Markets maintain gaining momentum; Metal, Energy stocks surge

Indian markets maintained their gaining momentum in the early noon session with Sensex and Nifty posting gains of more than 370 and 100 points respectively, on positive global cues after Federal Reserve Chairman Jerome Powell said that the policy rate was 'just below' neutral, easing worries of a faster pace of interest rate hikes next year. Heavy buying ahead of November month F&O expiry later in the day also boosted the domestic sentiments. The market mood remained buoyant on FII buying. Foreign portfolio investors bought shares worth Rs 961.26 crore on November 28, as per provisional data from the stock exchanges. On the NSE sectoral front, barring Nifty IT all other counters were gaining. Nifty IT was losing as the rupee appreciated against the dollar. While, on the BSE sectoral front, Metal, Energy and FMCG counters were gaining the most. In stock specific development, Shares of Reliance Industries gained after arm has recently acquired a substantial stake in media startup New Emerging World of Journalism (NEWJ) with an initial investment of Rs 10.3 million.  Besides, the market breadth was favoring positive trend; there were 1109 shares on the gaining side against 1073 shares on the losing side while 125 shares remained unchanged.  

On the global front, Asian markets were trading mostly in green, tracking a surge on Wall Street. Back home, some support came with a private report stating that International Finance Corporation (IFC) has invested a record $2.6 billion in India in 2017-18 -- a rise of 136% over the figure two years ago -- in the key priority areas of infrastructure, logistics, inclusion, and sustainability. 

The BSE Sensex is currently trading at 36091.23, up by 374.28 points or 1.05% after trading in a range of 35946.24 and 36122.99. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.39%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were Metal up by 1.40%, Energy up by 1.30%, FMCG up by 1.22%, Consumer Durables up by 1.16% and Auto up by 0.94%, while Power down by 0.60%, Utilities down by 0.51%, Telecom down by 0.19%, PSU down by 0.07% and IT down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 3.55%, Mahindra & Mahindra up by 2.76%, Hindustan Unilever up by 2.46%, Bajaj Auto up by 2.19% and Reliance Industries up by 2.16%. On the flip side, Yes Bank down by 6.93%, ONGC down by 2.07%, Coal India down by 1.82%, NTPC down by 1.53% and TCS down by 0.43% were the top losers.

Meanwhile, global rating agency, Fitch ratings in its latest report has said that the Reserve Bank of India (RBI) board’s decision to restructure stressed standard assets of micro, small and medium enterprises (MSME) borrowers with aggregate credit facilities of up to Rs 25 crore is a ‘step backwards’ and the risks to the banking sector will emanate in the coming 6-9 months. It noted that relaxation of lending norms to spur growth is never a good strategy, and added that the legacy problem loans will continue to be a bigger drag on the MSME sector's asset quality until March 2019.

Talking about the RBI board's decision to extend the timeline for the full implementation of Basel 3 norms by a year, the rating agency said that the move is certainly credit negative for Indian public sector banks (PSBs) as it reflects the sector's poor capitalisation, particularly that of state-owned banks, and their inability to meet minimum regulatory requirements. It also said that there was a stand-off between the RBI and the Finance Ministry over several issues, including easier funding norms for the MSME sector, implementation of the capital adequacy norms and economic capital framework of the central bank.

According to the report, non-banking finance companies (NBFCs) continue to remain a risk as a result of their aggressive lending, especially to real estate and MSME, in the past. It may see slippages from the latter sectors (real estate, SMEs) in the near-term if challenges in terms of liquidity continue. However, it said that better rated non-banks with good track record and market reputation face much lower rollover risk as compared to ones where risks are elevated although funding costs have risen across the board

The CNX Nifty is currently trading at 10832.70, up by 103.85 points or 0.97% after trading in a range of 10782.35 and 10836.15. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.38%, Hindalco up by 3.36%, Vedanta up by 3.27%, Bajaj Finance up by 3.11% and Bajaj Finserv up by 3.04%. On the flip side, Yes Bank down by 7.22%, ONGC down by 2.31%, Coal India down by 1.78%, HCL Tech. down by 1.45% and TCS down by 1.01% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 increased 85.58 points or 0.38% to 22,262.60, Straits Times increased 23.39 points or 0.75% to 3,117.87, KOSPI increased 5.87 points or 0.28% to 2,114.09, Taiwan Weighted increased 1.05 points or 0.01% to 9,885.36 and Jakarta Composite increased 87.93 points or 1.45% to 6,079.18.

On the flip side, Hang Seng decreased 247.130 points or 0.93% to 26,435.43 and Shanghai Composite decreased 10.40 points or 0.4% to 2,591.34.