Firm trade persists on Dalal Street

Key barometer gauges continued their firm trade in afternoon session, on the back of mostly positive trade in Asian equities coupled with sustained buying by domestic institutional investors. Domestic sentiments remained firm with the Commerce and Industry Minister Piyush Goyal’s statement that the tax reforms introduced by the government recently will ensure investments come back to India. He also said the government is also looking at pooling together land which state and central governments have got to offer to investors for setting up their businesses in India. Traders also took a note of IMF Chief Economist Gita Gopinath’s statement that the government should focus on structural reforms like clean-up of banks and labor reforms to address the slowdown in domestic demand. Separately, the government will finalise the e-commerce policy once the Personal Data Protection Bill, which lays down the guidelines for data processing, is approved by Parliament.

On the global front, Asian markets were trading mostly in green, as trade deal optimism and Wall Street's streak to all-time highs supported sentiment. Back home, the BSE Sensex is currently trading at 41246.93, up by 308.21 points or 0.75% after trading in a range of 41005.18 and 41263.44. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.31%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Metal up by 3.21%, Basic Materials up by 1.75%, IT up by 1.38%, TECK up by 1.16% and FMCG was up by 0.99%, while Consumer Durables down by 0.57%, Telecom down by 0.33%, Healthcare down by 0.17% and Realty was down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.37%, Vedanta up by 4.35%, Tata Motors - DVR up by 3.99%, Tata Motors up by 3.03% and HDFC was up by 1.83%. On the flip side, Sun Pharma down by 1.25%, NTPC down by 0.52%, ONGC down by 0.40%, Reliance Industries down by 0.34% and Bajaj Auto was down by 0.21% were the top losers.

Meanwhile, rating agency ICRA, in its year-end assessment of the real estate sector, has maintained a negative outlook for the residential real estate segment and a stable outlook for commercial real estate segment. It said the performance of the residential real estate segment continues to be muted owing to the prevailing liquidity crunch, high inventory overhang, weak affordability and subdued demand conditions. It added that sales traction remains slow, particularly in markets with large unsold stock such as Delhi-NCR, Mumbai-MMR and Pune, resulting in continued over-supply.

According to the report, with most of the unsold inventory comprising either units with high ticket sizes or units located in peripheral areas with weak network infrastructure, the challenges associated with liquidation of the stock are expected to continue. On the positive side, it said the sales in the sub-Rs 50 lakh segment have witnessed considerable momentum and given the government incentives for development and offtake of affordable housing units, positive trends in both demand and supply for this segment are expected to continue going forward.

Rating agency further said that with home-buyers increasingly leaning towards reputed developers with an established track record of on-time and quality project completion, larger players have been registering healthy sales and project launch levels despite the overall sluggishness in the industry. Thus, it said the market share of such developers has been increasing and this trend in market consolidation is expected to continue. It added that structural changes, including the implementation of RERA, GST and IBC, as well as the earlier demonetisation drive, have further underpinned this consolidation and have supported confidence levels among home-buyers.

The CNX Nifty is currently trading at 12143.10, up by 89.15 points or 0.74% after trading in a range of 12070.35 and 12144.70. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.39%, Vedanta up by 4.32%, Hindalco up by 3.51%, JSW Steel up by 3.20% and Tata Motors was up by 3.00%. On the flip side, Sun Pharma down by 1.19%, GAIL India down by 1.16%, NTPC down by 0.57%, Bharti Infratel down by 0.46% and UPL was down by 0.45% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 293.93 points or 1.07% to 27,802.02, Taiwan Weighted strengthened 157.24 points or 1.32% to 12,097.01, Nikkei 225 surged 113.77 points or 0.47% to 24,066.12, Shanghai Composite gained 43.43 points or 1.46% to 3,027.82, KOSPI rose 27.53 points or 1.27% to 2,195.68 and Jakarta Composite was up by 4.90 points or 0.08% to 6,216.49.

On the flip side, Straits Times was down by 0.56 points or 0.02% to 3,205.53.