Firm trade persists; Sensex holds 34,000 mark

Key Indian benchmarks remained bullish in late morning session, with both Sensex and Nifty trading with notable gains, aided by firm Asian cues. Traders were optimistic as Finance Minister Arun Jaitley assured that the positive impact of the economic measures being taken by the government would be seen in medium to long term. Some encouragement also came with global ratings agency, Fitch Ratings’ latest report stating that the country has the potential to grow at an average of 6.7 percent per annum over the next five years and will be the fastest growing large economies. Besides, buying in Telecom, Realty, Metal and Basic Materials stocks along with higher broader indices, too adding some gains on the street. Moreover, Global ratings agency, Moody’s optimism over the government’s recapitalization plan, also brought some cheer among the investors. The rating agency has said that the government’s ambitious plan to infuse Rs 2.11 lakh crore capital over the next two years into public sector banks (PSBs) is likely to help narrow the gap between the capital profiles of Indian public and private sector banks.

On the global front, Asian markets were trading in green, tracking the strong gains overnight on Wall Street and higher commodity prices. Back home, in scrip specific development, Gravita India traded higher after the company started commercial production of Lead Tetra Oxide (commercially known as Red Lead Oxide) by installing new state of art continuous process production plant at its Jaipur unit with a capacity of 7500 MTPA.

The BSE Sensex is currently trading at 34114.71, up by 145.07 points or 0.43% after trading in a range of 34020.84 and 34175.21. There were 24 stocks advancing against 6 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 0.70%, while Small cap index was up by 1.01%.

The top gaining sectoral indices on the BSE were Telecom up by 2.48%, Realty up by 1.63%, Metal up by 1.31%, Basic Materials up by 1.06% and Consumer Disc up by 0.95%, while Oil & Gas down by 0.37% and Energy down by 0.04% were the only losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 4.86%, Adani Ports & SEZ up by 3.52%, Tata Steel up by 1.71%, Indusind Bank up by 1.68% and Bharti Airtel up by 1.36%. On the flip side, Infosys down by 0.79%, ONGC down by 0.78%, ICICI Bank down by 0.44%, Wipro down by 0.24% and Axis Bank down by 0.18% were the top losers.

Meanwhile, the global ratings agency, Moody’s Investors Service in its latest report has said that the government’s ambitious plan to infuse Rs 2.11 lakh crore capital over the next two years into public sector banks (PSBs) is likely to help narrow the gap between the capital profiles of Indian public and private sector banks. Besides, Moody’s Indian affiliate, ICRA pointed that the deterioration in asset quality -- in terms of gross non-performing assets (GNPAs) are likely to peak by the end of FY2018, but elevated levels of provisioning on these NPAs will continue to negatively affect the banks until fiscal 2019.

The US-based agency, Moody’s believed that the capital infusion will also help public sector banks build their provisioning coverage ratios as they will be able to allocate much of their operating profits towards loan-loss provisioning without having to worry about the impact on their capital positions. It also pointed out that state-run banks' weak capital profile is their key credit weakness in comparison to their peers in the private sector. It highlighted that the average common equity tier 1 (CET1) ratio of rated PSBs as on September 2017, stood at 8.7% compared with that of 12.2% of rated private banks.

Moody’s further said that the package will facilitate the two key policy initiatives of non-performing loan (NPL) resolution and Basel III implementation. Apart from this, it noted that the move will also strengthen the government's bargaining position for pushing through some of its more fundamental reforms, such as those targeting corporate governance and industry consolidation.

The CNX Nifty is currently trading at 10541.85, up by 37.05 points or 0.35% after trading in a range of 10522.30 and 10562.80. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.95%, Adani Ports & SEZ up by 3.38%, Indusind Bank up by 1.60%, Tata Steel up by 1.53% and Bajaj Finance up by 1.43%. On the flip side, HPCL down by 1.43%, ONGC down by 0.90%, Infosys down by 0.77%, Indian Oil Corporation down by 0.72% and BPCL down by 0.72% were the top losers.

All Asian markets were trading in green; Jakarta Composite increased 5.83 points or 0.09% to 6,298.15, Shanghai Composite increased 7.96 points or 0.24% to 3,393.67, FTSE Bursa Malaysia KLCI increased 10.6 points or 0.59% to 1,814.05, Hang Seng increased 20.19 points or 0.07% to 30,756.67, KOSPI Index increased 27.87 points or 1.13% to 2,494.33, Taiwan Weighted increased 31.17 points or 0.29% to 10,879.80 and Nikkei 225 increased 192.19 points or 0.82% to 23,698.52.