Bourses maintain upbeat mood in afternoon deals

Indian equity indices maintained their upbeat mood in early afternoon session, as buying momentum in the equities persisted. Investors’ sentiment got a boost with the report that international rating agency Moody upgraded India’s sovereign bond rating to Baa2 from Baa3 with a stable outlook. The rating agency also noted that continued progress on economic and institutional reform will enhance India's high growth potential. Some encouragement also came with Former RBI Governor C Rangarajan’s statement 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. Besides, positive global cues together with bouts of buying in Realty, Metal, Banking and Basic Materials stocks, too brought some cheer on the street. The broader indices also putting up huge amount of gains, with rally over a percent. Meanwhile, the rupee was in a sweet spot, strengthening by 40 paise to 64.89 against the dollar in early trade. In scrip specific development, Glenmark Pharmaceuticals surged over a percent on launching nicotine replacement therapy product ‘Kwitz’ that helps smokers quit smoking.

On the global front, Asian markets were trading mostly in green, as traders were buoyed by news that Donald Trump's tax cuts had moved a step closer. Back home, the BSE Sensex is currently trading at 33440.31, up by 333.49 points or 1.01% 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 1.22%, while Small cap index was up by 1.10%.

The top gaining sectoral indices on the BSE were Realty up by 2.48%, Metal up by 2.19%, Bankex up by 1.83%, Basic Materials up by 1.46% and Telecom up by 1.35%, while IT down by 1.03% and TECK down by 0.61% were the only losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.24%, Cipla up by 2.86%, Tata Steel up by 2.56%, Bharti Airtel up by 2.38% and SBI up by 2.19%. On the flip side, Infosys down by 1.69%, TCS down by 0.64%, Dr. Reddy’s Lab down by 0.64%, Asian Paints down by 0.60% and ONGC down by 0.31% were the top losers.

Meanwhile, citing improved growth prospects driven by the government’s wide-ranging program of economic and institutional reforms, Global credit rating agency Moody's Investors Services has upgraded India's sovereign credit rating by one notch to 'Baa2' with a stable outlook. The surprise move comes after a gap of 13 years - the rating agency had last upgraded India’s rating to 'Baa3' in 2004. The 'Baa3' rating was the lowest investment grade - just a notch above 'junk' status. In 2015, the rating outlook was changed to 'positive' from 'stable'.

The US-based agency believes that continued progress on economic and institutional reforms will, over time, enhance India's high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term. However, it cautioned that high debt burden remains a constraint on the country's credit profile. It also believes that the reforms put in place have reduced the risk of a sharp increase in debt, even in potential downside scenarios.

Adding further, Moody's mentioned that while a number of important reforms remain at the design phase, those implemented to-date will advance the government's objective of improving the business climate, enhancing productivity, stimulating foreign and domestic investment, and ultimately fostering strong and sustainable growth. It also stated that reforms like Goods and Services Tax (GST) regime will promote productivity by removing barriers to interstate trade. Also, improvements to the monetary policy framework, measures to address the overhang of non-performing loans (NPLs) in the banking system and those like demonetisation, the Aadhaar system of biometric accounts, and targeted delivery of benefits through the Direct Benefit Transfer (DBT) system are intended to reduce informality in the economy.

On the GDP front, rating agency expects that the country’s economic growth to moderate to 6.7 percent in the fiscal year ending in March 2018. However, it said that as disruption fades, assisted by recent government measures to support SMEs and exporters with GST compliance, real GDP growth will rise to 7.5 percent next fiscal, with similarly robust levels of growth from FY2019 onward. It added that longer term, India's growth potential is significantly higher than most other Baa-rated sovereigns.

The CNX Nifty is currently trading at 10314.25, up by 99.50 points or 0.97% after trading in a range of 10307.80 and 10343.60. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 3.31%, Cipla up by 3.23%, Vedanta up by 3.10%, Yes Bank up by 2.75% and HDFC up by 2.73%. On the flip side, Tech Mahindra down by 2.44%, Infosys down by 1.57%, HCL Tech. down by 1.13%, Bosch down by 1.08% and TCS down by 0.70% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 3.39 points or 0.2% to 1,721.50, Jakarta Composite rose 40.02 points or 0.66% to 6,077.93, Nikkei 225 was up by 45.68 points or 0.2% to 22,396.80, Taiwan Weighted added 76.6 points or 0.72% to 10,701.64 and Hang Seng surged 211.13 points or 0.73% to 29,229.89.

On the flip side, Shanghai Composite decreased 20.55 points or 0.6% to 3,378.70 and KOSPI Index was down by 0.8 points or 0.03% to 2,533.99.