Key indices continue to trade in green territory

Key benchmark indices continued to trade in green territory in early afternoon session, on account of buying in front line blue chip counters. Sentiments on the street remained in optimistic mood with the survey report showing that activity in India's services industry bounced back to modest growth in December after contracting in the previous month, as new business orders stabilised and price increases slowed. The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 50.9 in December from 48.5 in November. Moreover, buying appeared in Metal, PSU, Basic Materials and Capital Goods stocks along with positive trend at other Asian markets, were continued supporting the street. However, some caution lingered in the market ahead of December-quarter results starting next week and the annual budget due next month. In the currency front, the rupee pared its early losses to recover by 10 paise to 63.43 per dollar in early deals on good bouts of dollar selling from banks and exporters. In scrip specific development, KM Sugar Mills was up by around three percent on selling its 7.30 lakh equity shares (73% stake holding) of KM Energy, subsidiary of the company.

On the global front, Asian markets were trading mostly in green, as solid economic data from the United States and Germany reinforced investors' optimism.Back home, the BSE Sensex is currently trading at 33892.26, up by 98.88 points or 0.29% after trading in a range of 33802.13 and 33916.75. 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 0.48%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Metal up by 1.82%, PSU up by 1.31%, Basic Materials up by 1.25%, Capital Goods up by 1.22% and Consumer Durables up by 1.10%, while Realty down by 0.29%, IT down by 0.16%, Auto down by 0.15% and TECK down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.71%, Dr. Reddy’s Lab up by 2.39%, SBI up by 2.13%, Coal India up by 1.96% and Larsen & Toubro up by 1.83%. On the flip side, Sun Pharma down by 0.90%, Power Grid down by 0.64%, Hero MotoCorp down by 0.61%, Wipro down by 0.56% and Yes Bank down by 0.44% were the top losers.

Meanwhile, as part of the  banks recapitalisation plan to boost capital adequacy ratio, the Ministry of Finance has given its nod to the proposal for capital infusion of Rs 7,577 crore in six weak public sector banks (PSBs). All of these banks that would be receiving capital support are those who have been put under the prompt corrective action of the Reserve Bank of India (RBI). The six lenders, which will receive capital through preferential issue of shares are Bank of India, IDBI Bank, Central Bank of India, Dena Bank, Bank of Maharashtra and UCO Bank.

The recapitalisation is part of the Indradhanush plan of the government which promised Rs 70,000 crore over period of four years ending March 2019. The actual fund infusion will happen in the next few weeks after necessary regulatory approval and nod from the shareholders. While the government decides the mode for recapitalisation of all state-run banks, it advanced the release of funds to these six banks to help them meet their equity requirements and enable them to resume normal business and help them come out of prompt corrective action.

In October, the Union government had unveiled an ambitious plan to infuse Rs 2.11 lakh crore capital over the next two years into public sector banks (PSBs) that are saddled with high, non-performing assets (NPAs) and facing the prospect of having to take haircuts on loans stuck in insolvency proceedings. The NPAs of public sector banks have increased from Rs 2.75 lakh crore in March 2015 to Rs 7.33 lakh crore as on June 2017.

The CNX Nifty is currently trading at 10474.80, up by 31.60 points or 0.30% after trading in a range of 10441.45 and 10475.90. There were 26 stocks advancing against 23 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Tata Steel up by 2.59%, Dr. Reddy’s Lab up by 2.33%, Coal India up by 2.28%, SBI up by 2.25% and Larsen & Toubro up by 2.09%. On the flip side, HCL Tech. down by 1.42%, Sun Pharma down by 0.99%, Hero MotoCorp down by 0.66%, Eicher Motors down by 0.61% and BPCL down by 0.59% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 6.43 points or 0.19% to 3,375.53, FTSE Bursa Malaysia KLCI rose 7.07 points or 0.39% to 1,799.86, Taiwan Weighted surged 47.06 points or 0.44% to 10,848.63, Hang Seng added 159.06 points or 0.52% to 30,720.01 and Nikkei 225 inched up 741.39 points or 3.26% to 23,506.33.

On the flip side, KOSPI Index decreased 19.89 points or 0.8% to 2,466.46 and Jakarta Composite was down by 14.03 points or 0.22% to 6,237.45.