Indian equities benchmarks traded with marginal gains in late afternoon session as positive global cues buoyed investors' sentiments. Traders remained optimistic 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 that 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 credit rating agency, India Ratings’ report that despite the cash shortage hurting some sectors significantly in the third quarter, the impact of demonetisation on the credit profile of large corporates (revenue over Rs 250 crore) remained neutral, with no significant changes in their ratings expected due to the notes ban move. It pointed that large corporates have sufficient liquidity buffers to meet debt servicing obligations. However, caution prevailed ahead of the release of a key macro-economic data point -- the Index of Industrial Production (IIP).
On global front, European markets were trading in green as investors tracked earnings and looked ahead to the meeting between President Donald Trump and Japanese Prime Minister Shinzo Abe. Asian markets were trading in green after U.S. President Donald Trump promised that he would soon cut taxes for businesses. Japan led gains in the region, as a sharp drop in the yen steered the Nikkei. Back home, buying in IT, Teck, Capital goods and Banking sectors supported sentiments. In scrip specific development, Tata Steel was trading in green after its subsidiary -Tata Steel UK signed a definitive sale agreement to sell its Specialty Steels business to Liberty House Group for a total consideration of 100 million pounds.
The BSE Sensex is currently trading at 28346.35, up by 16.65 points or 0.06% after trading in a range of 28287.95 and 28456.18. There were 19 stocks advancing against 11 stocks declining on the index.
The broader indices were trading mixed; the BSE Mid cap index was down by 0.22%, while Small cap index was up by 0.20%.
The top gaining sectoral indices on the BSE were IT up by 1.29%, TECK up by 0.93%, Capital Goods up by 0.46%, Bankex up by 0.35% and Consumer Durables up by 0.29%, while Oil & Gas down by 0.46%, FMCG down by 0.44%, Metal down by 0.13% and Auto down by 0.07% were the top losing indices on BSE.
The top gainers on the Sensex were Adani Ports & Special economic zone up by 2.17%, Infosys up by 1.74%, Tata Steel up by 1.73%, TCS up by 1.47% and SBI up by 1.43%. On the flip side, Lupin down by 1.48%, Cipla down by 1.39%, Dr. Reddy’s Lab down by 1.27%, ITC down by 1.24% and GAIL India down by 1.15% were the top losers.
Meanwhile, credit rating agency, India Ratings in its latest report has said that despite the cash shortage hurting some sectors significantly in the third quarter, the impact of demonetisation on the credit profile of large corporates (revenue over Rs 250 crore) remained neutral, with no significant changes in their ratings expected due to the notes ban move. It pointed that large corporates have sufficient liquidity buffers to meet debt servicing obligations.
The report noted that the impact has been varied, depending on the extent and nature of cash usage within an industry. Further, it said that the immediate impact of note-ban on revenues of large firms in third quarter of 2016-17 ranges from nil for the export-oriented sectors like Information Technology (IT)/Information Technology enabled services (ITeS), to a significant impact on auto, real estate, gems and jewellery, with a gradual recovery expected as cash availability improves in the fourth quarter (January-March).
The report stated that during demonetisation a significant fall was witnessed in sales of a couple of sectors where the nature of cash usage is often considered dubious like real estate, gems and jewellery. However, it said that organised players and large corporates in such sectors will benefit in the long-run. It added that the sectors which are ancillary to the impacted sectors like auto components, cement, steel or other metals will also see the ripple effects of demonetization.
The CNX Nifty is currently trading at 8789.25, up by 10.85 points or 0.12% after trading in a range of 8771.20 and 8822.10. There were 28 stocks advancing against 23 stocks declining on the index.
The top gainers on Nifty were Grasim Industries up by 3.22%, Bank of Baroda up by 2.74%, Tech Mahindra up by 2.47% and Adani Ports & Special Economic Zone up by 2.10% and Infosys up by 1.98%. On the flip side, Aurobindo Pharma down by 3.59%, Zee Entertainment down by 1.98%, Cipla down by 1.66%, ITC down by 1.46% and Dr. Reddy’s Lab down by 1.45% were the top losers.
All Asian markets were trading in green; KOSPI Index increased 9.2 points or 0.45% to 2,075.08, FTSE Bursa Malaysia KLCI increased 12.34 points or 0.73% to 1,700.84, Shanghai Composite increased 13.52 points or 0.42% to 3,196.70, Jakarta Composite increased 24.31 points or 0.45% to 5,396.39, Hang Seng increased 49.84 points or 0.21% to 23,574.98, Taiwan Weighted increased 75.41 points or 0.79% to 9,665.59 and Nikkei 225 increased 471.26 points or 2.49% to 19,378.93.
All European markets were trading in green; France’s CAC increased 16.07 points or 0.33% to 4,842.31, UK’s FTSE 100 increased 43.33 points or 0.6% to 7,272.83 and Germany’s DAX increased 57.57 points or 0.49% to 11,700.43.