Sensex, Nifty hover near highest point of the day

Indian equity benchmarks continued their momentum to trade near highest points of the day in the early afternoon session, as buying momentum in the equities persisted. Sentiments on the street improved further with report that the International Monetary Fund (IMF) has revised its forecast for world economic growth in 2018 and 2019, saying sweeping US tax cuts were likely to boost investment in the world’s largest economy and help its main trading partners. Adding to the market cheer, PwC Survey report stated that India has emerged as the fifth most attractive market for investments and the optimism over global economic growth is at a record level. Moreover, strong Q3 earnings by some bluechip companies along with positive trend at other Asian markets, aided the key indices' upward trajectory. All the sectoral indices edged up on the bourses with Metal, Basic Materials, and Oil & Gas stocks rising the most. The broader markets too were broadly in line with the benchmark indices. In scrip specific development, Speciality Restaurants was up by over two and half percent after resuming commercial operations at its ‘Flame & Grill’ restaurant located at South City Mall, Kolkata with effect from January 21, 2018.

On the global front, Asian markets were trading mostly in green, as an upbeat forecast for global economic growth and the end of the US government shutdown helped lift sentiment. Back home, the BSE Sensex is currently trading at 36074.45, up by 276.44 points or 0.77% after trading in a range of 35863.98 and 36084.70. 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 1.34%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were Metal up by 5.49%, Basic Materials up by 2.08%, Oil & Gas up by 1.73%, Energy up by 1.62% and PSU up by 1.54%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were Tata Steel up by 4.48%, Coal India up by 2.80%, Infosys up by 2.22%, NTPC up by 2.03% and ICICI Bank up by 1.91%. On the flip side, Asian Paints down by 1.24%, Wipro down by 0.95%, HDFC Bank down by 0.62%, TCS down by 0.57% and Tata Motors down by 0.44% were the top losers.

Meanwhile, the State Bank of India (SBI) in its report titled ‘Union Budget: If wishes were horses!’ has stated that there is a need to increase the income tax exemption limit by Rs 50,000 to Rs 3,00,000, as the implementation of 7th Pay Commission has increased the personal disposable income. It noted that due to such move, around 75 lakh tax payers will be exempted from income tax. Besides, it pointed out that if the exemption limit of interest payments under housing loan is increased to Rs 2,50,000 for existing home loan buyers, from Rs 2,00,000 now, it will benefit 75 lakh home loan buyers and cost the government just about Rs 7,500 crore.

The report also pitched for incentivising savings through bank deposits. In an effort to incentivise savings, it said that the government can exempt interest of savings bank deposits. It also pointed out that the exemption limit on TDS on interest on term deposits with banks may be raised from the present limit of Rs 10,000 per annum. Also, it said that the lock-in period for tax savings term deposits needs to be reduced to 3 years from the present 5 years and these deposits should be brought under EEE (exempt, exempt, exempt) tax regime.

The SBI report further said that budget should give more priority to agriculture, MSME, infrastructure and affordable housing. It indicated that agriculture reforms should aim at re-examination of legally created structures whose provisions are restrictive and create barriers to free trade. Talking on the investment revival, the report said that capital subsidy in case of delayed projects equal to cost overrun may be provided. It added that cost overrun may be funded at concessional interest rate by the government in such cases.

The CNX Nifty is currently trading at 11063.05, up by 96.85 points or 0.88% after trading in a range of 10994.55 and 11064.80. There were 35 stocks advancing against 14 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Vedanta up by 6.58%, Hindalco up by 5.74%, Tata Steel up by 4.59%, GAIL India up by 3.25% and Cipla up by 2.93%. On the flip side, Eicher Motors down by 1.81%, Zee Entertainment down by 1.72%, Ambuja Cement down by 1.55%, Wipro down by 1.29% and Bosch down by 1.23% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted increased 21.65 points or 0.19% to 11,253.11, Shanghai Composite rose 23.38 points or 0.67% to 3,524.74, KOSPI Index added 34.49 points or 1.38% to 2,536.60, Jakarta Composite surged 73.97 points or 1.14% to 6,574.50, Nikkei 225 increased 307.82 points or 1.29% to 24,124.15 and Hang Seng inched up 428.17 points or 1.32% to 32,821.58.

On the flip side, FTSE Bursa Malaysia KLCI was down by 1.45 points or 0.08% to 1,831.70.