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Indian equity markets trade on a jubilant note

Jainam Research | 25 Jan, 2017  | Follow Author | Add to my Favourites 
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Post session - Quick Review

Indian equity benchmarks traded on a jubilant note and closed in green for third consecutive day. The equity benchmarks rose to touch near two and half month high led by gains in Banking and Consumer Durables stocks. The benchmarks extended their rally on account of rollover of long position to the next month series on the final trading day of expiry of January Futures & Options contracts. Markets are generally excited about results declared by some finance companies as the numbers have not shown any major impact of demonetization. The markets traded in fine fettle in early deals taking encouragement with report that Donald Trump and Narendra Modi have discussed opportunities to strengthen the partnership between the United States and India in broad areas such as the economy and defense. Some support also came with a private report which said that the Indian government is expected to continue with fiscal consolidation and deliver a popular, but not a populist budget with a fiscal deficit target of 3% in 2017-18. Separately, another report highlighted that the forthcoming Union Budget is likely to stay away from any harsh measures amid heightened economic uncertainty and the country facing considerable challenges from the demonetization induced demand shock. Meanwhile, a high-level committee on digital payments has suggested a tax to discourage cash transactions, a cap on the maximum allowable limit for large-size cash transactions and a complete abolition of charges on card payments to incentivize digital transactions. Indian financial markets will be closed tomorrow on Thursday i.e. on January 26, 2017 on account of Republic Day holiday.

Telecom stocks displayed mixed reactions after Bharti Airtel registered its lowest bottom line figures in four years as demonetization and intense competition with Reliance Jio hit revenues. Consolidated net profit in October-December quarter declined nearly 55 percent to Rs 503.7 crore as against Rs 1,108.1 crore in the same period a year ago. The street expects that time is not easy for these companies, as the kind of onslaught seen from Reliance Jio is going to continue which would put pressure on their margins.

The broader indices ended in green; the BSE Mid cap index was up by 0.89%, while Small cap index was up by 0.84%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 2.31%, Consumer Durables up by 2.17%, Realty up by 1.72%, PSU up by 1.57% an Oil & Gas up by 1.56%, while IT down by 0.21%, TECK down by 0.08% and Power down by 0.07% were the few losing indices on BSE. (Provisional)

Meanwhile, a committee on digital payments formed to promote digitalization and chaired by Chief Minister Chandrababu Naidu in its interim report submitted to Prime Minister Narendra Modi at Niti Ayog has made various suggestions. The panel has recommended eliminating the Merchant Discount Rate charges (MDR) to make digital payments cheaper than cash. Panel has suggested banking cash transaction tax on transaction of Rs 50,000 and above. Further it suggested bringing all government insurance, educational institutes, fertilisers, PDS and petroleum sectors within the ambit of digital payments.

Naidu said that there are lots of cost of handling physical currency because of its printing, movement and security while there is no such cost for digital currency and said that with the increase of volume of digital transitions. The panel made a case for relief in prospective taxes for encouraging merchants to accept digital payments and no retrospective taxation to Merchants doing digital transactions.

The CNX Nifty ended at 8597.50, up by 121.70 points or 1.44% after trading in a range of 8493.95 and 8612.60. There were 40 stocks advancing against 11 stocks declining on the index. (Provisional)

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About Jainam Research

Jainam Research was incorporated in 2003 with the vision to be the most preferred organization providing all financial services across the country. The foundation is on "Value" Systems - "Value" addition to Corporate, Retails and HNI Individuals through superior Wealth Creation Practices.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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