Benchmarks trade higher in early deals ahead of IIP, CPI data

Indian equity benchmarks made positive start on Friday tracking overnight gains on Wall Street. Markets are trading higher with marginal gains in early deals, on account of buying in IT, TECK and Realty counters. Investors are eyeing key macroeconomic data -- the industrial production data for December and CPI inflation data for January. Some support came in as the government approved applications from several medical devices manufacturers under the Production Linked Incentive (PLI) scheme for the promotion of domestic manufacturing. Traders took note of Commerce and Industry Minister Piyush Goyal’s statement that the government has constituted a committee comprising members from public and private sectors to look into issues like promoting localisation and boosting manufacturing.

On the global front, Asian markets are lower on Friday in thin holiday trading with investors treading cautiously following the lackluster cues overnight from Wall Street and lower commodity prices. Many of the markets in the region, including China and South Korea, are closed for the Lunar New Year holiday. Back home, aviation stocks were in focus after the civil aviation ministry increased the lower and upper limits on domestic airfares by 10 to 30 percent. In scrip specific development, Cigarette maker ITC tumbled after reporting lower net profit for the quarter ended December.

The BSE Sensex is currently trading at 51641.62, up by 110.10 points or 0.21% after trading in a range of 51492.95 and 51715.04. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.04%, while Small cap index was up by 0.43%.

The gaining sectoral indices on the BSE were IT up by 1.41%, TECK up by 1.14%, Realty up by 0.96%, Basic Materials up by 0.30%, Energy up by 0.25%, while FMCG down by 1.05%, Metal down by 0.95%, Oil & Gas down by 0.49%, Telecom down by 0.46%, Consumer Durables down by 0.35% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.86%, Tech Mahindra up by 1.82%, HCL Technologies up by 0.89%, TCS up by 0.84% and ICICI Bank up by 0.75%. On the flip side, ITC down by 3.36%, ONGC down by 1.56%, Sun Pharma down by 1.02%, Bharti Airtel down by 0.70% and NTPC down by 0.67% were the top losers.

Meanwhile, Moody's Investors Service in its latest report has said that India's economic recovery reduces the risk of a sharp deterioration in public sector banks' (PSBs) asset quality. However, the capital would remain insufficient to support credit growth and absorb unexpected shocks.

The agency has stated that with high credit costs continuing to suppress their profitability, the banks' capital buffers will remain insufficient. It also stated that the government plans to infuse Rs 20,000 crore in equity capital into PSBs next fiscal. It noted that while the amount will help the banks meet Basel capital requirements, it will not boost credit growth.

According to the report, 'various measures by the Indian government to support borrowers have helped curb growth in public sector banks' non-performing loans (NPLs), and the volume of restructured loans is not as large as we anticipated'. However, it said India's public sector banks will continue to face capital shortages as their profitability remains weak given high credit costs, leaving them vulnerable to any unexpected stress.

The CNX Nifty is currently trading at 15198.60, up by 25.30 points or 0.17% after trading in a range of 15157.75 and 15223.30. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.49%, Tech Mahindra up by 1.84%, Infosys up by 1.82%, Grasim Industries up by 0.93% and TCS up by 0.84%. On the flip side, ITC down by 3.36%, Coal India down by 2.01%, ONGC down by 1.56%, GAIL India down by 1.17% and Tata Steel down by 0.89% were the top losers.

Asian markets were trading in red; NIKKEI 225 declined 59.08 points or 0.20% to 29,503.85.