Bourses add strength to trade at record highs

Indian markets continue to hold their gains near the record high levels in the noon session, with both the major benchmarks trading up by about half a percent. Traders were getting encouragement from the rise in Asian peers, which most of them edged higher in the last day of trade before Christmas. On the domestic front the gains were being induced from Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy’s statement that India is expected to be a $ 6.5-7 trillion economy by 2030. Back on street, there was broad based buying and apart from the sectoral gauges the midcap and small cap stocks too were supporting the upmove for the day. The banking pack too seems to have overlooked the IMF report stating that India's financial sector is facing considerable challenges with high non-performing assets and slow deleveraging and repair of corporate balance sheets testing the resilience of the banking system and holding back growth. It also called on the Indian government to restructure state-run banks and reduce its stakes in them.

On the sectoral front, IT and Tech blocks were powering the markets, closely followed by industrial, utilities and auto stocks, while some weakness was being witnessed in the metal and consumer durable stocks. In scrip specific development, Tata Consultancy Services (TCS) was up by over 2 percent after the leading IT exporter bagged a $ 2.25-billion, the largest-ever outsourcing contract from Nielsen, a television rating measurement firm.

The BSE Sensex is currently trading at 33929.95, up by 173.67 points or 0.51% after trading in a range of 33767.73 and 33954.57. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices too were trading in green; the BSE Mid cap index was up by 0.33%, while Small cap index gained 0.80%.

The top gaining sectoral indices on the BSE were IT up by 1.23%, TECK up by 1.11%, Telecom up by 1.05%, Industrials up by 0.83%, Utilities up by 0.78%, while Consumer Durables down by 0.19% and Metal down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.27%, TCS up by 2.06%, Bharti Airtel up by 1.92%, ONGC up by 1.60% and SBI up by 1.37%. On the flip side, Coal India down by 0.76%, Dr. Reddys Lab down by 0.54%, Tata Steel down by 0.39%, Power Grid Corpn. down by 0.37% and Hero MotoCorp down by 0.33% were the top losers.

meanwhile, the Reserve Bank of India (RBI) in its half-yearly Financial Stability Report (FSR) has warned against further downside risk for banks, as asset quality concerns are far from resolved and has said that the gross non-performing assets (NPAs) in the Indian banking sector shot up to 10.2 percent as of the September quarter, primarily led by private sector lenders. RBI’s stress tests suggest that in the baseline scenario, gross NPAs of the banking sector may rise to 10.8 percent in March 2018 and further to 11.1 percent by September 2018. However, it added that stress in the Indian banking sector remains high but it may be close to bottoming out.

According to the FSR, overall risk to financial system remained ‘stable’. Between March and September, the GNPA advances ratio of scheduled commercial banks (SCBs) increased from 9.6 percent to 10.2 percent, and the stressed advances ratio marginally increased from 12.1 percent to 12.2 percent. Public sector banks (PSBs) registered Gross NPA ratio at 13.5 percent and stressed advances ratio at 16.2 percent in September. It also noted that if the macro conditions deteriorate, CRAR or capital-to-risk (weighted) assets ratio of SCBs goes below the minimum regulatory requirements. Under the severe stress scenario, the system level CRAR declines from 13.5 percent in September 2017 to 11.5 percent by September 2018.

The central bank further said that the recent capitalisation plan announced by the government for PSBs is expected to significantly augment capital buffers of affected banks as also the credit growth. The FSR said that SCBs have continued to be the dominant players accounting for nearly 47 percent of the bilateral exposure followed by asset management companies managing mutual funds, NBFCs, insurance companies, housing finance companies and all-India financial institutions. The report also said that the overall investment climate remains challenging despite registering an improvement from the first quarter of the current fiscal. RBI added that the global economy has picked up steam and the growth momentum appears sustainable.

The CNX Nifty is currently trading at 10484.75, up by 44.45 points or 0.43% after trading in a range of 10448.25 and 10492.35. There were 31 stocks advancing against 18 stocks declining on the index, while two stocks remained unchanged.

The top gainers on Nifty were TCS up by 2.39%, Bharti Airtel up by 1.83%, ONGC up by 1.54%, Infosys up by 1.46% and SBI up by 1.40%. On the flip side, Ultratech Cement down by 0.94%, Lupin down by 0.85%, Coal India down by 0.73%, HCL Tech. down by 0.72% and Vedanta down by 0.57% were the top losers.

Most of the Asian markets were trading in green, FTSE Bursa Malaysia KLCI was tad higher by 0.21 points or 0.01% to 1,751.42, KOSPI Index gained 10.71 points or 0.44% to 2,440.54, Nikkei 225 was up by 36.66 points or 0.16% to 22,902.76, Taiwan Weighted added 48.3 points or 0.46% to 10,537.27 and Hang Seng was higher by 89.97 points or 0.31% to 29,457.03.

On the other hand, Jakarta Composite declined by 11.3 points or 0.18% to 6,172.09 and Shanghai Composite was down by 3.48 points or 0.11% to 3,296.58.