Stock markets extend gains; Healthcare, Capital Goods stocks shine

Indian stock markets extended their gains in the early noon session with Nifty and Sensex gaining more than half a percent on the back of heavy buying in Healthcare, Capital Goods and Bankex stocks. Some support came with report stating that the government expects bad loan recoveries to exceed Rs 1.80 lakh crore target for the current financial year, enthused by the impact of new insolvency and bankruptcy law. Investors also remained optimistic with Prime Minister Narendra Modi stating that India is going through a massive transformative phase and international agencies say the country will drive the growth of the global economy in the coming decade as he invited the Indian community in Japan to contribute actively in building a 'new India'. Traders also took note of the Prime Minister's Economic Advisory Council (PMEAC) Chairman Bibek Debroy’s statement that the four-rate slab structure of the Goods and Services Tax (GST) regime is likely to be reduced to three as the process of rationalising India's new indirect tax regime proceeds further. Meanwhile, broader markets outperformed frontline indices and the market breadth on BSE was positive; out of 2296 stocks traded, 1484 stocks advanced, while 678 stocks declined and 134 stocks remained unchanged on the BSE.

On the global front, Asian markets were trading mostly in red with US stock futures turning down and Chinese markets in the red terrain on fresh signs of cooling in the world’s second-biggest economy. Back home, oil & gas sector was trading in green with report that the oil marketing companies (OMCs) cut the petrol and diesel prices for the 12th straight day on Monday (October 29) amid softening global crude prices. The prices of petrol and diesel in Delhi today are Rs 79.75 per litre (down by Rs 0.30) and Rs 73.85 per litre (down by Rs 0.20), respectively.

The BSE Sensex is currently trading at 33527.14, up by 177.83 points or 0.53% after trading in a range of 33341.80 and 33583.52. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.38%, while Small cap index was up by 1.11%.

The top gaining sectoral indices on the BSE were Healthcare up by 3.22%, Capital Goods up by 2.00%, Bankex up by 1.55%, Industrials up by 1.52% and PSU up by 1.36%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 8.57%, Axis Bank up by 5.91%, SBI up by 4.15%, Sun Pharma up by 2.95% and Larsen & Toubro up by 2.94%. On the flip side, Kotak Mahindra Bank down by 3.91%, Indusind Bank down by 3.64%, HDFC Bank down by 2.66%, Hindustan Unilever down by 2.19% and HDFC down by 2.14% were the top losers.

Meanwhile, the government is expecting that bad loan recoveries are likely to surpass Rs 1.80 lakh crore target for the current financial year (FY19), through the new Insolvency and Bankruptcy Code (IBC) and other means. The Finance Ministry said some big accounts are in the process of getting resolved, while some more are lined up for resolution under the IBC.

Banks hope to write back more than Rs 1 lakh crore alone from the resolution of 12 Non-performing asset (NPA) cases referred to insolvency proceedings by the Reserve Bank of India (RBI) in its first list. Banks recovered Rs 36,551 crore in the first quarter of 2018-19. During 2017-18, banks had recovered Rs 74,562 crore.

Satisfied with the progress of IBC, Finance Minister Arun Jaitley had said ‘now people have become broadly aware that the rules of the game in India have changed. The banks won't chase you anymore, you will have to chase them.’ He had said as a result of this, recoveries have picked up and added that recoveries are not just because resolutions have taken place in the NCLT but they have also picked up because of fear that if they cross redline they will be condemned to IBC process.

The CNX Nifty is currently trading at 10083.90, up by 53.90 points or 0.54% after trading in a range of 10020.35 and 10102.15. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 8.44%, Axis Bank up by 5.91%, Dr. Reddys Lab up by 5.39%, SBI up by 4.17% and Indiabulls Housing up by 3.93%. On the flip side, Kotak Mahindra Bank down by 3.89%, Indusind Bank down by 3.75%, HDFC Bank down by 2.66%, HDFC down by 2.33% and Yes Bank down by 2.10% were the top losers.

Most of the Asian stocks were trading in red; Nikkei 225 decreased 34.80 points or 0.16% to 21,149.80, Hang Seng declined 57.480 points or 0.23% to 24,660.15, KOSPI fell 29.74 points or 1.49% to 1,997.41, Shanghai Composite reduced 53.88 points or 2.12% to 2,544.97 and Jakarta Composite was down 14.59 points or 0.25% to 5,770.33.

On the other hand, Straits Times increased 15.30 points or 0.51% to 2,987.32 and Taiwan Weighted was up 27.14 points or 0.29% to 9,516.32.