Sensex, Nifty continue northward move

Key Indian benchmarks continued their northward move in late morning session, as Moody's Investors Service upgraded India’s sovereign rating to Baa2 from Baa3 and changed the outlook to stable from positive. Traders remained optimistic, as Commerce and Industry Minister Suresh Prabhu exuded confidence that exports will gather momentum going forward as the economy is on course to double to $5 trillion and become the third largest in the world, over the next few years. Adding to the gains, Former RBI Governor C Rangarajan said that the inflation, which rose to 3.58 per cent in October, may ease by December and end up below 4 per cent by the end of the current fiscal. Some support also came with the report that the Union Cabinet gave its approval for the creation of the National Anti-profiteering Authority (NAA) to ensure that businesses pass on the benefits of GST to consumers.

On the global front, Asian markets were trading mostly in green on improved risk appetite following the rebound on Wall Street overnight on upbeat corporate earnings results and as House Republicans voted to approve the tax reform bill. Back home, in scrip specific development, Yes Bank traded jubilantly after the bank partnered with Amazon India to help MSMEs make a transition from offline to online selling.

The BSE Sensex is currently trading at 33478.05, up by 371.23 points or 1.12% after trading in a range of 33387.37 and 33520.82. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.46%, while Small cap index was up by 1.27%.

The top gaining sectoral indices on the BSE were Metal up by 2.47%, Realty up by 2.23%, Bankex up by 1.92%, Basic Materials up by 1.74% and Consumer Durables up by 1.42%, while IT down by 0.96% and TECK down by 0.57% were the only losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.12%, Tata Steel up by 2.79%, Cipla up by 2.69%, HDFC up by 2.62% and Bharti Airtel up by 2.55%. On the flip side, Infosys down by 1.69%, TCS down by 0.67%, Dr. Reddy’s Lab down by 0.48%, Wipro down by 0.32% and Power Grid Corporation down by 0.22% were the top losers.

Meanwhile, former RBI Governor C Rangarajan has expressed his hopes that India’s retail inflation, which accelerated to seven-month high of 3.58 percent in the month of October 2017, is likely to ease by December and remain below the 4 percent level till the end of financial year 2018. Besides, he thinks that this is the end of the season when prices rise as far as food articles are concerned.

Rangarajan has stated that there will be a seasonal decline in food prices in the month of December.  Therefore, he believes that now that the monsoon has also been good, the food prices may come down rather than rise further. Adding further, he indicated that the country’s inflation on wholesale level rose to a six-month high in the month of October as prices of food articles, led by onion and vegetables, witnessed a sharp rise.

Former RBI Governor further said that earlier, in his address, the role of the government as a producer of marketable goods is diminishing. He noted that the government's role as a regulator is very important, given the prevailing market conditions to ensure the system and structure remain competitive. Stressing the need for prudence in fiscal spending, he pointed out that most of the government funds, in the name of public expenditure, were spent towards the revenue expenditure instead of capital expenditure. According to him, this was not a wise move, as it led to larger fiscal deficit with proportionally lesser public good.

The CNX Nifty is currently trading at 10320.60, up by 105.85 points or 1.04% after trading in a range of 10313.55 and 10343.60. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 3.39%, ICICI Bank up by 3.20%, Cipla up by 3.12%, Tata Steel up by 2.99% and HDFC up by 2.98%. On the flip side, Tech Mahindra down by 1.96%, Infosys down by 1.71%, HCL Tech down by 1.02%, TCS down by 0.72% and Bharti Infratel down by 0.65% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 2.69 points or 0.11% to 2,537.48, FTSE Bursa Malaysia KLCI increased 3.84 points or 0.22% to 1,721.95, Nikkei 225 increased 19.9 points or 0.09% to 22,371.02, Jakarta Composite increased 40.02 points or 0.66% to 6,077.93, Taiwan Weighted increased 76.6 points or 0.72% to 10,701.64 and Hang Seng increased 250.16 points or 0.86% to 29,268.92.

On the flip side, Shanghai Composite decreased 11.63 points or 0.34% to 3,387.62.