Benchmarks hit record highs in early deals; Nifty surpasses 10,550 mark

Indian equity benchmarks made a gap-up opening and are trading at all time high levels in early deals on Friday, with frontline gauges surpassing their crucial 10,550 (Nifty) and 34,150 (Sensex) levels. Sentiments remained up-beat with credit rating agency Fitch’s statement, which ahead of the first advance estimates for GDP growth for 2017-18, has expressed optimism about India’s medium-term economic prospects and said it would outstrip China’s growth. Traders also reacted positive to the latest report from the credit rating agency Moody’s that the government's Rs 2.11 lakh crore capital infusion in PSU banks would narrow the gap between the capital profiles of public and private sector banks.

Global cues too remained supportive with Asian markets rallying at this point of time, as investors around the world pile into equities at the start of 2018 amid robust economic data from the US to Europe to China, though the Hong Kong and Shanghai markets were flat. The US markets extended their bull-run and surged to fresh record highs in the last session.

Back home, stocks related to PSU banks remained in action as India’s biggest state-owned banks are likely to get Rs 80,000 crore of fresh capital this fiscal year after the government sought Parliament's nod for additional spending toward the infusion. The oil and gas stocks too remained in focus after the Directorate General of Hydrocarbons (DGH) unveiled a draft policy framework to promote enhanced recovery methods, with government's plan to offer fiscal incentives such as lower taxes and higher share in profit to companies to encourage them to boost oil and gas output from local ageing fields.

The BSE Sensex is currently trading at 34150.99, up by 181.35 points or 0.53% after trading in a range of 34020.84 and 34161.65. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index increased 0.68%, while Small cap index was up by 0.98%.

The top gaining sectoral indices on the BSE were Telecom up by 2.25%, Metal up by 1.41%, Consumer Durables up by 1.15%, Basic Materials up by 1.12% and Industrials was up by 0.87%, while Oil & Gas down by 0.18% was the lone losing index on the BSE.

The top gainers on the Sensex were Adani Ports up by 2.44%, Yes Bank up by 2.40%, Tata Steel up by 1.52%, Maruti Suzuki up by 1.43% and TCS up by 1.31%. On the flip side, ONGC down by 0.45%, Dr. Reddys Lab down by 0.37%, Tata Motors - DVR down by 0.33%, ICICI Bank down by 0.27% and Hero MotoCorp down by 0.09% were the top losers.

Meanwhile, in its third supplementary demand in the current fiscal, the government has sought parliamentary nod for additional Rs 80,000 crore bonds for the recapitalisation of public sector banks (PSBs). Lok Sabha gave its nod to the central government's request for additional spending to boost the capital health of Public Sector and now the matter will be heard in Rajya Sabha on 5th January.

The Parliament approval is in line with the government's larger plan to strengthen the Indian economy with total financial inclusion, and bank recapitalization is a major part of the initiative. Though, it’s still not declared but the major beneficiaries may include State Bank of India, Bank of Baroda, Canara Bank and Indian Bank. The latest approval of funds will be utilised by March this year.

Under the Indradhanush road map announced in 2015, the government had declared infusion of Rs 70,000 crore in state-owned banks over four years, while they will have to raise a further Rs 1.1 lakh crore from the market to meet their capital requirement in line with global risk norms, known as Basel-III. In October last year, Finance Minister Arun Jaitley approved the recapitalisation of PSBs to support credit growth and job creation, entailing mobilization of capital of Rs 2.1 lakh crore in the next two years, including re-capitalisation bonds of Rs 1.35 lakh crore.

The CNX Nifty is currently trading at 10554.70, up by 49.90 points or 0.48% after trading in a range of 10522.30 and 10555.10. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.71%, Adani Ports up by 2.39%, Tata Steel up by 1.62%, Vedanta up by 1.47% and Maruti Suzuki up by 1.44%. On the flip side, HPCL down by 0.85%, Indian Oil Corporation down by 0.58%, ONGC down by 0.53%, Dr. Reddys Lab down by 0.40% and GAIL India down by 0.37% were the top losers.

All the Asian markets are trading in green; Jakarta Composite rose 6.67 points or 0.11% to 6,298.99, Shanghai Composite increased 7.95 points or 0.23% to 3,393.66, Taiwan Weighted gained 11.26 points or 0.1% to 10,859.89, FTSE Bursa Malaysia KLCI jumped 11.86 points or 0.66% to 1,815.31, KOSPI Index surged 23.33 points or 0.95% to 2,489.79, Hang Seng added 55.11 points or 0.18% to 30,791.59 and Nikkei 225 was up by 144.69 points or 0.62% to 23,651.02.