Markets make positive start to the F&O expiry week; Nifty regains 9,950 mark

Indian equity benchmarks have made an optimistic start to the new week with frontline gauges inching towards their fresh all time high levels, as investors kept an eye on a host of quarterly earnings scheduled for the day. Sentiments remained up-beat with the International Monetary Fund (IMF) retaining India’s economic growth projections at 7.2 per cent in 2017-18, up slightly from 7.1 per cent in the previous year. However, the growth would accelerate to 7.7 per cent in 2018-19. Meanwhile, NITI Aayog Vice Chairman Arvind Panagariya, despite acknowledging creation of “good jobs” in India remains a big challenge, has said that India’s economic growth rate is likely to be 7.5 percent for the current financial year.

On the global front, Asian markets were exhibiting mixed trend ahead of a Federal Reserve interest-rate decision later in the week. Japanese market was down by about a percent as the yen rose for a fifth day. The US markets ended marginally in red in the last session, mainly reacting to some weak earnings by big names.

Back home, banking stocks remained on buyers’ radar, as RBI Deputy Governor Viral Acharya has said the cleaning of banks' balance sheet is the 'number one priority' for the central bank. Aviation stocks flied higher on reports that domestic air traffic were up 20% in June. Domestic airlines flew 95.86 lakh passengers in June, registering a growth of 20 per cent over the 79.75-lakh passengers flown during the same month in the previous year.

The BSE Sensex is currently trading at 32,176.06, up by 147.17 points or 0.46% after trading in a range of 32,058.33 and 32,185.82. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.21%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Energy up by 1.16%, FMCG up by 0.89%, IT up by 0.65%, Bankex up by 0.62% and TECK was up by 0.58%, while Metal down by 0.32%, Healthcare down by 0.29%, Capital Goods down by 0.08% and Auto down by 0.03% were the few losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.13%, ITC up by 1.56%, Wipro up by 1.27%, SBI up by 1.17% and Hero MotoCorp up by 1.00%. On the flip side, Dr. Reddys Lab down by 1.91%, ONGC down by 1.25%, Asian Paints down by 0.94%, Tata Motors down by 0.58% and Sun Pharma down by 0.49% were the top losers.

Meanwhile, Reserve Bank of India’s (RBI’s) deputy governor Viral Acharya has said that the cleaning of banks' balance sheet is the 'number one priority' for the central bank. Acharya when asked if cleaning of books of the banks takes precedence over rate cut by the RBI, said that it is 'certainly our number one priority.'

The statement follows the minutes of June meeting of the Monetary Policy Committee where Acharya maintained tolerance for a slightly higher rate of interest justified to ensure that banks “do not find relatively low the hurdle rate for evergreening (perennial extension) of bad loans”. Acharya had said that “What is required for monetary policy to do its job better is to address the stress on bank (and highly indebted borrower) balance sheets”.

Speaking at the Delhi Economics Conclave, Acharya said the note ban has changed the perspective of some sections of the society towards black money. Talking about demonetisation said that it has changed the perspective of some section of society towards the black money and preference for financial products are on the rise post that.

Last month, the RBI decided to refer 12 NPA accounts, which account for 25% of the bad loans in the banking system, for resolution under the Insolvency and Bankruptcy Code (IBC). The gross NPAs of the public sector banks were more than Rs 6.41 lakh crore at March-end.

The CNX Nifty is currently trading at 9,950.95, up by 35.70 points or 0.36% after trading in a range of 9,919.60 and 9,953.10. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.45%, Reliance Industries up by 2.20%, Bank of Baroda up by 1.82%, ITC up by 1.49% and Wipro up by 1.33%. On the flip side, Dr. Reddys Lab down by 1.98%, ONGC down by 1.16%, Vedanta down by 1.16%, Asian Paints down by 0.90% and Mahindra & Mahindra down by 0.61% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI rose 0.64 points or 0.04% to 1,759.80, Shanghai Composite gained 5.79 points or 0.18% to 3,243.77, Jakarta Composite added 7.42 points or 0.13% to 5,772.84 and Hang Seng was up by 122.98 points or 0.46% to 26,829.07.

On the flip side, Nikkei 225 decreased 179.06 points or 0.89% to 19,920.69, Taiwan Weighted slipped 4.87 points or 0.05% to 10,431.83 and KOSPI Index was down by 2.21 points or 0.09% to 2,447.85.