Benchmarks trade in green; Nifty holds 10,250 mark

Indian equity benchmarks continued their trade in green in the morning session on account of buying in frontline blue chip counters. Oil held steady after OPEC and other major producers agreed to extend production curbs in a widely expected move aimed at ending a persistent glut in global supplies. The sentiments were upbeat after GDP rose 6.3% in the July-September period, in line with independent estimates, compared with the three year low of 5.7% growth in the April-June quarter and 7.5% in the year earlier, reversing a five-quarter slide and setting itself on course for revival. Reacting to the GDP growth data, Finance Minister Arun Jaitley has said the impact of demonetization and GST is behind us and growth in coming quarters will be on upward trajectory. Additionally, the Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, rose to a 13-month high of 52.6 in November from October’s 50.3. It enlightened that growth in output and new orders picked up to the fastest since October 2016, reportedly supported by reductions in GST rates and stronger underlying demand conditions. India’s manufacturing economy advanced on its path to recovery as disruptions from the recent tax reform (GST) continues to diminish.

Separately, the country’s eight core infrastructure industries grew 4.7% in October, matching the September growth, which has been revised down from 5.2%. This is the highest core sector growth since March 2017. Besides, chief statistician TCA Anant said that India’s economic growth in the July-September quarter could be higher than 6.3% as indirect taxes are still being collected on account of the goods and services tax GST) which was rolled out on July 1. He said manufacturing has shown a revival and capital goods production has picked up. Finance Secretary Hasmukh Adhia also said there may be an underestimation in the second quarter GDP growth rate figure of 6.3%.

Meanwhile, public sector banks were buzzing in today’s trade on report that North Block is likely to directly issue Rs 1.35 lakh crore of bank recapitalisation bonds, taking the entire liability of repayment and interest in the central budget, as it seeks to extricate state-run lenders from a mounting pile of bad debt and make funds available to more productive sectors of the economy. Auto stocks will be in limelight as the sector is expected to register higher Y-o-Y growth backed by a low base of the year-ago period. As a result of demonetization, sales in November were impacted negatively, which should result in double-digit Y-o-Y growth for most companies in November. Mixed reactions were witnessed in aviation stocks as aviation fuel price hiked by Rs 3,206 per kilolitre to Rs 57349 per kilolitre in Delhi.

Traders were seen piling up position in Capital Goods, Industrials and Auto stocks, while selling was witnessed in Telecom sector stocks. In scrip specific development, Allahabad Bank was trading in green on report that the lender has set a medium term target to sell its 30% stake at Universal Sompo General Insurance Company as the government is insisting sale of non-core assets. Biocon was trading in green after the company announced that the European Medicines Agency accepted marketing authorization application for its breast cancer and chemotherapy drug. The EMA has accepted for review Mylan’s Marketing Authorisation Applications (MAA) for proposed biosimilar trastuzumab and proposed biosimilar pegfilgrastim.

On the global front, Asian markets were trading mostly in green, as major manufacturing economies saw their fastest expansion in factory activity in years last month, driven by robust demand for electronics and firming the case for central banks in the region to shift to tighter monetary policy next year. A raft of mostly strong factory activity surveys released comes a day after the Bank of Korea became the first major central bank in Asia in three years to raise interest rates. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,200 and 10,250 levels respectively. The market breadth on BSE was negative in the ratio of 884:1130, while 99 scrips remained unchanged.

The BSE Sensex is currently trading at 33245.77, up by 96.42 points or 0.29% after trading in a range of 33172.64 and 33300.81. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.86%, while Small cap index was up by 0.96%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.13%, Industrials up by 1.01%, Auto up by 0.85%, Consumer Disc up by 0.78% and FMCG up by 0.76%, while Telecom down by 0.20% was the sole losing index on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.29%, Tata Motors - DVR up by 1.14%, Tata Motors up by 1.14%, ITC up by 1.13% and ONGC up by 1.00%.

On the flip side, Bharti Airtel down by 0.94%, Coal India down by 0.67%, HDFC down by 0.44%, Hindustan Unilever down by 0.42% and Dr. Reddy’s Lab down by 0.39% were the top losers.

Meanwhile, reacting to the strong September quarter GDP numbers, Finance Minister Arun Jaitley has said the rise in GDP growth rate to 6.3 percent in the July-September period of 2017-18 signals a reversal of downtrend witnessed over the preceding five quarters.

He added that the deceleration in overall growth witnessed since the first quarter of the last fiscal has been reversed and the impact of two significant reforms -- demonetisation and rollout of the Goods and Services Tax (GST) -- is “behind us”, and the country can now look forward to upward growth trajectory in the coming quarters.

Jaitley further said that India had standardised itself for a growth rate of seven-eight percent. Outlining the economic roadmap for the government, he said “India, in the last three years, for the first time in history, has been the fastest growing major economy and we do hope that in the first instance we evolve into a middle income economy and subsequently graduate into a developed economy.”

Observing that inadequate infrastructure is a major hindrance in the growth, he said if we have to aspire to reach this, India will need to upgrade infrastructure over the next two decades. We need a lot of investment and we will need a lot of spending. He added that the government has been increasingly raising allocation for development of the sector.

The CNX Nifty is currently trading at 10256.50, up by 29.95 points or 0.29% after trading in a range of 10233.40 and 10272.70. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 1.61%, Bosch up by 1.51%, Larsen & Toubro up by 1.46%, Tata Motors up by 1.42% and Ambuja Cement up by 1.37%.

On the flip side, Indian Oil Corporation down by 0.84%, Bharti Airtel down by 0.80%, HCL Tech down by 0.76%, Hindalco down by 0.58% and Coal India down by 0.58% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 5.86 points or 0.24% to 2,482.23, Taiwan Weighted increased 99.52 points or 0.94% to 10,659.96 and Nikkei 225 increased 149.6 points or 0.66% to 22,874.56.

On the other hand, Hang Seng decreased 38.61 points or 0.13% to 29,138.74 and Shanghai Composite decreased 11.63 points or 0.35% to 3,305.56.

Kuala Lumpur Stock Exchange and Jakarta Stock Exchange was closed on account of National holiday.