Sensex, Nifty Closes at Record High; L&T Hits 52-Week High

Indian share markets surged to a new record highs and the NSE Nifty crossed the 10,600 level for the first-time today's trade on strong gains in pharma stocks, IT stocks and banking stocks amid optimism over quarterly earnings by corporates. The sentiments also remained upbeat on strong global cues.

At the closing bell, the BSE Sensex closed higher by 199 points and the NSE Nifty finished higher by 65 points. The S&P BSE Mid Cap finished up by 1% while S&P BSE Small Cap finished up by 0.9%.

Asian stock markets closed higher with shares in Japan leading the region following the strong lead from Wall Street in the last session. The Nikkei 225 is up 0.89% while China's Shanghai Composite is up 0.52% and Hong Kong's Hang Seng is up 0.28%. European markets are higher today with shares in Germany leading the region. The DAX is up 0.31% while France's CAC 40 is up 0.29% and London's FTSE 100 is up 0.02%.

Rupee was trading at Rs 63.34 against the US$ in the afternoon session. Oil prices were trading at US$ 61.55 at the time of writing.

L&T share price touched a 52-week high and finished the day up by 1.8% on the BSE after the company's construction arm has won orders worth Rs 22.65 billion from Andhra Pradesh Capital Region Development Authority.

In news from steel sector, as per an article in The Economic Times, Jindal Steel & Power's chairman said that the company will raise Rs 10 billion through qualified institutional placement (QIP) route in February.

JSPL also plans to raise up to Rs 20 billion by listing its Oman business on foreign exchange.

As per the reports, the company has recently finished a round of capital expansion and the overall steel capacity of the group would stand at 11 MT by May 2018. Domestic capacity would reach 9 MT by March end.

Jindal steel share price finished the day up by 7.2% on the BSE.

Moving on to news from banking sector. After a long gap, bank's credit has registered a double-digit growth of 10.65% to Rs 80.96 trillion as on December 22, 2017, mainly because of the base effect.

According to the RBI data, advances had stood at Rs 73.17 trillion in the year-ago period. In the recently released financial stability report, RBI has indicated that credit growth of scheduled commercial banks (SCBs), on a Y-o-Y basis, surged to 6.2% from 4.4% between March and September 2017.

The data further highlighted that the public-sector banks' (PSBs) credit growth increased from 0.7% to 2.2% during the same period reversing the declining trend observed during past two years.

Meanwhile, credit-deposit ratio, a.k.a. CD Ratio has been steadily increasing over the past one year. This ratio shows how much a bank lends out of the deposits it has mobilized. This ratio was below 70% in November 2016, when demonetization resulted in a flood of deposits while lending slowed down.

CD Ratio and Bank Credit Growth Rising Upwards

Deposit growth and bank credit growth impacts the CD ratio. Bank credit growth rate is continuously improving and achieved 9.6% growth in November 2017. Although the base effect may have played a part in making, the current growth numbers look better. Nevertheless, the rise in bank credit growth will be positive for India's banking sector facing lower loan demand and severe capital constraints.

In another development, State Bank of India, plans to raise up to US$2 billion (over Rs 126 billion) by issuing bonds in US dollar or any other convertible currency. The fund-raising will take place through a public offer and/or private placement of senior unsecured notes in US dollar or any other convertible currency during fiscal 2017-18 and 2018-19.

SBI share price finished the day down by 0.2% on the BSE.

In news from the economy, the Central Statistics Office (CSO), under Ministry of Statistics and Program Implementation, in its First Advance Estimates of National Income, 2017-18, has stated that Indian economy is expected to grow at a four-year low of 6.5% in the current fiscal year 2017-18, as against 7.1% in the fiscal year 2016-17.

It is even lower than the Reserve Bank's lowered projection of 6.7%.

Poor performance of agriculture, mining and construction sectors, along with the lingering impact of demonetisaiton and the Goods and Services Tax (GST), mainly pulled down the growth prospects of the Indian economy. Before this, the slowest expansion in GDP was in 2013-14, when it grew by 6.4%.

Among the sectors, 'public administration, defence and other services' is expected to register the sharpest growth of 9.4% this fiscal, followed by trade, hotels, transport, communication and services related to broadcasting, which is expected to expand by 8.7%.

And here's a note from Profit Hunter

IDFC Bank is among the most active stocks in the market today - up 9%.

Taking a look at the chart, we see that in September 2016 the stock topped out at 83. And fell to a low of 55 in December 2016. Since then, the stock has been trading in a broad range of 55 - 65.

The 55 level has been acting as a strong support , while the 66 level has become a strong resistance.

In December 2017, the stock broke below the 55 level to see a fresh 52-week low of 51. It traded there for a while, but couldn't sustain the drop for long.

In the past two session, the stock soared nearly 16% with strong volumes. And now, it is approaching the 66 resistance level.

So will the stock find resistance at 66 level once again or will it surprise us?

Only time will tell...

IDFC Bank Soared 9% for the Day

This article was originally published in English at www.equitymaster.com

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