Bourses hold gains; Nifty above 10,350 mark

Key Indian benchmarks held their gains in late morning session, with encouraging quarterly earnings sending out a positive signal among the investors.  Sentiments remained optimistic with the private report stating that the government’s recapitalization plan for public sector banks is likely to propel credit growth by up to 700 basis points to 15% and as consequence push up GDP numbers to 7% in the next fiscal. Besides, traders took some comfort with the report that foreign investors have pumped in close to $3 billion in the Indian capital markets so far this month due to high nominal and real yields and stable macroeconomic conditions. Heavy buying in Oil & Gas, PSU and Consumer Durables stocks along with positive Asian markets, too added to optimistic sentiments.  The market participants paid no heed towards the CBEC chairperson Vanaja N Sarna’s statement that disruption caused by the goods and services tax (GST) rollout may hamper government’s indirect revenue collection target for the year 2017-18. Meanwhile, Pension regulator PFRDA has increased incentives payable to Points of Presence (POPs) - the principal distributive points for National Pension System (NPS) - to promote the social security scheme.

On the global front, Asian markets were trading mostly in green, with the end-of-week rally in key US stocks driving gains in technology companies across the region. Back home, in scrip specific development, Cadila Healthcare traded higher after the company received the final approval from the US Food & Drug Administration (USFDA) to market Tamoxifen Citrate Tablets USP in the strengths of 10 mg (base) and 20 mg (base). The drug is indicated to treat breast cancer in women and men and to reduce the incidence of breast cancer in women at high risk for breast cancer.
 
The BSE Sensex is currently trading at 33256.51, up by 99.29 points or 0.30% after trading in a range of 33206.93 and 33332.06. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.11%, while Small cap index was up by 1.12%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.56%, PSU up by 1.36%, Consumer Durables up by 1.30%, Telecom up by 1.28% and Industrials up by 1.13%, while Metal down by 0.05% was the lone losing index on BSE.

The top gainers on the Sensex were ONGC up by 3.13%, ICICI Bank up by 2.04%, Tata Motors - DVR up by 1.62%, Maruti Suzuki up by 1.57% and Dr. Reddy’s Lab up by 1.49%. On the flip side, ITC down by 1.24%, Coal India down by 1.22%, Tata Steel down by 1.15%, Kotak Mahindra Bank down by 0.80% and Wipro down by 0.78% were the top losers.

Meanwhile, after the government introduced mega capital infusion scheme for public sector banks (PSBs), the industry chamber Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report has stated that the change in market perception of PSBs has the potential to fetch the government much higher values than that envisaged in the bank support plan via stake divestment in public sector undertaking banks.

According to the report, the dilution of government equity to 52% in state-owned banks under the recapitalisation plan can fetch valuation much higher than the estimated potential of Rs 58,000 crore. It has highlighted that as public sector undertaking banks have been given over-weightage following the government announcement of capital infusion, their valuations have already gone up between 20-30% in the first few days, even before unveiling of details of the recapitalisation bonds and the reform roadmap.

ASSOCHAM further said that as the details emerge in the coming few weeks and months, these stocks, particularly of the larger banks can easily move up by another 30-40%, taking their market capitalization commensurately high. This would surely mean, that if the banks are able to encash the sweet spot, they can easily raise much more than Rs 58,000 crore. It also said once bank lending begins to pick up, there would be consequent advantages by way of higher economic growth and tax buoyancy.

The CNX Nifty is currently trading at 10366.15, up by 43.10 points or 0.42% after trading in a range of 10344.30 and 10383.80. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.43%, ONGC up by 2.96%, Yes Bank up by 2.57%, Ambuja Cement up by 2.17% and ICICI Bank up by 2.08%. On the flip side, Tata Steel down by 1.16%, Wipro down by 1.14%, ITC down by 0.89%, Indiabulls Housing Finance down by 0.80% and Coal India down by 0.74% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 increased 0.9 points or 0% to 22,009.35, FTSE Bursa Malaysia KLCI increased 1.68 points or 0.1% to 1,747.81, KOSPI Index increased 2.28 points or 0.09% to 2,498.91, Jakarta Composite increased 27.75 points or 0.46% to 6,003.03 and Taiwan Weighted increased 47.76 points or 0.45% to 10,756.87.

On the flip side, Hang Seng decreased 35.79 points or 0.13% to 28,403.06 and Shanghai Composite decreased 31.84 points or 0.93% to 3,384.97.