of these 12 accounts Indian banks may require Rs 180 billion additional minimum provisioning and added that this would reduce banks’ profitability by 25 per cent in the financial year 2018 (FY18).

Ind-Ra further forecasted that the outlook towards mid-size public sector banks (PSBs) remains negative, as these banks could experience disproportionate pressure on the profit and loss accounts (P&L) due to the additional provision burden. It further noted that the profitability of a few large PSBs in FY18 will be stretched due to this move and would lead to pressure on their standalone ratings.

As per the report, out of the total Rs 180 billion required provisioning, the iron and steel sector contributes around Rs 105 billion and the infrastructure sector Rs 41 billion. The credit rating agency further said that the fear of insolvency will force all stakeholders to seek remedial measures and resolve stress swiftly, which will be positive, in the event it occurs.

The CNX Nifty is currently trading at 9876.70, up by 49.55 points or 0.50% after trading in a range of 9851.65 and 9889.35. There were 36 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 4.97%, Bharti Airtel up by 2.87%, ITC up by 2.72%, Zee Entertainment up by 2.70% and Hindalco up by 2.51%. On the flip side, Ultratech Cement down by 3.06%, ACC down by 1.48%, Ambuja Cement down by 1.39%, Bharti Infratel down by 1.29% and Infosys down by 1.27% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.15 points or 0.12% to 1,757.07, KOSPI Index increased 3.9 points or 0.16% to 2,429.94, Nikkei 225 increased 20.95 points or 0.1% to 20,020.86, Taiwan Weighted increased 24.84 points or 0.24% to 10,506.10, Shanghai Composite increased 43.41 points or 1.36% to 3,230.98 and Hang Seng increased 147.22 points or 0.56% to 26,672.16. On the flip side, Jakarta Composite decreased 15.25 points or 0.26% to 5,807.11.

European markets were showing mixed trend; France’s CAC increased 4.62 points or 0.09% to 5,177.89. On the flip side, Germany’s DAX decreased 2.9 points or 0.02% to 12,427.49 and UK’s FTSE 100 was down by 0.67 points or 0.01% to 7,389.55.