Benchmarks continue to trade jubilantly; Nifty above 11,650 mark

Gaining further strength, Indian equity benchmarks continued to trade jubilantly in afternoon deals, with frontline gauges trading comfortably above their crucial 11,650 (Nifty) and 39,250 (Sensex) levels. The sentiments remained on upbeat mood with Finance Minister Nirmala Sitharaman’s statement that India has become a highly competitive investment destination post corporate tax reduction as the rates are now lower than that in China and most Southeast Asian countries. Markets also drew some solace with Niti Aayog Vice Chairman Rajiv Kumar’s statement that Rs 1.45-lakh crore tax giveaway is unlikely to widen fiscal deficit much as the shortfall will be met through increased tax collections due to higher growth which the massive tax cuts are expected to achieve. Besides, the all-powerful GST Council slashed tax rates on hotel tariffs and some goods with a view to addressing sectoral concerns and spur growth. On the sectoral front, stocks related to steel sector remained in focus after the government said it is working on various fronts to make the Indian steel sector vibrant, efficient, investor-friendly and globally competitive. 

On the global front, Asian counters were trading mostly in red as investors mulled the latest developments in trade negotiations between the US and China. Back home, the BSE Sensex is currently trading at 39282.42, up by 1267.80 points or 3.34% after trading in a range of 38674.04 and 39346.01. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 3.28%, while Small cap index was up by 2.55%.

The top gaining sectoral indices on the BSE were Capital Goods up by 7.11%, FMCG up by 5.72%, Industrials up by 5.35%, Bankex up by 5.31% and Consumer Discretionary Goods & Services was up by 4.11%, while IT down by 3.05%, TECK down by 2.63%, Healthcare down by 0.41% and Telecom was  down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 9.30%, ITC up by 8.31%, Asian Paints up by 8.24%, Indusind Bank up by 8.06% and Bajaj Finance was up by 7.81%. On the flip side, Infosys down by 4.04%, TCS down by 3.15%, Tata Motors down by 2.47%, NTPC down by 1.96% and Tech Mahindra was down by 1.90% were the top losers.

Meanwhile, in order to improve credit supply to small exporters, the Reserve Bank of India (RBI) has raised the loan sanctions limit qualifying as priority sector lending by banks to Rs 40 crore per borrower. The previous limit was set at Rs 25 crore per borrower. The RBI and the government have been taking a slew of measures to spur economic growth, which has dipped to a six-year low.

The central bank has also decided to remove the existing criteria of 'units having turnover of up to Rs 100 crore' as part of the changes. The changes have been done to boost credit to the export sector. Priority sector lending is a mandatory requirement under which lenders are required to devote a portion of their advances to empower focused groups of the economy. All sectors put together, this adds up to 42 percent of the total lending for each bank.

The RBI said existing guidelines for domestic scheduled commercial banks to classify 'incremental export credit over corresponding date of the preceding year, upto 2 percent of adjusted net bank credit or credit equivalent amount of off- balance sheet exposure, whichever is higher' under PSL will continue to be applicable. There is no change in the present instructions in respect of foreign banks.

The CNX Nifty is currently trading at 11654.45, up by 380.25 points or 3.37% after trading in a range of 11471.35 and 11666.35. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 9.46%, Bajaj Finserv up by 8.84%, ITC up by 8.38%, Britannia Industries up by 8.27% and Asian Paints was up by 8.24%. On the flip side, Infosys down by 4.10%, Dr. Reddys Lab down by 3.69%, TCS down by 3.19%, Wipro down by 2.87% and Zee Entertainment was down by 2.55% were the top losers.

Asian counters were trading mostly in red; Straits Times trembled 8.59 points or 0.27% to 3,151.09, Taiwan Weighted dropped 10.67 points or 0.1% to 10,919.02, Jakarta Composite lost 16.03 points or 0.26% to 6,215.44, Shanghai Composite declined 35.50 points or 1.18% to 2,970.95 and Hang Seng was down by 198.14 points or 0.75% to 26,237.53.

On the flip side, KOSPI was up by 0.18 points or 0.01% to 2,091.70.