The stock market extended gains in morning trade after a positive start. At 10:15 IST, the barometer index, the S&P BSE Sensex, was up 296.73 points or 0.87% at 34,379.44. The Nifty 50 index advanced 82.75 points or 0.79% at 10,559.45.
Stocks advanced 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 viz. 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 rising global crude oil and commodity prices.
Among secondary indices, the S&P BSE Mid-Cap index rose 1.02%. The S&P BSE Small-Cap index advanced 1.62%. Both these indices outperformed the Sensex.
The breadth, indicating the overall health of the market, was quite strong. On the BSE, 1,807 shares advanced and 386 shares declined. A total of 87 shares were unchanged.
Pharma stocks advanced. Cipla (up 5.46%), Sun Pharmaceutical Industries (up 2.14%), Dr Reddy's Laboratories (up 2.02%) and Lupin (up 0.01%) gained.
Aurobindo Pharma was down 0.92%. The company's consolidated net profit rose 2.8% to Rs 595.01 crore on 11% growth in net sales to Rs 4268.99 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 7 February 2018.
N. Govindarajan, Managing Director, Aurobindo Pharma, said that all key markets continue to perform well and have shown a healthy growth trend. Considering the one off US tax charge, the profitability is in line with expectations. The company continues to invest in enhancing specialty and complex generics pipeline, for a sustainable growth.
Cement stocks also gained. Shree Cement (up 1.41%), Ambuja Cements (up 1.08%) and UltraTech Cement (up 0.23%) advanced.
ACC fell 0.61%. The company is scheduled to announce Q4 December 2017 results today, 8 February 2018.
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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