Markets continue to trade in green; Sensex up over 100 points

Key Indian Benchmarks continue to trade in green terrain in late morning session, with Sensex gaining more than 100 points, supported by higher buying at IT, TECK and Metal counters. Rebound in Q2 GDP data and hopes of further economic expansion were providing the support to the markets. 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. Some comfort also came with chief statistician TCA Anant’s statement that growth slowdown in India has bottomed out and the rebound in manufacturing is going to sustain. Furthermore, the broader markets too managed to keep their head in green with modest gains. However, upside remained capped with the reports stating that CPI inflation is expected to firm up in the coming months driven by cyclical recovery in the economy and further implementation of pay commission-related hikes by states.

On the global front, Asian markets were trading mixed, following the negative lead from Wall Street Friday after news that former National Security Adviser Michael Flynn has agreed to cooperate with prosecutors in the investigation of Russian meddling in last year's election. Back home, in scrip specific development, Fiem Industries traded jubilantly after the company signed a 'Memorandum of Understanding' with Aisan Industry, Japan and Toyota Tsusho Corporation, Japan for establishing a joint venture company in India to manufacture Fuel Pump Module and IC connector Assembly for two-wheelers and three-wheelers.

The BSE Sensex is currently trading at 32963.01, up by 130.07 points or 0.40% after trading in a range of 32785.76 and 33008.47. There were 15 stocks advancing against 15 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.09%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were IT up by 1.64%, TECK up by 1.48%, Metal up by 1.28%, Basic Materials up by 0.52% and Telecom up by 0.49%, while Consumer Durables down by 0.33%, Energy down by 0.17% and Consumer Disc down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.87%, Tata Motors up by 2.29%, Bharti Airtel up by 1.61%, ONGC up by 1.61% and Tata Steel up by 1.46%. On the flip side, Coal India down by 1.01%, Adani Ports & SEZ down by 0.85%, Asian Paints down by 0.63%, Mahindra & Mahindra down by 0.59% and Maruti Suzuki down by 0.55% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that the Reserve Bank of India (RBI), in its upcoming policy review meet, is likely to keep repo rates unchanged at 6 percent on worries of rising inflation. India’s retail inflation or consumer price index based-inflation accelerated to seven-month high of 3.58% in the month of October 2017, as compared to 3.28% in September 2017, mainly due to an increase in prices of consumer food items. RBI will come out with the policy review on December 6 after two days of Monetary Policy Committee (MPC) meeting beginning December 5.

However, the rating agency stated that the CPI inflation for October was lower than the range of 4.2-4.6 percent for the second half of FY18 that the MPC had forecast in its fourth policy review for FY18, and the recent revision in Goods and Services Tax (GST) rates would ease price pressures, but certain inflation risks persist. It also pointed out that based on the expected gradual rise in currency with the public and continued working capital-led uptick in credit off-take, liquidity situation is likely to be close to neutral by mid-December 2017, with sporadic deficits anticipated around the next advance tax payment dates.

As per the report, the central bank is likely to reiterate its stance of bringing systemic liquidity closer to neutrality in the December 2017 policy review, and primarily use overnight and term repos under the LAF to manage liquidity in the near term. It pointed out that additional open market operations also seem unlikely, given the cancellation of the OMO sale scheduled for November 23. Adding further, it said that the pace of economic expansion would have to improve sharply to 7.6 percent in the second half of FY 2018 to be in line with the MPC's baseline growth forecast of 6.7 percent for the current fiscal, which seems unlikely despite a favourable base effect.

The CNX Nifty is currently trading at 10156.95, up by 35.15 points or 0.35% after trading in a range of 10095.70 and 10179.20. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.79%, Vedanta up by 2.25%, Tata Motors up by 2.22%, Indiabulls Housing Finance up by 1.89% and Hindalco up by 1.87%. On the flip side, Bharti Infratel down by 1.54%, Bajaj Finance down by 1.43%, Coal India down by 1.43%, Ultratech Cement down by 1.31% and UPL down by 0.83% were the top losers.

Asian markets were trading mixed; KOSPI Index added 16.57 points or 0.67% to 2,491.98, Taiwan Weighted increased 50.74 points or 0.48% to 10,651.11, Jakarta Composite was up by 56.57 points or 0.95% to 6,008.71 and Hang Seng surged 120.08 points or 0.41% to 29,194.32. On the flip side, Nikkei 225 decreased 68.37 points or 0.3% to 22,750.66, FTSE Bursa Malaysia KLCI was down by 6.5 points or 0.38% to 1,711.36 and Shanghai Composite fell 4.78 points or 0.14% to 3,312.84.