Telecom, realty stocks surge

Key benchmark indices further extended intraday gains in mid-morning trade. At 11:15 IST, the barometer index, the S&P BSE Sensex, was up 451.61 points or 1.33% at 34,534.32. The Nifty 50 index advanced 126.70 points or 1.21% at 10,603.40. 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. 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 retail inflation figures going forward and to support growth.

Earlier, the key indices had declined for seven sessions in a row amid slew of factors like the Government re-introducing long term capital gains (LTCG) tax on equities exceeding Rs 1 lakh at 10% from FY 2019, 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 1.47%. The S&P BSE Small-Cap index advanced 2.18%. Both these indices outperformed the Sensex.

The breadth, indicating the overall health of the market, was quite strong. On the BSE, 2,025 shares advanced and 398 shares declined. A total of 92 shares were unchanged.

Telecom and telecom infrastructure related stocks surged. Idea Cellular (up 3.45%), Bharti Infratel (up 2.29%), Reliance Communications (up 2.39%) and Bharti Airtel (up 0.92%) gained.

Realty stocks also jumped. Indiabulls Real Estate (up 5.23%), D B Realty (up 4.92%), Oberoi Realty (up 4.18%), Godrej Properties (up 3.96%), Prestige Estates Projects (up 3.8%), HDIL (up 2.43%), DLF (up 1.91%), Sobha (up 1.67%) and Unitech (up 0.81%) advanced.

Monte Carlo Fashions gained 2.93% after net profit rose 36.87% to Rs 47.78 crore on 23.66% growth in net sales to Rs 355.92 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 7 February 2018.

FDC jumped 6.3% after net profit surged 93.6% to Rs 42.66 crore on 13% growth in net sales to Rs 248.77 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 7 February 2018.

Separately, the company said that its board of directors approved the buyback of not exceeding 34.3 lakh fully paid up shares at a price of Rs 350 per share for an aggregate amount not exceeding Rs 120.05 crore from the equity shareholders of the company on a proportionate basis through the tender offer route.

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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