Markets at day’s high; Metal stocks shine

Key Indian equity benchmarks extended gains in late morning session to trade at intraday high points, aided by positive cues from other Asian markets along with heavy buying in Metal, Basic Materials and Healthcare stocks. Investors’ sentiments were optimistic with the Niti Aayog vice-chairman Rajiv Kumar’s statement that India will emerge as a model for the rest of the world, with successful completion of three transitions such as economic, political and social. Some support also came with the private report stating that exports of India-made retail and lifestyle products clocked a 16% growth in 2017, over the same period last year. It further noted that in terms of growth, India has surpassed China which traditionally led from the region, and now stands at number 3. Besides, the broader markets were also trading with the gains of over a percent each, following the larger peers. On the sectoral front, steel stocks were trading in green, as India Ratings and Research (Ind-Ra) has revised the outlook on the steel sector to stable for FY19 from negative in FY18, led by demand growth in domestic and global markets.

On the global front, Asian markets were trading in green, following the mostly positive cues overnight from Wall Street after the yield on the benchmark 10-year US Treasury note retreated from the four-year high set in the previous session. Back home, in scrip specific development, Seamec traded higher after the company entered into a contract for the charter hire of vessel ‘Revelation’ with Kreuz Subsea, for undertaking a job in Offshore West Coast of India.

The BSE Sensex is currently trading at 34016.65, up by 197.15 points or 0.58% after trading in a range of 33832.00 and 34017.09. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.18%, while Small cap index was up by 1.13%.

The top gaining sectoral indices on the BSE were Metal up by 2.05%, Basic Materials up by 1.56%, Healthcare up by 1.31%, Telecom up by 1.25% and Bankex up by 1.03%, while IT down by 0.40% and TECK down by 0.13% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.40%, Yes Bank up by 2.65%, Dr. Reddy’s Lab up by 1.95%, Bharti Airtel up by 1.84% and Sun Pharma up by 1.82%. On the flip side, TCS down by 1.45%, Infosys down by 1.01%, Asian Paints down by 0.75%, Hero MotoCorp down by 0.50% and Mahindra & Mahindra down by 0.44% were the top losers.

Meanwhile, credit ratings agency, Crisil Ratings in its latest report has said that asset quality of micro-finance institutions (MFIs) comprising small finance banks as well as non-bank MFIs has shrugged off the impact of government’s demonetization move and stabilized since June 2017. It highlighted that portfolio delinquencies, for a representative set of MFIs, measured in terms of 30 and 60 days past due (dpd), have improved to 5.6 percent and 5.3 percent, respectively, as on December 2017, as compared to 7.6 percent and 6.8 percent, respectively, as on June 2017.

The rating agency explained that asset quality performance has improved, as evidenced by reducing portfolio delinquencies and noted that cumulative collection efficiencies have increased to over 99 percent for disbursements since April 2017. Besides, it said that high degree of investor support was reflected in the significant equity and debt raised after demonetization. It also pointed out that the reduction in delinquencies shows that borrowers are paying more than one instalment and there is recovery in the higher-delinquency buckets. However, it noted that the weakening in asset quality was not pervasive post demonetization.

As per the report, asset quality of MFIs in Tamil Nadu, Kerala, Odisha, West Bengal and Bihar remained largely resilient despite demonetisation and its outcome, and these states continue to show strong collection performance with 30 dpd staying below 2 percent. It also stated that improvement in asset quality performance in Uttar Pradesh, Maharashtra and Karnataka has been significant, which were affected the most due to demonetization. It noted that strong investor appetite for both equity and debt capital market issuances have helped MFIs tide over the challenges. Since demonetisation, MFIs have raised around Rs 4,000 crore of equity and Rs 7,000 crore of debt.

The CNX Nifty is currently trading at 10454.70, up by 72.00 points or 0.69% after trading in a range of 10396.65 and 10457.65. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.65%, Aurobindo Pharma up by 2.93%, Yes Bank up by 2.77%, Vedanta up by 2.75% and UPL up by 2.27%. On the flip side, GAIL India down by 2.42%, TCS down by 1.67%, Asian Paints down by 0.97%, Infosys down by 0.86% and Eicher Motors down by 0.84% were the top losers.

All the Asian markets were trading in green; Shanghai Composite increased 2.54 points or 0.08% to 3,271.10, FTSE Bursa Malaysia KLCI increased 2.71 points or 0.15% to 1,857.78, KOSPI Index increased 28.76 points or 1.19% to 2,443.04, Jakarta Composite increased 43.14 points or 0.65% to 6,636.20, Taiwan Weighted increased 132.17 points or 1.24% to 10,794.55, Nikkei 225 increased 156.49 points or 0.72% to 21,892.93 and Hang Seng increased 264.06 points or 0.85% to 31,229.74.