Bourses maintain upbeat mood in afternoon deals

Indian equity indices maintained their upbeat mood in afternoon session, tracking positive cues from other Asian markets amid heavy buying by domestic institutional investors. Sentiments remained up-beat with data showing that India's retail inflation hit an 18-month low, rising 2.19 percent in December as compared with 2.3 percent in November due to cheaper fuel and food items. Local investors also cheered report that India was likely be a larger economy than the US by 2030, while China will top the list and Indonesia will figure among the top five. India is likely to be the main mover, with its trend growth accelerating to 7.8% by 2020s, partly due to ongoing reforms, including introduction of GST and the Insolvency and Bankruptcy Code (IBC). Encouraging earnings by some companies too added some thrust on the street. On the sectoral front, Airline stocks such as Jet Airways and SpiceJet gained after Ministry of Civil Aviation secretary, RN Choubey stating that India will be adding 100 more airports, and one billion trips in the next 15 years. He also said the country is an aviation locomotive for the world and provides humongous opportunities for players across the globe to grow.

On the global front, Asian markets were trading in green, after senior economic officials said Beijing will cut taxes and keep monetary policy flexible to help weather China’s slowdown. Back home, the BSE Sensex is currently trading at 36200.65, up by 347.09 points or 0.97% after trading in a range of 35950.08 and 36265.11. There were 23 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.49%, while Small cap index was up by 0.60%.

The top gaining sectoral indices on the BSE were IT up by 2.62%, TECK up by 2.28%, Energy up by 2.18%, Realty up by 1.75% and Oil & Gas up by 1.27%, while Telecom down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.58%, Infosys up by 3.37%, Reliance Industries up by 2.78%, Vedanta up by 1.84% and TCS up by 1.76%. On the flip side, Bharti Airtel down by 0.57%, Power Grid down by 0.44%, Axis Bank down by 0.35%, ICICI Bank down by 0.27% and Maruti Suzuki down by 0.27% were the top losers.

Meanwhile, in order to align with the best corporate practices, the Finance Ministry has asked the public sector banks (PSBs) to slowly bring down the government's equity to 52 percent in the first phase. The government is essentially a major shareholder, so this need to be aligned to the best corporate practices.  

Dilution of government stake will help banks to meet 25 percent public float norms of market regulator Securities and Exchange Board of India (SEBI). Some of the PSBs have government's holding beyond 75 percent. Besides, it will encourage the banks to follow the prudential lending norms. The country's largest lender State Bank of India (SBI) has already initiated step for Rs 20,000 crore share sale through qualified institutional placement (QIP). Post QIP, the government stake will be diluted from the existing 58.53 percent.

Recently, shareholders of the bank approved sale of shares to fund the business growth. Many other banks are planning to raise capital through some means or other, depending on the market condition. The government has also initiated consolidation of Regional Rural Banks (RRBs) along with the public sector lenders and intends to bring down their number to 36 from the existing 56. 

The CNX Nifty is currently trading at 10844.85, up by 107.25 points or 1.00% after trading in a range of 10777.55 and 10861.50. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Wipro up by 5.46%, Yes Bank up by 3.61%, Infosys up by 3.33%, Tech Mahindra up by 2.97% and Reliance Industries up by 2.73%. On the flip side, Bharti Airtel down by 0.47%, Power Grid down by 0.47%, Maruti Suzuki down by 0.36%, Axis Bank down by 0.33% and ICICI Bank down by 0.27% were the top losers.

All Asian markets were trading in green; Nikkei 225 surged 195.59 points or 0.96% to 20,555.29, Hang Seng increased 483.95 points or 1.84% to 26,782.28, KOSPI rose 32.66 points or 1.58% to 2,097.18, Jakarta Composite soared 22.81 points or 0.36% to 6,358.93, Taiwan Weighted strengthened 97.82 points or 1.01% to 9,806.04, Shanghai Composite gained 32.58 points or 1.28% to 2,568.35 and Straits Times advanced 47.53 points or 1.5% to 3,220.99.