Bourses at day’s high post RBI policy review outcome; Healthcare stocks shine

Indian equity benchmarks reached at day’s highs in late afternoon session, after the Reserve Bank of India (RBI) kept the repo rate unchanged at six per cent, in a decision that was broadly in line with expectations. The market mood remained upbeat as the growth of eight core infrastructure industries surged to five-month high by 4.9% in August 2017, as compared to 2.4% in July 2017, on the back of a double-digit jump in coal production and subsequent rise in electricity generation. Adding some optimism, finance secretary Ashok Lavasa said that the economy is going through a phase of readjustment to a system of formalisation that entails greater tax compliance and transparency in financial transactions. He added that things are beginning to settle down and the country is on the recovery path.

On the global front, European markets were trading mostly in red as investors kept a close eye on events in Catalonia, where the leader of the region's separatist government has said he will declare independence in a matter of days. However, Asian markets were trading in green. Back home, in scrip specific development, Acrysil gained after the company entered into a Technology/Know how transfer agreement on October 4, 2017 with Next Ship, Hungary, a designing company and Meszaros Jozsef, Hungary, a key individual for technology/know how transfer for manufacturing of 3D concrete wall tiles.

The BSE Sensex is currently trading at 31746.89, up by 249.51 points or 0.79% after trading in a range of 31457.78 and 31749.69. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.58%, while Small cap index was up by 0.86%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.02%, FMCG up by 1.71%, Energy up by 1.61%, Oil & Gas up by 1.25% and PSU up by 0.91%, while Telecom down by 0.39%, Metal down by 0.06% and TECK down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.23%, ITC up by 2.54%, Tata Motors - DVR up by 2.36%, Reliance Industries up by 2.27% and Dr. Reddy’s Lab up by 2.25%. On the flip side, Bharti Airtel down by 1.84%, Coal India down by 0.50%, HDFC Bank down by 0.22%, TCS down by 0.17% and Infosys down by 0.16% were the top losers.

Meanwhile, raising concerns over the accumulation of bad loans or non-performing assets (NPAs) in banking sector, credit rating agency, Crisil in its latest report has said that banks with high NPAs continue to choke Indian economy. Rs 11.5 lakh crore of bad loans is estimated as of March 31, 2017 in the sector.

Crisil further termed India Inc’s credit quality as a tale of two distinct loan books, by distinguishing in good and bad one. It said that the good one is where improvements have been seen over the past year, and which should sustain, while bad one is where sizeable stressed assets exist. However, the rating agency found improvement in the credit ratio of corporates on the back of better financial metrics.

The report also noted that debt-weighted credit ratio of the companies surged to 3.19 times first half as against 0.88 times during the period a year ago. The credit ratio stood at 1.59 times and the debt-weighted credit ratio at 1.94 times, indicating that the trend of recovery in credit quality has sustained for a year now. A reading above 1 indicates upgrades outnumbering downgrades. On a rolling 12 months average basis, for the first time in the past five years, both these ratios are above 1. Crisil gave credit of improvement in credit ratio to the better financial indicators as corporates kept away from capex given the output gap-or substantial headroom in capacity utilisation-in many sectors. It is also expecting continuation in the upward trend till demand firms up and added that lower interest costs will provide further support.

The CNX Nifty is currently trading at 9935.00, up by 75.50 points or 0.77% after trading in a range of 9850.65 and 9936.10. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 3.22%, ITC up by 2.49%, Aurobindo Pharma up by 2.36%, Dr. Reddy’s Lab up by 2.29% and Reliance Industries up by 2.24%. On the flip side, Bharti Airtel down by 1.51%, Coal India down by 0.74%, UPL down by 0.52%, Eicher Motors down by 0.45% and Ultratech Cement down by 0.30% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 2.92 points or 0.17% to 1,762.59, Nikkei 225 increased 12.59 points or 0.06% to 20,626.66, Jakarta Composite increased 15.99 points or 0.27% to 5,955.45 and Hang Seng increased 205.97 points or 0.73% to 28,379.18.

European markets were trading mostly in red; France’s CAC decreased 12.78 points or 0.24% to 5,354.63 and UK’s FTSE 100 decreased 7.4 points or 0.1% to 7,460.71. On the flip side, Germany’s DAX increased 17.92 points or 0.14% to 12,920.57.