Indian benchmark indices continued to trade in green in noon session on sustained buying by funds and retail investors amid firm trend in other Asian markets. Sentiments remained upbeat with the report that Indian government is considering allowing the state-run social security and pension fund to invest more in the stock market. Labour Minister Bandaru Dattatreya said the government was examining a proposal to let the Employees' Provident Fund Organisation (EPFO) invest 15% of its corpus via exchange-traded funds compared with 10% at present. The issue would be taken up in the next meeting of the Central Board of Trustees (CBT) of the fund. Some support also came with the report that Inflation likely cooled in January to the lowest in at least five years, after food prices fell and demand weakened following Prime Minister Narendra Modi's ban on high-value currency notes. Consumer price inflation has been below 4% since Modi's Nov 8 decision to abolish 500- and 1,000- rupee notes wiped out 86% of the currency in circulation. However, gains remained capped as Finance Minister Arun Jaitley warned that economies will become more inefficient and GDP will shrink if protectionist trend emerges in developed economies. Meanwhile, some traders remained on the sidelines and refrained from any buying activity ahead of December IIP data due to be announced later in the day.
On the global front, Asian markets were trading higher on Friday, as investors cheered upbeat Chinese trade data and strong gains on Wall Street after US President Donald Trump promised to unveil a major tax announcement to lower the burden on businesses. Higher crude oil prices also boosted investors’ sentiments. Meanwhile, the Japanese market edged higher, with a weaker yen and the record closing highs overnight on Wall Street boosting investor sentiment. Overnight, Wall Street's three main indexes notched record highs. The Dow Jones Industrial Average rose 118.06 points to 20,172.4, while the Nasdaq Composite added 32.73 points to 5,715.18.
Back home, stocks from Consumer Durables, IT and Banking counters were supporting the markets’ uptrend, while those from Oil & Gas, FMCG and Metal counters were adding to the underlying cautious undertone. In scrip specific development, Religare Enterprises declined after the company reported a net loss of Rs 43.28 crore for third quarter ended December 31, 2016 as compared to a net profit of Rs 127.67 crore for the same quarter in the previous year. On the other hand, IMP Powers surged after the company bagged an order from Haryana Vidyut Prasaran Nigam for manufacture and supply of 2100 MVA Power Transformers worth Rs 52 crore.
The market breadth remained optimistic, as there were 1356 shares on the gaining side against 1104 shares on the losing side, while 164 shares remained unchanged.
The BSE Sensex is currently trading at 28363.37, up by 33.67 points or 0.12% after trading in a range of 28319.47 and 28456.18. There were 19 stocks advancing against 11 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index was tad up by 0.04%, while Small cap index up by 0.41%.
The top gaining sectoral indices on the BSE were Consumer Durables up by 0.72%, IT up by 0.64%, Bankex up by 0.64%, TECK up by 0.46% and Capital Goods up by 0.44%, while Oil & Gas down by 0.46%, FMCG down by 0.23%, Metal down by 0.18% and Realty tad down by 0.03% were the top losing indices on BSE.
The top gainers on the Sensex were Adani Ports & SEZ up by 2.20%, SBI up by 1.65%, NTPC up by 1.07%, Axis Bank up by 0.98% and Tata Steel up by 0.79%. On the flip side, Lupin down by 1.24%, ITC down by 0.94%, Cipla down by 0.94%, Dr. Reddys Lab down by 0.67% and ICICI Bank down by 0.56% were the top losers.
Meanwhile, Economic Affairs Secretary Shaktikanta Das has clarified that the government has not taken any decision on levying a Banking Cash Transaction Tax (BCTT) on cash deals of Rs 50,000 and above, as suggested by the high-powered Chief Ministers’ panel recently. He said that government will examine the report very carefully and take appropriate decision.
The Andhra Pradesh Chief Minister Chandrababu Naidu-headed committee on digitisation had in its report last month recommended a cap on cash in all types of big-ticket transactions and a levy on cash deals beyond Rs 50,000 as it sought to discourage the use of physical currency. Apart from taxing cash transactions, the panel had said the government should abolish banks' interest on credit card transactions, give tax refund to consumers on digital payments and extend Rs 1,000 subsidy on smartphones to income-tax non-payees to promote a less-cash digital economy.
Talking on tax rates, Das stated that the government has certain fiscal constraints and reduction in corporate tax rates overnight will be difficult for the government because fiscal cost will be very high and government will not be able to do justice to various other sectors of the economy. Noting corporate tax reduction can be done in phrases he also said that it is dependent on the financial affordability of the government without compromising the spending requirements in various critical sectors like infrastructure.
The CNX Nifty is currently trading at 8796.20, up by 17.80 points or 0.20% after trading in a range of 8781.35 and 8822.10. There were 27 stocks advancing against 24 stocks declining on the index.
The top gainers on Nifty were Grasim Industries up by 3.21%, Bank of Baroda up by 2.72%, Tech Mahindra up by 2.31%, Adani Ports & SEZ up by 2.05% and SBI up by 1.83%. On the flip side, Aurobindo Pharma down by 3.08%, Zee Entertainment down by 1.53%, BPCL down by 1.28%, Cipla down by 1.11% and ITC down by 1.08% were the top losers.
All the Asian markets were trading in green; KOSPI Index gained 0.49%, FTSE Bursa Malaysia KLCI soared 0.7%, Shanghai Composite rose 0.55%, Jakarta Composite advanced 0.39%, Taiwan Weighted surged 0.79%, Hang Seng added 0.64% and Nikkei 225 was up by 2.52%.