Mumbai, Dec 22: It was a great day for the equity market on Friday as the Nifty crossed another milestone of 10,500 intraday, tracking positive Asian cues and backed by oil, technology and banking & financials stocks.
Not only equity benchmarks but also broader markets participated in the rally, and both ended at fresh record closing highs ahead of Christmas break.
The 30-share BSE Sensex rose 184.02 points to 33,940.30 while the 50-share NSE Nifty ended tad below the 10,500 level, gaining 52.70 points at 10,493.
The market is expected to continue with positive momentum but as the F&O expiry taking place in the coming week, there could be some consolidation, experts suggest.
“The momentum will continue but the Nifty to cross decisively above 10,700-10,800 requires strong support from corporate earnings and GDP growth,” Dilip Bhat, joint MD at Prabhudas Lilladher said.
Ajay Srivastava of Dimensions Corporate Financial Services feels the next 12-18 months will be very important for the market as the government will announce various policies carefully and positively.
One should not worry about returns and invest confidently as there would be positive mood at government, he advised.
The Nifty Midcap index gained 0.3 percent and BSE Smallcap index was up 0.6 percent on positive market breadth. About three shares advanced for every two shares falling on the NSE.
Meanwhile, The gross non-performing assets (GNPAs) in banking sector may rise from 10.2 percent of gross advances in September 2017 to 10.8 percent in March 2018, according to Reserve Bank of India.
“Stress test suggests that in the baseline scenario, GNPAs of the banking sector may rise from 10.2 percent of gross advances in September 2017 to 10.8 percent in March 2018 and further to 11.1 percent by September 2018, “ RBI said in the financial stability report.
The report highlighted that the overall risks to the banking sector “remained elevated due to asset quality concerns”.
The report further said,”Credit growth of scheduled commercial banks (SCBs) showed an improvement between March and September 2017, while public sector banks (PSBs) continued to lag behind their private sector peers.” India’s financial system remains stable, it added.
It pointed out that the overall capital to risk-weighted assets ratio (CRAR) improved from 13.6 percent to 13.9 percent between March 2017 and September 2017. This showed the share of large borrowers both in total SCBs’ loans as well as GNPAs declined between March and September 2017.
Credit growth of SCBs, on a YoY basis, increased from 4.4 percent to 6.2 percent between March and September 2017.
The public sector banks’ (PSBs) credit growth increased from 0.7 percent to 2.2 percent during the same period reversing the declining trend observed during past two years.
GNPAs of the non-banking finance banks (NBFCs) sector as a percentage of total advances increased between March 2017 and September 2017.
However, scheduled commercial banks continued to dominate 47 percent of the bilateral exposure.
The overall investment climate remains challenging though the situation has shown improvement since 2017-18 Q1. It added that the decline in stalled projects, quality of government expenditure, Moody’s India rating upgrade and bank recapitalisation are expected to provide a significant fillip to investment sentiments in the coming quarters.