Benchmarks trade with modest gains in morning session

Indian equity benchmarks continued their trade in green in the morning session on account of buying in frontline blue chip counters. The rupee was trading lower against dollar on account of selling of American currency by banks and importers. The rupee’s fall is due to increase demand for the US currency from importers. Traders took support from the noted economist and former vice chairman Niti Aayog Arvind Panagariya’s statement who expects the economy to grow by over 6.5% in the current financial year. He said the macro-economic indicators have remained stable for the past 3 years with current account deficit hovering around 1% and inflation moderating. Some optimism also crept in with the statement of Mukesh Ambani, Reliance Industries chairman that India’s GDP will double to $5 trillion in the next seven years and hit $10 trillion by 2030 as it will elbow out China by the middle of 21st century.

Select public sector banks stocks were buzzing on reports that as many as eight public sector banks (PSBs) have decided to raise capital from the market within four months as part of the Rs 2.11 lakh crore recapitalization plan. Some banks have already got approval from the finance ministry while others are in the process of getting the green signal for raising capital either through private placement or the rights issue. Investors took note of a private poll that the Monetary Policy Committee (MPC) will likely vote to keep interest rates unchanged later this week, citing inflationary pressure and a recovery in economic growth. In RBI’s bi-monthly policy announcement due on December 6, the MPC may also warn of rising prices and adopt a more hawkish tone, which could well be a prelude to a change in stance to tightening from neutral.

Traders were seen piling up position in IT, TECK and Metal stocks, while selling was witnessed in Consumer Durables, FMCG and Consumer Disc sector stocks. In scrip specific development, Infosys was trading in green after its board of directors appointed Salil S Parekh as Chief Executive Officer and Managing Director (CEO & MD) of the company effective from January 2, 2018. The appointment ends a nearly four-month long search for the top job at India’s second largest IT services firm. MT Educare and Zee Learn both were trading in green on report that Subhash Chandra-controlled Zee is in talks with MT Educare, a Mumbai-based company that runs the popular Mahesh Tutorials coaching classes, to buy a controlling stake in the company.

On the global front, Asian markets were trading mostly in green. Bank of Japan Governor Haruhiko Kuroda urged financial institutions to reform their business structures to make effective use of financial technology, which is triggering big changes to global financial markets. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,900 and 10,100 levels respectively. The market breadth on BSE was positive in the ratio of 1176:1067, while 125 scrips remained unchanged.

The BSE Sensex is currently trading at 32917.47, up by 84.53 points or 0.26% after trading in a range of 32785.76 and 33008.47. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.01%, while Small cap index was down by 0.02%.

The top gaining sectoral indices on the BSE were IT up by 1.08%, TECK up by 0.98%, Metal up by 0.94%, Oil & Gas up by 0.47% and Realty up by 0.43%, while Consumer Durables down by 0.69%, FMCG down by 0.22%, Consumer Disc down by 0.17%, Capital Goods down by 0.09% and Energy down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.29%, Tata Motors up by 2.39%, ONGC up by 1.81%, Tata Motors - DVR up by 1.51% and Bharti Airtel up by 1.50%.

On the flip side, Adani Ports & Special Economic Zone down by 1.28%, Cipla down by 0.92%, Coal India down by 0.90%, Asian Paints down by 0.85% and TCS down by 0.82% were the top losers.

Meanwhile, after India’s Gross Domestic Product (GDP) grew at 6.3 percent in the September quarter compared to 5.7 per cent in the June quarter, reflecting an improvement in the Indian economy, Niti Aayog Vice-Chairman Rajiv Kumar has said that the growth rebound shows that the economy has come out of the woods and economic expansion for the full year will come in at 6.5-7 percent. He said that in the next half of 2017-18, we will grow by more than 7 percent. 'The growth in the full year of the current fiscal will come between 6.5 percent and 7 percent. Henceforth, I am sure it will keep accelerating'.

Talking on interest rates issue, he expressed his surprise and said why commercial banks are not willing to reduce lending rates, they earn only 6 per cent when they put money with the RBI and the lending rate is 11.5 per cent for even AAA borrowers. He added that the commercial banks deposit rate is that you and me get on savings deposits is 3.5 per cent. I think the commercial banks' transmission mechanism has to improve and they must get their act together and become more efficient.

Earlier, Kumar had said that government must consolidate the various reforms it put in place over the past three years and begin to focus on the health and education sectors over the next 18 months.

The CNX Nifty is currently trading at 10142.05, up by 20.25 points or 0.20% after trading in a range of 10095.70 and 10179.20. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.04%, Tata Motors up by 2.28%, ONGC up by 2.14%, Vedanta up by 2.02% and Indiabulls Housing Finance up by 1.94%.

On the flip side, Bajaj Finance down by 1.60%, Ultratech Cement down by 1.50%, Adani Ports & Special Economic Zone down by 1.42%, Bharti Infratel down by 1.39% and Yes Bank down by 1.14% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 3.16 points or 0.1% to 3,320.78, KOSPI Index increased 16.17 points or 0.65% to 2,491.58, Taiwan Weighted increased 48.57 points or 0.46% to 10,648.94, Jakarta Composite increased 56.57 points or 0.95% to 6,008.71 and Hang Seng increased 167.91 points or 0.58% to 29,242.15.

On the other hand, Nikkei 225 decreased 34.28 points or 0.15% to 22,784.75 and FTSE Bursa Malaysia KLCI decreased 6.5 points or 0.38% to 1,711.36.