Key indices continue to trade with small gains

Key benchmark indices continued to trade with small gains in early afternoon trade, on emergence of buying by funds and retail investors despite weak trend in Asian markets. Sentiments remained positive with the Niti Aayog vice chairman Rajiv Kumar’s statement that the economic downturn which began in the last two years of UPA II regime has bottomed out and the growth will improve in the next two quarters. Some support also came with private report highlighting that India is expected to be a $6 trillion economy -- the third largest in the world -- in the next 10 years, majorly helped by digitization. Moreover, buying witnessed in Realty, Basic Materials, FMCG and Healthcare stocks also helped the key indices to trade in green. However, further gains were restricted as some concern came with the credit rating agency India Ratings’ report that India’s GDP growth estimate for the ongoing financial year 2017-18 is likely to come down to 6.7 per cent from 7.4 per cent earlier, as the combined effect of demonetisation and introduction of GST is proving to be more disruptive for the economy than was expected earlier. In scrip specific development, Dr. Reddy’s Laboratories was up by over 4 percent after receiving an EIR for its Formulation Srikakulam Plant (SEZ) Unit I, Andhra Pradesh from the USFDA.

On the global front, Asian markets were trading mostly in red as investors began to assess the implications of the much-anticipated tax proposal. Back home, the BSE Sensex is currently trading at 31226.53, up by 66.72 points or 0.21% after trading in a range of 31081.83 and 31283.92. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.78%, while Small cap index was up by 0.77%.

The top gaining sectoral indices on the BSE were Realty up by 0.95%, Basic Materials up by 0.90%, FMCG up by 0.86%, Healthcare up by 0.85% and Metal up by 0.69%, while Oil & Gas down by 0.58%, Consumer Durables down by 0.50%, Energy down by 0.29%, Telecom down by 0.28% and Bankex down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 4.53%, Coal India up by 2.11%, ITC up by 1.53%, Sun Pharma up by 1.42% and Cipla up by 1.11%. On the flip side, Asian Paints down by 2.24%, Bharti Airtel down by 1.38%, ICICI Bank down by 0.65%, Wipro down by 0.64% and Tata Motors - DVR down by 0.54% were the top losers.

Meanwhile, in order to support India to accelerate inclusive economic transformation toward upper-middle-income status, the Asian Development Bank (ADB) said that it is planning to raise annual lending up to $4 billion per year to the country between 2018 and 2022. The proposal was endorsed at new ADB Country Partnership Strategy (CPS) for these five years. Besides, it noted that the new lending programme, which includes private sector operations, is much higher than the average $2.65 billion a year in loans extended during 2012 and 2016.

Multi-lateral funding agency has stated that during the 5-year period, the new lending programme will focus on three pillars of activities, such as boosting economic competitiveness to create more and well-paid jobs, improved access to infrastructure and services, and addressing climate change and improving climate resilience. The report also said that financing will also go for public sector management, agriculture, natural resources and rural development as well as skills development and urban health. It also mentioned that the new lending will be complemented by technical assistance to undertake strategic studies, build capacities and prepare projects. In addition, ADB will also explore co-financing opportunities, including climate funds for relevant projects.

As part of the enhanced lending under CPS, ADB said that it will continue to prioritise private sector development and support government in reviving private financing of infrastructure projects, including via public-private partnerships. In private sector, it will support transport, power, urban infrastructure (including sewerage and solid waste management), affordable housing, manufacturing, health and education among others.

The CNX Nifty is currently trading at 9743.75, up by 8.00 points or 0.08% after trading in a range of 9687.55 and 9758.80. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 4.70%, Ambuja Cement up by 2.55%, Coal India up by 2.20%, ITC up by 1.51% and Ultratech Cement up by 1.48%. On the flip side, Indiabulls Housing Finance down by 2.52%, Asian Paints down by 2.34%, BPCL down by 2.09%, Aurobindo Pharma down by 2.01% and Eicher Motors down by 1.63% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 57.31 points or 0.21% to 27,585.12, Taiwan Weighted dipped 30.23 points or 0.29% to 10,296.45, Jakarta Composite declined 11.33 points or 0.19% to 5,851.70, Shanghai Composite was down by 7.09 points or 0.21% to 3,338.18 and FTSE Bursa Malaysia KLCI shed 2.58 points or 0.15% to 1,761.66.

On the flip side, KOSPI Index increased 0.57 points or 0.02% to 2,373.14 and Nikkei 225 was up by 96.06 points or 0.47% to 20,363.11.