Sensex, Nifty extend gains; IT stocks in demand

The local equity bourses extended their gains in late afternoon session, despite weak opening in European markets. Traders took encouragement with a private report stating that India’s medium-term potential growth is likely to be above 7%, backed by policy reforms, higher investments and stable global growth environment. The global financial services major further noted that India ranks higher in medium-term growth potential compared to other emerging markets like Brazil, Russia, Indonesia and China. Sentiments took some support with Reserve Bank of India’s decision to constitute a five-member committee under the chairmanship of YH Malegam, a former RBI board member, in order to look into the reasons for high divergence observed in asset classification and provisioning in the credit portfolio of banks. Apart from this, the expert committee will check the factors leading to rising incidence of fraud in the banking system. Some support were also came in with Canadian Prime Minister Justin Trudeau’s statement that corporate India has committed $1 billion worth of investments in his country, which will create over 5,000 jobs. Furthermore, IT stocks remained in demand in noon deals, with TCS gaining the most among industry majors.

On the global front, European markets were trading in red, as investors focused on further earnings reports and data releases. However, Asian markets were trading in green. Back home, in scrip specific development, Sadbhav Infrastructure Project soared after the company has been declared as the lowest bidder (L1) for the HAM Project by NHAI on February 21, 2018.

The BSE Sensex is currently trading at 33829.29, up by 125.70 points or 0.37% after trading in a range of 33702.50 and 33911.36. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.17%, while Small cap index was down by 0.20%.

The top gaining sectoral indices on the BSE were IT up by 1.66%, TECK up by 1.36%, FMCG up by 0.79%, Energy up by 0.43% and Bankex up by 0.31%, while Metal down by 1.69%, Basic Materials down by 1.14%, Healthcare down by 0.80%, Capital Goods down by 0.70% and Realty down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.30%, ITC up by 2.04%, ONGC up by 1.60%, Kotak Mahindra Bank up by 1.24% and SBI up by 1.13%. On the flip side, Sun Pharma down by 4.00%, Tata Steel down by 2.30%, Indusind Bank down by 1.17%, Tata Motors down by 1.12% and Bajaj Auto down by 0.97% were the top losers.

Meanwhile, amid signs of improvement in projects such as toll roads and wind, the credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has revised the infrastructure sector outlook to stable for the next financial year (FY19) from negative in the current fiscal year (FY18). However, the report noted that the sector is showing signs of stability even though it is still in stress.

As per the report titled ‘FY19 Infrastructure Outlook: Light at the End of the Tunnel’, toll roads projects came out of pressure during FY17 and going further have showed visible improvements in 2018. Besides, the rating agency highlighted that though the wind sector remained under performance, protection from fixed capacity charges and built up of reserves provide stability to the ratings.

Apart from the infrastructure, Ind-Ra also revised the outlook of telecom sector to negative-to-stable from negative. However, it expects that the sector continues to exhibit significant pressure on its average revenue per user despite industry consolidation and added that FY19 to remain a challenging year for incumbent telecom operators as reflected in Negative Outlook on the ratings. Further, it kept outlooks for thermal power, oil and gas, power, ports and airports to unchanged.

The CNX Nifty is currently trading at 10385.90, up by 25.50 points or 0.25% after trading in a range of 10349.60 and 10426.10. There were 26 stocks advancing against 23 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Tech Mahindra up by 3.06%, TCS up by 2.41%, HCL Tech. up by 2.05%, ITC up by 1.94% and ONGC up by 1.71%. On the flip side, Sun Pharma down by 4.15%, Hindalco down by 3.42%, Tata Steel down by 2.32%, Bajaj Finance down by 2.18% and Vedanta down by 1.57% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 14.53 points or 0.6% to 2,429.65, Nikkei 225 increased 45.71 points or 0.21% to 21,970.81, Taiwan Weighted increased 293.35 points or 2.81% to 10,714.44 and Hang Seng increased 558.26 points or 1.81% to 31,431.89. On the flip side, Jakarta Composite decreased 30.59 points or 0.46% to 6,632.29 and FTSE Bursa Malaysia KLCI decreased 1.52 points or 0.08% to 1,854.47.

All European markets were trading in red; Germany’s DAX decreased 29.3 points or 0.23% to 12,458.60, UK’s FTSE 100 decreased 13.65 points or 0.19% to 7,233.12 and France’s CAC decreased 11.67 points or 0.22% to 5,278.19.