Bourses retain gains; trade higher by about half a percent

Adding gains the Indian markets were trading near the highs of the day as the trade neared the first half, on continued buying by domestic institutional investors (DIIs) amid positive global indicators. Traders also continued gaining traction with across the board buying supported by international rating agency Moody’s latest report which expecting growth to revive next year, has said a 7.6 per cent GDP expansion can result in corporates reporting a pre-tax profit growth of 5-6 per cent over the next 12-18 months. The gains in the domestic markets were aided by strength in rupee as well as continuous buying by institutional buyers and fund houses. The broader markets were outperforming the benchmarks and most of the sectoral indices were in green. 

On the sectoral front, while the healthcare, consumer durables and energy stocks have taken the lead, the IT sector stocks too have moved higher taking some encouragement with IT major Tech Mahindra, which is expecting to outgrow Nasscom’s industry growth projection and may touch $5 billion mark in revenues during the current fiscal. In the non sectoral gauges, the logistics sector stocks kept buzzing after the sector received infrastructure status by the government, helping them to access loans on easier terms. In scrip specific action Simplex Infrastructures surged over 10 percent after the company won an order worth Rs 524 crore from NBCC India to construct buildings for IIT Bhubaneswar and its extended campus. Reliance ADA group companies were witnessing strong bounceback from their last couple of days downfall after the debt ridden Reliance Communications have approved the sale of its real estate assets in Delhi and Chennai to Canada-based asset management firm Brookfield.

The BSE Sensex is currently trading at 33525.60, up by 165.70 points or 0.50% after trading in a range of 33437.61 and 33557.23. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices too were trading in green; the BSE Mid cap index gained 0.49%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.82%, Consumer Durables up by 1.57%, Telecom up by 1.29%, Energy up by 1.25% and Oil & Gas up by 1.05%, while Realty was the lone losing index on BSE, trading tad lower from its previous closing.

The top gainers on the Sensex were Sun Pharma up by 3.16%, Dr. Reddy’s Lab up by 3.15%, Cipla up by 2.97%, Bharti Airtel up by 2.56% and Lupin up by 2.25%. On the flip side, Power Grid down by 1.29%, Axis Bank down by 0.75%, TCS down by 0.72%, Asian Paints down by 0.51% and Coal India down by 0.50% were the top losers.

Meanwhile, the global ratings agency, Moody’s Investors Service in its latest report has said that India’s Gross domestic product (GDP) growth of around 7.6 percent will result in higher sales volumes, which along with new production capacity and benign commodity prices will support an EBITDA (earnings before interest, taxes, depreciation and amortisation) growth of 5-6 percent over next 12 to 18 months. It also expects that growth will rebound strongly in 2018 because the supply chain disruptions of 2017 will end soon. Recently, it had upgraded India's sovereign credit rating by one notch to 'Baa2' with a stable outlook after almost 13 years.

While noting that corporate credit profile will continue to improve on strong earnings growth, supported by solid economic growth and increased production capacity, the rating agency said that consolidation in oil & gas, telecom and steel sectors would affect credit quality in these sectors. However, it also observed that refinancing needs in 2018 would be manageable for most companies given their improving access to capital markets and large cash balances.

As per the report, intense competition, such as among telecommunications companies (telcos) and auto, will result in lower earnings or rising capital spending. It also pointed out that healthy economic growth in the Asian and global economies will support steady earnings growth for Asian corporates, which in turn will improve their financial leverage. Furthermore, it noted that the gradual normalisation of monetary policy will support the near-term liquidity needs of corporates in the region.

The CNX Nifty is currently trading at 10345.20, up by 46.45 points or 0.45% after trading in a range of 10323.75 and 10356.75. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 3.61%, Dr. Reddy’s Lab up by 3.28%, Cipla up by 2.90%, Bharti Airtel up by 2.54% and Lupin up by 2.24%. On the flip side, Power Grid down by 1.34%, Axis Bank down by 0.85%, TCS down by 0.77%, HCL Tech down by 0.59% and Coal India down by 0.56% were the top losers.

Most of the Asian markets were trading in green, FTSE Bursa Malaysia KLCI was up by 3.06 points or 0.18% to 1,721.42, KOSPI Index was higher by 4.65 points or 0.18% to 2,532.32, Shanghai Composite gained 17.66 points or 0.52% to 3,410.06, Taiwan Weighted added 114.69 points or 1.08% to 10,779.24, Nikkei 225 was up by 180.64 points or 0.81% to 22,442.40 and Hang Seng surged by 378.1 points or 1.29% to 29,638.41.

On the flipside, Jakarta Composite declined by 25.3 points or 0.42% to 6,027.98.