Markets continue to trade in high spirit; Nifty above 10,250 mark

Indian equity benchmarks were trading in high spirit in early afternoon session, with the Sensex and Nifty trading above 33,200 and 10,250 marks, respectively. Trading sentiments remained buoyant with the Finance Ministry’s statement that the provisions of the Financial Resolution and Deposit Insurance Bill, 2017 (FRDI Bill), under consideration of a joint parliamentary committee, are aimed at protecting the interests of depositors and provides more protection to them compared to existing provisions. Some relief also came with RBI’s data showing 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. Moreover, widespread buying in Metal, Basic Materials, FMCG, Auto and Healthcare stocks along with positive trend at other Asian markets, too brought additional cheer on the street. In scrip specific development, Capital First was up by over a percent after receiving an approval to issue Rated, Listed, Secured, Redeemable, Non-Convertible Debentures (NCDs) of Rs 100 crore.

On the global front, Asian markets were trading in green, as economic news from China and Japan beat all expectations and investors marvelled at the meteoric ascent of bitcoin. Back home, the BSE Sensex is currently trading at 33218.27, up by 269.06 points or 0.82% after trading in a range of 33034.20 and 33243.72. 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 0.66%, while Small cap index was up by 0.94%.

The top gaining sectoral indices on the BSE were Metal up by 2.00%, Basic Materials up by 1.45%, FMCG up by 1.25%, Auto up by 1.09% and Healthcare up by 1.02%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Tata Steel up by 2.98%, Maruti Suzuki up by 2.34%, Sun Pharma up by 1.87%, Hindustan Unilever up by 1.85% and Tata Motors up by 1.83%. On the flip side, SBI down by 1.18%, Hero MotoCorp down by 0.72%, Reliance Industries down by 0.69%, Power Grid down by 0.54% and Asian Paints down by 0.52% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that timely equity infusion in most microfinance institutions (MFIs) has helped to improve their overall asset quality, despite delinquencies pressures continue to persist. It pointed out that the sector received Rs 1,500 crore capital infusion in the first half of FY18 (H1FY18) as against Rs 4,700 crore in FY17 indicating continued support for the MFIs and investor confidence in sectors’ growth potential.

As per the report, the shock of a sharp and sudden dip in asset quality post-demonetisation has so far been absorbed by equity infusion into most MFIs, the pain is not fully over yet as reflected by the analysis of collection efficiencies, delinquencies, profitability, capitalisation and solvency position during the first of FY18. Given the projected growth rate of 25-35 percent over the next three years for MFI in India and the expected higher provisioning over the next three-four quarters, ICRA retains the capital requirement estimates of about Rs 7,000-9,000 crore till FY20.

The rating agency further indicated that the overall collection efficiency in the microfinance sector continued to improve, increasing to 94% in September 2017 from a low of 87% in December 2016. It pointed out that an encouraging trend is that the improvement was widespread across almost all affected districts except the Vidarbha region of Maharashtra and some districts of Madhya Pradesh. It also noted that several MFI players reported over 98% collection efficiencies for the loans disbursed after January 2017, consequently, fresh slippage of loans has been arrested.

The CNX Nifty is currently trading at 10250.70, up by 84.00 points or 0.83% after trading in a range of 10195.25 and 10261.20. There were 37 stocks advancing against 12 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Tata Steel up by 3.06%, Maruti Suzuki up by 2.30%, Vedanta up by 2.22%, Hindalco up by 2.13% and Tata Motors up by 1.94%. On the flip side, Bharti Infratel down by 2.11%, SBI down by 1.03%, Reliance Industries down by 0.75%, Asian Paints down by 0.67% and NTPC down by 0.67% were the top losers.

All the Asian markets were trading in green; KOSPI Index increased 2.02 points or 0.08% to 2,464.00, FTSE Bursa Malaysia KLCI was up by 4.23 points or 0.25% to 1,723.28, Shanghai Composite rose 15.73 points or 0.48% to 3,287.78, Jakarta Composite added 27.14 points or 0.45% to 6,033.97, Taiwan Weighted surged 42.86 points or 0.41% to 10,398.62, Nikkei 225 increased 313.05 points or 1.39% to 22,811.08 and Hang Seng moved up 332.68 points or 1.18% to 28,635.87.