Benchmarks gain traction in early deals; Nifty recaptures 10K mark

Indian equity benchmarks have gained momentum after a cautious start and are trading in fine fettle in early deals on Thursday, with frontline gauges reclaiming their crucial 10,000 (Nifty) and 31,900 (Sensex) levels. Sentiments remained upbeat on report that direct tax collections in the first six months of the current fiscal stood at Rs 3.86 lakh crore, growing by 15.8 per cent over the same period last year. Gross collections (before adjusting for refunds) have increased by 10.3 per cent to Rs 4.66 lakh crore during April to September. Traders also took some encouragement with report that the newly constituted Economic Advisory Council to the Prime Minister (EAC-PM) wants the government to stick to its fiscal consolidation road map and has suggested that stimulus to the industry should not be at the cost of fiscal prudence. 

Supportive global cues too aided sentiments with Asian counters trading in green at this point of time, as the minutes showed there remains a strong degree of caution at the US Federal Reserve over the timing of future interest-rate increases. The US markets extended their gains despite a relatively lackluster day of trade in last session.

Back home, apart from the macro economic data of IIP and CPI to be released later in the day, traders will be eyeing the second quarter earnings of IT bellwether TCS. On the sectoral front, stocks related to oil and gas counter edged higher, as the government has rationalised the tax rates on upstream oil and gas operations, while the Petrol pump dealers called off their proposed strike on October 13.

The BSE Sensex is currently trading at 31941.29, up by 107.30 points or 0.34% after trading in a range of 31813.67 and 31946.52. There were 20 stocks advancing against 10 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.43%, while Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were Metal up by 1.15%, Realty up by 1.01%, Telecom up by 0.89%, Healthcare up by 0.79% and Utilities was up by 0.79%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Sun Pharma up by 2.16%, Lupin up by 1.53%, Tata Steel up by 1.24%, NTPC up by 1.20% and Reliance Industries up by 1.14%. On the flip side, Bharti Airtel down by 1.10%, Asian Paints down by 0.75%, Cipla down by 0.54%, Coal India down by 0.42% and ICICI Bank down by 0.41% were the top losers.

Meanwhile, citing Indian banking sector is already under pressure due to structural reforms like demonetisation and new uniform tax regime, SBI Ecowrap in its latest report has said that India could slightly delay the implementation of global risk norms Basel III. It also said that an extended timeline to meet the capital needs under the norms would provide the necessary breather to banks to lend more while they grapple with several issues.

The report titled ‘Timing Future Reforms in India’ said that Indian banking sector needs some time to assimilate the impact of past three structural reforms demonetisation, Goods and Services Tax (GST) implementation and Real Estate Regulatory Authority (RERA) before facing the new ones. Even as they acknowledge the positive impact of such reforms, they are convinced that perhaps the Indian banking sector deserves a small interregnum so as to meaningfully concentrate on issues related to financial inclusion, asset quality and credit growth.

Terming banking sector as the key driver of Indian economy, the report noted that it is currently going through challenging times due to low credit growth, deterioration in asset quality and low profitability. It further said that going by the country-wise implementation status of Basel III standards, India is largely compliant with the risk-based capital and Liquidity Coverage Ratio (LCR) norms ahead of most of the countries as some of them. As per the Reserve Bank direction, the Basel III capital regulation is being implemented from April 1, 2013 in India in phases, and it will be fully adopted as on March 31, 2019.

The CNX Nifty is currently trading at 10016.30, up by 31.50 points or 0.32% after trading in a range of 9977.10 and 10025.40. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.92%, Hindalco up by 3.29%, Sun Pharma up by 2.00%, NTPC up by 1.40% and Vedanta up by 1.39%. On the flip side, Bharti Airtel down by 1.10%, Ultratech Cement down by 0.78%, Cipla down by 0.66%, Asian Paints down by 0.58% and ICICI Bank down by 0.54% were the top losers.

Asian markets were trading mostly in green; KOSPI Index gained 10.47 points or 0.43% to 2,468.63, Jakarta Composite jumped 15.5 points or 0.26% to 5,898.29, Taiwan Weighted increased 49.99 points or 0.47% to 10,691.18, Hang Seng added 75.14 points or 0.26% to 28,464.71 and Nikkei 225 was up by 85.59 points or 0.41% to 20,966.86.

On the flip side, Shanghai Composite decreased 5.63 points or 0.17% to 3,382.66 and FTSE Bursa Malaysia KLCI was down by 3.41 points or 0.19% to 1,753.80.