Bourses manage to keep their head above water in late afternoon session

In a volatile session, Indian equity benchmarks managed to keep their head above water in late afternoon session, on the back of buying at Consumer Durables, Energy and Power counters, amid higher opening in European markets. Traders remained optimistic with Finance Minister Arun Jaitley’s statement that the Goods and Services Tax (GST) is bound to impact the direct tax collection as well due to the increased detection technology and greater compliance. The Finance Minister also said that even before GST was rolled out, the impact of demonetisation has expanded the number of assessees under the personal income tax. Some support also came with Moody's Investors Service’s statement that in the near term, the economy will continue to recover from the temporary liquidity shock from demonetization, while adjusting to the new GST. Meanwhile, the Indian auto components industry expanded by 14.3% to Rs 2.92 lakh crore last fiscal, on the back of robust growth in after market sales.

On the global front, European markets were trading in green, as investors looked to upcoming data and news coming out of the political sphere, while cheering on the positive trading seen overseas. However, Asian markets were trading mostly in red. Back home, in scrip specific development, Lupin was trading higher after the company launched Lanthanum Carbonate Chewable Tablets 500 mg (base), 750 mg (base), and 1000 mg (base). Lupin’s alliance partner Natco had received an approval from the United States Food and Drug Administration (USFDA) earlier.

The BSE Sensex is currently trading at 31668.99, up by 22.53 points or 0.07% after trading in a range of 31551.85 and 31722.41. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.01%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.61%, Energy up by 0.54%, Power up by 0.54%, Consumer Disc up by 0.44% and Capital Goods up by 0.41%, while Telecom down by 0.69%, Healthcare down by 0.38%, PSU down by 0.30%, TECK down by 0.27% and Realty down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.94%, Maruti Suzuki up by 1.53%, Reliance Industries up by 1.46%, Power Grid Corporation up by 1.37% and Bajaj Auto up by 1.12%. On the flip side, Mahindra & Mahindra down by 1.75%, Coal India down by 1.61%, ONGC down by 1.32%, ICICI Bank down by 0.98% and Sun Pharma down by 0.89% were the top losers.

Meanwhile, amid improved prospects for asset quality, global credit rating agency, Moody's Investors Service has said that its outlook on India's banking system is stable, in line with the stable outlooks for 10 of the 15 banks which it has rated, reflecting stable view of operating environment.

Moody's further said that though the indicators like net new nonperforming loan (NPL) formation and problem loan ratios suggest a bottoming of the credit cycle, deteriorating asset quality in agriculture, and micro, small- and medium-sized enterprise (MSME) portfolios pose risks.

The report further said that public and private sector banks will continue to be bifurcated due to capitalization due to government's reluctance to infuse more capital into private sector banks. However, it noted that further improvement in the system's overall loan loss coverage along with subdued loan growth will ease pressure on capitalization.

As per the report, banks’ profitability remains low but it is improving. Besides it said that funding and liquidity of banks will remain strong following demonetization which has led to surge in low cost deposits with banks. Furthermore, the agency pointed that despite a reluctance to bolster bank capital, government support will remain strong for public sector banks, since failure for any of these banks could pose risks to systemic confidence.

The CNX Nifty is currently trading at 9889.80, up by 5.40 points or 0.05% after trading in a range of 9856.95 and 9905.70. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.09%, Maruti Suzuki up by 1.72%, Power Grid Corporation up by 1.60%, Reliance Industries up by 1.52% and BPCL up by 1.02%. On the flip side, Bharti Infratel down by 2.38%, GAIL India down by 2.20%, Coal India down by 1.96%, Bosch down by 1.67% and Mahindra & Mahindra down by 1.62% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 124.31 points or 0.44% to 27,970.30, Jakarta Composite decreased 23.44 points or 0.4% to 5,849.07, KOSPI Index decreased 9.1 points or 0.38% to 2,363.19 and Shanghai Composite decreased 2.82 points or 0.08% to 3,360.81. On the flip side, Taiwan Weighted increased 16.38 points or 0.15% to 10,585.78, Nikkei 225 increased 139.7 points or 0.72% to 19,646.24.

European markets were trading in green; France’s CAC increased 24.01 points or 0.47% to 5,080.35, UK’s FTSE 100 increased 39.27 points or 0.53% to 7,404.53 and Germany’s DAX increased 74.39 points or 0.62% to 12,076.86.