Markets show signs of recovery; rate sensitives breaks into green

Markets are slowly on course of recovery, though still trading in red with loss of about a quarter percent in late morning session of trade. Lots of pockets are gradually moving up after a gap-down start under influence of the weak trade in other regional peers. Earlier, apart from weak global cues, profit-taking after a major relief rally on Friday had put pressure on the markets, while the weakness in rupee too weighed down the sentiments, as the domestic currency depreciated substantially after logging its biggest daily gain in two years in last session. However, with the progress of trade and stabilization in profit taking, traders were getting some support with Finance Minister Arun Jaitley’s statement that India's economic growth is expected to improve despite unfavourable global winds as the government continues with several reform programmes. He also said that fiscal deficit is coming down and inflation is very much under control and economic growth for this fiscal year will outperform last year's rate. Back on street, the broader markets have shown rapid recovery and have broken into green, while on the sectoral front, rate sensitives like banking, realty and auto that had made a weak start are trading in green, providing maximum support to the markets in recovery.

The BSE Sensex is currently trading at 26114.31, down by 104.60 points or 0.40% after trading in a range of 25972.54 and 26148.39. There were 6 stocks advancing against 22 stocks declining on the index.

The broader indices outperforming the benchmarks were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index gained 0.73%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.32%, Bankex up by 0.27%, Realty up by 0.24%, Auto up by 0.16%, PSU up by 0.16% and INFRA up by 0.08%, while FMCG down by 0.59%, Metal down by 0.58%, IT down by 0.43%, TECK down by 0.38%, Oil & Gas down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.63%, Maruti Suzuki up by 1.14%, Axis Bank up by 0.93%, Larsen & Toubro up by 0.55% and SBI up by 0.29%. On the flip side, HDFC down by 1.44%, Tata Steel down by 1.33%, Mahindra & Mahindra down by 1.30%, Hindalco down by 1.18% and NTPC down by 1.06% were the top losers.

Meanwhile, the US government has expressed that to attract investments from across the world it is important for India to ease its business environment and also to simplify its tax regime. Nisha Desai Biswal, US Assistant Secretary of State for South Asian Affairs said ahead of the maiden bilateral Strategic and Commercial Dialogue (SCD) in Washington on September 22 that for India to achieve its goal of sustainable growth and development, it must assure global markets and international investors that it is open for business. She further stated that efforts to simplify its tax code and increase the ease of doing business will pay huge dividends. Biswal spoke at the launch of a report, 'India's Rise: A Strategy for Trade-Led Growth'compiled by Fred Bergsten, founding director of Peterson Institute of International Economics. 

Biswal said that ease of doing business, IPR, proposed bilateral investment treaty and India's entry into groupings such as Asia-Pacific Economic Cooperation and Trans Pacific Partnership are expected to dominate the maiden SCD. External affairs minister Sushma Swaraj and commerce minister Nirmala Sitharaman will represent India at the SCD. Biswal said that the Modi government can give signs to show its commitment to reforms, such as the strengthening of Intellectual Property Rights (IPR) and added that in order to innovate, attract investment and compete the Indian firms creating those new technologies will need strong IPR protection.

According to Bergsten’s report, India can clinch the growth mark of 8% to 10% growth by liberalizing its trade regime as desired by the Prime Minister Narendra Modi. This will help in creating jobs and assist India in reducing poverty. It further stated that India could increase exports by $500 billion a year by joining the next stage of the Trans-Pacific Partnership trade agreement.

Biswal further said that if India and US can complete a bilateral investment treaty, it would become India's highest-standard investment agreement which would attract much-needed capital for a variety of sectors, including infrastructure, energy, health and education. In a bid to make the tax regime simpler and aid ease of doing business in the country, the government is already striving to get two important bills Goods and Services tax and the Land Acquisition Bill in the parliament.

The CNX Nifty is currently trading at 7957.50, down by 24.40 points or 0.31% after trading in a range of 7908.35 and 7965.15. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were PNB up by 1.30%, Maruti Suzuki up by 1.30%, Tata Motors up by 1.17%, Axis Bank up by 1.11% and Kotak Mahindra Bank up by 1.03%. On the flip side, Tata Steel down by 1.34%, HDFC down by 1.16%, Idea Cellular down by 1.09%, NTPC down by 1.06% and Bharti Airtel down by 1.04% were the top losers.

Most of the Asian markets barring the Chinese Shanghai Composite, which was up by 28.12 points or 0.91% to 3,126.04, were trading in red.

Nikkei 225 slumped by 362.06 points or 1.96% to 18,070.21, Hang Seng lost 251.26 points or 1.15% to 21,669.57, Taiwan Weighted declined by157.09 points or 1.86% to 8,305.05, KOSPI Index was lower by 29.67 points or 1.49% to 1,966.28, FTSE Bursa Malaysia KLCI lost 21.89 points or 1.31% to 1,647.56, Straits Times was down by 14.24 points or 0.49% to 2,865.35 and Jakarta Composite was tad lower by 9.01 points or 0.21% to 4,371.31.