Benchmarks continue firm trade in morning session

Indian equity benchmarks continued their firm trade in morning session on account of buying in front line blue chip counters. The rupee opened up against dollar on account of selling of American currency by banks and exporters. Continued foreign fund inflows and weakness in the greenback against other currencies overseas supported the rupee. Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 581.43 crore on Friday, as per provisional data released by the stock exchanges. Sentiments remained up-beat after RBI data enlightened that credit growth after a long gap grew in double digits to 10.65% at Rs 80,96,727 crore in the fortnight ended December 22, 2017 due to the base effect. The advances had stood at Rs 73,17,391 crore in the fortnight ended December 23, 2016. The agriculture ministry said that the country’s agriculture sector is expected to grow higher than projected 2.1% growth by the Central Statistics Office (CSO) for the current fiscal, following better rabi crop prospects. The ministry added that the agriculture sector can, therefore, be expected to register a much higher GVA for the year 2017-18, when final estimate figures are released. 

The street shrugged off the CSO’s first advance estimates of Gross Domestic Product (GDP) growth for current financial year which highlighted that the Indian economy is expected to grow at a slower 6.5% in 2017-18 compared to the 7.1% in 2016-17. According to CSO, the GDP at constant (2011-12) prices for 2017-18 is likely to attain a level of Rs 129.85 lakh crore. Separately, India’s per capita income, a gauge for measuring living standard, is likely to witness a slower growth of 8.3% at Rs 1,11,782 in FY 2017-18. In 2016-17, per capita income of Indians had grown by 9.7% to Rs 1,03,219. Meanwhile, telecom stocks Bharti Airtel and Idea Cellular were trading in red after Reliance Jio Infocomm (Jio) unleashed another price disruption in an heavily debt-riddled industry, wherein all existing tariff plans with 1GB data have been revised to offer either 50% more data or a Rs 50 discount, a move which could hit the average revenue per user of rivals such as Bharti Airtel, Vodafone India and Idea Cellular.

Traders were seen piling up position in Healthcare, Realty and IT stocks, while selling was witnessed in Telecom sector stocks. In scrip specific development, Sobha was trading firm following strong sales bookings for quarter ended December 2017. The realty firm’s sales bookings increased 92 percent to Rs 750.9 crore during the third quarter this fiscal on higher volumes and better average realization. Aarti Drugs was trading in green as the company is going to consider buyback of its shares. A meeting of board of directors of the company is scheduled to be held on January 08 to consider proposal of buyback of the fully paid-up equity shares of the company including matters related/incidental thereto.

On the global front, the Asian markets were trading mostly in green, after Wall Street boasted its best start to a year in over a decade. China’s foreign exchange reserves rose to their highest in more than a year in December, blowing past estimates, as tight regulations and a strong yuan continued to discourage capital outflows. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,300 and 10,600 levels respectively. The market breadth on BSE was positive in the ratio of 1745:829, while 110 scrips remained unchanged.

The BSE Sensex is currently trading at 34363.26, up by 209.41 points or 0.61% after trading in a range of 34216.33 and 34367.22. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.84%, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.97%, Realty up by 1.27%, IT up by 1.26%, Capital Goods up by 1.04% and Oil & Gas up by 0.91%, while Telecom down by 1.93% was the sole losing index on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.08%, Infosys up by 1.49%, Yes Bank up by 1.49%, Dr. Reddy’s Lab up by 1.31% and Larsen & Toubro up by 1.29%.

On the flip side, Bharti Airtel down by 3.19%, Asian Paints down by 0.45%, Tata Steel down by 0.37%, Adani Ports & Special Economic Zone down by 0.16% and Hindustan Unilever down by 0.09% were the top losers.

Meanwhile, pointing that the Gujarat verdict and upcoming polls will have a “significant” impact on economic policymaking in the near future, credit rating agency ICRA has said that the narrower-than-expected win in Gujarat and upcoming polls in other states will lead to a reorientation of priorities for the government with a greater focus expected on the farm and small businesses sectors.

The head of a domestic rating agency Naresh Takkar said that “Gujarat was surprisingly difficult. The kind of hold which the PM and the BJP have over Gujarat, they may like to interpret the results more deeply”.  He said “they still have 18 months, so the government should be in a position to re-orient its priorities. It is committed to reviving the economy and reforms, but the political outlook, (of) which they will have a better understanding now, they would re-balance their priorities”.

Takkar further said that the increased spends which it may entail will have repercussions on fiscal deficit and the government may go for relaxed targets in the upcoming budget. He said that “There is going to be a pressure. They may start looking at fiscal (deficit) not as a hard-coded number but have some kind of a band within which they would like to operate rather than sticking to a headline number”.

He also warned that spending may have some inflationary impact, and rising commodity and oil prices will only aggravate the issue and said that because of such policies they should expect a prolonged pause from the Reserve Bank in its rates stance and there will not be any softening in lending rates.

The CNX Nifty is currently trading at 10619.10, up by 60.25 points or 0.57% after trading in a range of 10588.55 and 10621.85. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 4.13%, Tech Mahindra up by 2.97%, Lupin up by 2.84%, BPCL up by 2.35% and UPL up by 1.85%.

On the flip side, Bharti Airtel down by 3.19%, Asian Paints down by 0.69%, Tata Steel down by 0.45%, Vedanta down by 0.41% and Hindalco down by 0.40% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 6.29 points or 0.35% to 1,824.26, Jakarta Composite increased 8.28 points or 0.13% to 6,362.02, KOSPI Index increased 13.07 points or 0.52% to 2,510.59, Shanghai Composite increased 13.89 points or 0.41% to 3,405.64 and Taiwan Weighted increased 29.31 points or 0.27% to 10,909.11.

On the other hand, Hang Seng decreased 16.28 points or 0.05% to 30,798.36.

Japan stock exchange was closed on account of National holiday.