Markets maintain upward momentum in early noon session

Indian equity markets maintained their upward momentum in the early noon session following positive trend in global markets. Healthy buying was observed in blue-chip stocks like Bharti Airtel, Larsen & Toubro, ICICI Bank and Power Grid Corporation. Besides, broader indices were also trading in green, supporting their larger peers. Sentiments remained bullish with a report that key policymakers from India and African nations will brainstorm on strategies for scaling up bilateral trade volume to $150 billion in the next few years at the India-Africa Project Partnerships Conclave. Meanwhile, in a major overhaul of oil and gas exploration permits, the government will not charge any share of profit on hydrocarbons produced from less explored areas as it looks to attract the elusive private and foreign investment to raise domestic output.

On the global front, Asian shares rose after the European Commission agreed to changes in a Brexit deal ahead of a vote in the British parliament on a divorce agreement. Back on streets, Foreign Institutional Investors (FIIs) has poured in over Rs 3800 crore in Monday’s session taking total inflows to a little over Rs 8,000 crore so far in March which pushed the S&P BSE Sensex to a 6-month higher. In scrip specific development, Jet Airways edged up as Etihad Airways is planning to infuse around Rs 1,600-1,900 crore into Jet Airways under a proposed deal wherein Naresh Goyal would step down as chairman of the company. By this infusion, Etihad's stake in Jet Airways would increase to 24.9%.

The BSE Sensex is currently trading at 37458.04, up by 403.94 points or 1.09% after trading in a range of 37230.85 and 37519.08. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.97%, while Small cap index was up by 1.17%.

The top gaining sectoral indices on the BSE were Realty up by 3.44%, Capital Goods up by 2.52%, Industrials up by 1.85%, Telecom up by 1.68%, Consumer Durables was up by 1.58% , while IT down by 0.03% was the only losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.69%, Larsen & Toubro up by 3.51%, ICICI Bank up by 3.06%, Power Grid Corporation up by 2.26% and Sun Pharma was up by 1.90%. On the flip side, Hero MotoCorp down by 0.57%, Infosys down by 0.46%, NTPC down by 0.39% and Bajaj Auto was down by 0.38% were the top losers.

Meanwhile, Global rating agency Moody’s Investors Service in its latest report has said that new guidelines proposed by the National Housing Bank (NHB) to increase capital adequacy ratio (CAR) to 15 percent in a phased manner is credit positive for housing finance company (HFCs) because they would limit housing HFCs' credit growth and cap their maximum exposure to the debt capital markets. However, it said that the proposed norms will not address issues regarding the key credit risk of HFCs, funding and liquidity.

The report has stated that following the default, liquidity in the debt market tightened sharply, leading to increased risk that the HFCs would be unable to refinance maturing obligations, which was reflected by a sharp increase in their commercial paper yields. Although the HFCs have since September 2018 slowed loan growth to conserve liquidity, the contagion effect of HFCs' liquidity issues can be severe because these companies are a significant borrowers from the banking system.

According to the global rating agency, rated banks' exposure to HFCs was between 3-5 percent of total loans as of December 31, 2018. It noted that the NHB's proposed guidelines will benefit HFCs and lenders to the HFCs, particularly commercial banks, because the guidelines will help limit HFCs' credit growth. It also said that most of the large HFCs already comply with these guidelines, but it expects that some of the smaller HFCs will slow their loan growth or increase capital and lower their leverage over the next few years.

The CNX Nifty is currently trading at 11287.85, up by 119.80 points or 1.07% after trading in a range of 11227.00 and 11305.00. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 3.64%, Bharti Airtel up by 3.27%, ICICI Bank up by 3.10%, Adani Ports &Special up by 3.00% and Hindalco was up by 2.21%. On the flip side, Bharti Infratel down by 1.53%, Hero MotoCorp down by 0.62%, Tech Mahindra down by 0.47%, Infosys down by 0.42% and Bajaj Auto was down by 0.22% were the top losers.

Asian markets were trading mostly in green, Taiwan Weighted strengthened 93.05 points or 0.91% to 10,343.33, Hang Seng increased 326.39 points or 1.15% to 28,829.69, Shanghai Composite gained 54.53 points or 1.8% to 3,081.52, Nikkei 225 surged 395.47 points or 1.87% to 21,520.56, KOSPI rose 19.36 points or 0.91% to 2,157.46 and Straits Times was up by 30.05 points or 0.94% to 3,221.47. on the other hand, Jakarta Composite was down by 3.20 points or 0.05% to 6,363.23.