The stock market traded firm in positive terrain in early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex, was up 447.83 points or 1.31% at 34,530.54. The Nifty 50 index advanced 126.85 points or 1.21% at 10,603.55.
Key indices opened on a higher note and extended gains so far as bargain hunting emerged after seven straight sessions of sell-off in the domestic equities in the wake of a combination of domestic and global factors. Lesser hawkish stance of the Reserve Bank of India (RBI) in its monetary policy meeting concluded yesterday, 7 February 2018 also supported the gains on the bourses. The central bank had kept key policy rates on hold, reiterating its intention to keep an eye on the inflation figures going forward and to support growth.
Earlier, the key indices had declined for seven sessions in a row after the Government announced re-introduction of long term capital gains (LTCG) tax on equities exceeding Rs 1 lakh at 10% in Budget 2018, surging interest rates on sovereign debt in US, and amid rising global crude oil and commodity prices.
Among secondary indices, the S&P BSE Mid-Cap index rose 1.84%. The S&P BSE Small-Cap index advanced 2.42%. Both these indices outperformed the Sensex.
The breadth, indicating the overall health of the market, was quite strong. On the BSE, 2,090 shares advanced and 459 shares declined. A total of 109 shares were unchanged.
Metal and mining stocks were mostly higher. Steel Authority of India (up 3.02%), NMDC (up 2.19%), Hindustan Copper (up 2.03%), Jindal Steel & Power (up 1.66%), JSW Steel (up 1.22%) and Nalco (up 1.2%) gained. Vedanta (down 1.32%), Hindustan Zinc (down 0.76%), Tata Steel (down 0.51%) and Hindalco Industries (down 0.39%) declined.
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IT stocks surged. Infosys (up 3.18%), Tech Mahindra (up 2.8%), HCL Technologies (up 2.22%), TCS (up 2.19%) and Wipro (up 1.61%) gained.
Index heavyweight and housing major HDFC advanced 2.1% at Rs 1,822.45.
FMCG major Hindustan Unilever gained 1.59% at Rs 1,334.40.
On the macro front, the Reserve Bank of India (RBI), in a notification dated 7 February 2018, announced relief measures for micro, small and medium enterprises (MSMEs) registered under Goods and Services Tax (GST). Presently, banks and non-banking finance companies (NBFCs) in India generally classify a loan account as non-performing asset (NPA) based on 90 day and 120 day delinquency norms, respectively. The formalisation of business through registration under GST had adversely impacted the cash flows of the smaller entities during the transition phase with consequent difficulties in meeting their repayment obligations to banks and NBFCs.
As a measure of support to these entities in their transition to a formalised business environment, it has been decided that the exposure of banks and NBFCs to a borrower classified as MSME under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, shall continue to be classified as a standard asset in the books of banks and NBFCs, subject to a set of conditions, the central bank said.
Overseas, Asian stocks were mixed. China's trade surplus shrank in January on huge imports surge, data released today, 8 February 2018 showed. Trade surplus for January, in Yuan terms, came in at CNY 135.80 billion.
US stocks declined yesterday, 7 February 2018, after trading in a wide range again, as interest rates climbed back toward multi-year highs.
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