Key indices trim some gains; Nifty holds 10,250 mark

Indian key bourses trimmed some of their gains in early afternoon session, as investors preferred to remain on sidelines ahead of key economic data -- October IIP and November CPI, which are scheduled to be released tomorrow. Selling appeared in Utilities, Energy, Oil & Gas and Metal stocks, also trimmed some of the gains. However, the indices remained in green with taking support from the report that CII’s Business Confidence Index climbed to 59.7 during October-December 2017, against 58.3 in the previous quarter, as reform measures such as the Goods and Services Tax (GST) instilled optimism in India Inc. Some support also came with data showing that direct Tax collections, which comprise personal income and corporate tax, surged 14.4 percent to Rs 4.8 lakh crore in the first eight months ending November 2017, mainly on account of income tax mop-up from individuals. In scrip specific development, Jet Airways was up by over three and half percent on plan to induct almost 25 narrow-body planes into its fleet over the next three years even as it is yet to take a call on the delivery schedule of the Boeing 787 planes.

On the global front, Asian markets were trading in green, tracking fresh records on Wall Street following forecast-busting US jobs data. Besides, investors eyed the Federal Reserve's latest policy meeting later this week. Back home, the BSE Sensex is currently trading at 33340.76, up by 90.46 points or 0.27% after trading in a range of 33313.17 and 33450.31. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.10%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.74%, Auto up by 0.61%, Consumer Disc up by 0.58%, FMCG up by 0.43% and Basic Materials up by 0.37%, while Utilities down by 0.27%, Energy down by 0.21%, Oil & Gas down by 0.14%, Metal down by 0.07% and Telecom down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.14%, Lupin up by 2.07%, HDFC up by 1.48%, Sun Pharma up by 1.28% and Coal India up by 1.25%. On the flip side, ONGC down by 1.14%, Adani Ports & SEZ down by 1.12%, Hindustan Unilever down by 0.92%, Bajaj Auto down by 0.82% and NTPC down by 0.69% were the top losers.

Meanwhile, predicting India's gross domestic product (GDP) growth in short-term is a very difficult task given shock factors like Goods and Services Tax (GST), demonitisation and the mountain of non-performing assets (NPAs) of banks, former Reserve Bank Governor Y V Reddy has said that Indian economy may require two more years to consolidate and it should aim to go back to 7.5-8 percent growth in two years. Besides, he pointed out that in a shock, negative element is front loaded and there will be some moderation, and there can be gain. 

Reddy also indicated that the country’s economy was helped by a positive shock for almost three years, following the massive drop in crude price, which, he underlined, were at a third of what they were doing during his governorship. Reddy, whose conservative approach to regulation is lauded and described as one of the reasons which limited the impact of the 2008 global financial crisis, said the potential output growth rate has come down to 7 percent now from the 8.5 percent levels pre-crisis. He also explained that the drop is due to both international factors, where the global economic growth has declined and also domestic ones like the negative shocks.

Former RBI Governor further said that opinion is divided on how to look at these negative shocks, which he said are looked at by foreigners as institutional changes in India. He also said that all these three, some people take it has permanently affected potential output, whereas some others say it is a transitory shock. He noted that such shocks makes the methodology of estimating growth undependable in the short-term. He added that the RBI is expecting growth on a gross value added basis to shoot up to 7.8 percent by the fourth quarter of FY18, which it feels will pull the yearly growth rate up to 6.7 percent, which was maintained in the last policy review on December 6.

The CNX Nifty is currently trading at 10288.05, up by 22.40 points or 0.22% after trading in a range of 10285.70 and 10322.40. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 2.48%, Mahindra & Mahindra up by 1.98%, Lupin up by 1.94%, Eicher Motors up by 1.41% and Sun Pharma up by 1.33%. On the flip side, Bharti Infratel down by 1.53%, Adani Ports & SEZ down by 1.47%, ONGC down by 1.22%, Indiabulls Housing Finance down by 1.04% and NTPC down by 1.00% were the top losers.

All the Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 0.32 points or 0.02% to 1,721.57, Jakarta Composite was up by 6.6 points or 0.11% to 6,037.56, KOSPI Index rose 7.49 points or 0.3% to 2,471.49, Shanghai Composite added 26.08 points or 0.79% to 3,316.07, Taiwan Weighted surged 74.47 points or 0.72% to 10,473.09, Nikkei 225 increased 127.65 points or 0.56% to 22,938.73 and Hang Seng moved up 239.1 points or 0.83% to 28,878.95.