Benchmarks continue firm trade in morning session

Indian equity benchmarks continued their firm trade in the morning session on account of buying in frontline blue chip counters. The rupee opened higher against dollar on account of some selling of American currency by banks and exporters. Foreign Portfolio Investors stood net sellers in domestic equity markets on Thursday and sold shares worth Rs 1,140.89 crore with gross purchases and gross sales of Rs 4,837.43 crore and Rs 5,978.32 crore, respectively. Sentiments remained up-beat after pre-poll surveys showed Bharatiya Janata Party would win the Gujarat elections this month. Heightened uncertainty about the BJP’s prospects in the state elections had weighed on investor sentiment in recent days. The survey came as a relief for investors, who want political stability as the government attempts to steer the economy out of the slump. Separately, leading brokerages mostly expect a bright 2018 for Indian equities. Going by their December 2018 targets, three of the five brokerages see an 8-17% return potential in benchmark indices. Some see politics playing a larger role as the 2019 general elections draw near.

Investors took note of the finance ministry’s statement that the FRDI Bill, under consideration of a joint parliamentary committee, is depositor friendly and provides more protection to them compared to existing provisions. It has clarified that the provisions in the FRDI Bill do not modify current protections for depositors adversely at all, the ministry held, maintaining that these rather provide additional protections in a more transparent manner. Select banking stocks were buzzing in today’s trade on report that bank loan growth rate rose to a three-year high in November indicating businesses are ramping up output after the Goods and Services Tax (GST) induced disturbances. The data from Reserve Bank of India showed that banks loans including procurement credit and loans to individuals’ farmers and businesses rose 9.64% to Rs 79.6 lakh crore as of November 24, 2017, compared with 6.6% in the same period a year earlier.

Meanwhile, telecom stocks were trading firm on report that about a dozen companies, including Bharti Airtel and Reliance Jio, have evinced interest in buying majority stake or some of the assets of debt-laden Reliance Communications (RCom). While Airtel is keen to buy a select spectrum or airwaves as also some equipment held by RCom, others have shown interest in buying majority stake. Mixed reactions were witnessed in aviation stocks with Union Minister of State for Civil Aviation Jayant Sinha’s statement that India’s aviation market would surpass the US and China by crossing a billion passenger trips per year in the next 10 to 15 years.

Traders were seen piling up position in Telecom, Metal and Basic Materials sector stocks. In scrip specific development, Oil India and Oil & Natural Gas Corporation (ONGC) were trading in green on report that the oil ministry plans to shortly send a proposal to the Cabinet that will allow producers in the North East region to charge a gas price currently available only to fields in difficult terrains. Higher prices will mostly help ONGC and Oil India, which have discovered and producing fields in the North East. Jet Airways was trading in red after the second biggest airline by domestic market share reported a sharp 91% Y-o-Y plunge in September quarter net profit.

On the global front, Asian markets were trading in green, as economic news from China and Japan beat all expectations. China’s exports and imports unexpectedly accelerated last month after slowing in October, an encouraging sign for the world's second-biggest economy which has started to slow in the face of a government crackdown on debt risks and factory pollution. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,100 and 10,200 levels respectively. The market breadth on BSE was positive in the ratio of 1622:653, while 124scrips remained unchanged.

The BSE Sensex is currently trading at 33174.68, up by 225.47 points or 0.68% after trading in a range of 33034.20 and 33203.55. 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 0.74%, while Small cap index was up by 1.02%.

The top gaining sectoral indices on the BSE were Telecom up by 1.48%, Metal up by 1.32%, Basic Materials up by 1.26%, Auto up by 1.14% and Consumer Disc up by 0.94%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Bharti Airtel up by 2.86%, Maruti Suzuki up by 2.13%, Tata Motors up by 1.62%, Sun Pharma up by 1.39% and ONGC up by 1.13%.

On the flip side, Asian Paints down by 0.82%, Hero MotoCorp down by 0.58%, NTPC down by 0.45%, Reliance Industries down by 0.32% and Dr. Reddy’s Lab down by 0.07% were the top losers.

Meanwhile, in an effort to build a political consensus in favour of standardising electricity tariffs across the country, Minister of State (Independent Charge) for Power and Renewable Energy, RK Singh, has persuaded State governments to reduce the number of slabs for selling power.

Singh said that it has been decided the number of power tariff slabs across States will be reduced to 12 to 15 from up to 90 slabs existing today in some States. However, he also added that the success of this proposal will hinge on the States’ willingness to implement it as electricity is a State subject and has political as well as financial implications.

The move is aimed at getting closer to bringing electricity under the ambit of the Good and Services Tax regime. The current variation in power prices and the differing tax structures make it difficult to have a uniform tax rate on power across the country. Once there is parity between power tariff slabs, it will be easier to have fit them in the GST slabs. The minister also said that the cross-subsidy on power should be restricted to 20 per cent. Consumers should not be burdened due to inefficiencies of the power distribution companies.

The CNX Nifty is currently trading at 10240.90, up by 74.20 points or 0.73% after trading in a range of 10195.25 and 10248.25. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.67%, Maruti Suzuki up by 2.18%, Ultratech Cement up by 2.01%, Vedanta up by 1.93% and Hindalco up by 1.92%.

On the flip side, Bharti Infratel down by 1.82%, Asian Paints down by 0.79%, NTPC down by 0.69%, Hero MotoCorp down by 0.50% and Reliance Industries down by 0.40% were the top losers.

The Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 4.24 points or 0.25% to 1,723.29, KOSPI Index increased 5.15 points or 0.21% to 2,467.13, Shanghai Composite increased 9.01 points or 0.28% to 3,281.06, Jakarta Composite increased 27.14 points or 0.45% to 6,033.97, Taiwan Weighted increased 37.46 points or 0.36% to 10,393.22, Nikkei 225 increased 261.87 points or 1.16% to 22,759.90 and Hang Seng increased 273.07 points or 0.96% to 28,576.26.