Bourses add gains to hover near fresh record highs

Indian equity benchmarks added gains in late afternoon session and were hovering near fresh record highs, despite lower opening in European markets. Traders remained optimistic with various measures announced by the government to boost economy. The government cleared Rs 2.11 lakh crore bank recapitalisation plan for state-run banks and massive road infrastructure investment of nearly Rs 7 lakh crore over five years. The markets also got momentum with the report that the government’s revenue collection remained robust with growth of 1.63 percent to Rs 92,150 crore collected as Goods and Services Tax (GST) in September 2017 as against Rs 90,669 crore in August. Besides, rally in banking counters along with higher Asian markets, too continued to support the sentiments.  Adding to the gains, Finance Minister Arun Jaitley said that the Indian economy is on a strong wicket with sound macro-economic fundamentals. Meanwhile, India is expected to be on third position, just behind China and US, among the fastest-growing markets in terms of annual additional air passengers in 2036.

On the global front, European markets were trading in red as investors reacted to new earnings reports and monitored fresh economic data. However, Asian markets were trading in green. Back home, in scrip specific development, Vindhya Telelinks traded higher after the company received an approval for issuance and allotment of 500 Non-Convertible Debentures (NCDs) Series-II of face value of Rs 10,00,000 each aggregating to Rs 50 crore on a private placement basis to HDFC Bank.

The BSE Sensex is currently trading at 33087.38, up by 480.04 points or 1.47% after trading in a range of 32804.60 and 33117.33. There were 22 stocks advancing against 8 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.10%, while Small cap index was down by 0.22%.

The top gaining sectoral indices on the BSE were PSU up by 7.55%, Bankex up by 4.99%, Capital Goods up by 3.74%, Industrials up by 1.98% and Power up by 1.00%, while Consumer Durables down by 1.38%, Healthcare down by 0.93%, Realty down by 0.89% and Consumer Disc down by 0.13% were the top losing indices on BSE.
The top gainers on the Sensex were SBI up by 26.64%, ICICI Bank up by 16.06%, Larsen & Toubro up by 6.18%, Axis Bank up by 4.78% and Tata Motors - DVR up by 2.21%. On the flip side, Kotak Mahindra Bank down by 4.62%, HDFC Bank down by 3.92%, HDFC down by 2.41%, Lupin down by 2.40% and Sun Pharma down by 2.01% were the top losers.

Meanwhile, amid back-ended redemption of state development loans (SDLs) and funding of crop loan waivers by some states, state government’s market borrowings are expected to increase in the second half (H2) of the current fiscal (FY2018). Credit rating agency, ICRA in its latest report has estimated that borrowing may rise to Rs 3.0-3.2 trillion in H2 FY2018 from Rs 1.8 trillion in H1 FY2018. It also estimates that around three-quarters of the total SDL redemption of over Rs 700 billion, due in current fiscal, is to be redeemed in second half.

The rating agency further predicted that total SDL borrowings for the current fiscal year could be in the range of Rs 4.8-5 trillion, which is higher than its initial baseline estimate of Rs 4.5 trillion for the year. As per the report findings, a 42.7 percent year-on-year (Y-o-Y) growth in SDL issuance in Q2 FY2018 is on the back of a mismatch of revenue and expenditure of state governments emanating from transitional cash flow issues related to the migration to the goods and services tax (GST).

ICRA also noted that the compensation for loss of revenue related to the shift to the GST and the release of the share of the state governments in Integrated GST (IGST) would start flowing from the central government to the state governments and this would ease their liquidity situation during H2 FY2018.

The CNX Nifty is currently trading at 10304.00, up by 96.30 points or 0.94% after trading in a range of 10240.90 and 10340.55. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were SBI up by 26.59%, ICICI Bank up by 15.89%, Larsen & Toubro up by 5.90%, Axis Bank up by 5.04% and Ultratech Cement up by 4.96%. On the flip side, Bajaj Finance down by 5.39%, Kotak Mahindra Bank down by 4.89%, Indiabulls Housing Finance down by 4.71%, Yes Bank down by 4.44% and Indusind Bank down by 4.20% were the top losers.

Asian markets were trading in mostly in green; KOSPI Index increased 2.01 points or 0.08% to 2,492.50, FTSE Bursa Malaysia KLCI increased 3.98 points or 0.23% to 1,740.12, Taiwan Weighted increased 6.79 points or 0.06% to 10,750.57, Shanghai Composite increased 8.65 points or 0.26% to 3,396.90, Jakarta Composite increased 50.19 points or 0.84% to 6,002.26 and Hang Seng increased 147.92 points or 0.53% to 28,302.89. On the flip side, Nikkei 225 decreased 97.55 points or 0.45% to 21,707.62.

European markets were trading mostly in red; UK’s FTSE 100 decreased 21.82 points or 0.29% to 7,504.72 and Germany’s DAX decreased 20.95 points or 0.16% to 12,992.24. On the flip side, France’s CAC increased 2.01 points or 0.04% to 5,396.81.