Benchmarks trade firm; PSU bank soars

Indian equity benchmarks continued their firm trade in morning session on account of buying in frontline counters after the Union Cabinet on Tuesday announced various measures to boost economy. The rupee opened lower against dollar on fresh bouts of demand for the American currency from corporates and banks. Traders took support with government unveiling a Rs 2.11-lakh crore support for public sector banks (PSBs), struggling with mounting bad loans, to spur genuine infrastructure lending for upcoming mega projects. The move is aimed at creating jobs and boosting economic growth, which slumped to a three-year low of 5.7% in the first quarter of the current financial year. Separately, the government also approved the biggest highway construction plan so far in the country, to develop approximately 83,677 km of roads at an investment of Rs 6.92 lakh crore by 2022. The highway construction programme is aimed at pushing economic activity and generating at least 14.2 crore man-days across the country over the next five years.

Some support also came on report that the government has collected Rs 92,150 crore as Goods and Services Tax (GST) in September from 42.91 lakh business. The finance ministry said that of this, Rs 14,042 crore is on account of central GST, while state GST is to the tune of Rs 21,172 crore. Integrated GST collections stood at Rs 48,948 crore, of which Rs 23,951 crore was on account of imports. Meanwhile, Finance Minister Arun Jaitley has said that Indian economy is on a strong wicket with sound macro-economic fundamentals. He added that India has been the fastest growing major economy for the last three years and the attempt is to maintain high growth rate in coming years. Economic Affairs Secretary Subhash Garg said that GST has been the biggest tax reform, along with other ones like demonetization and the battle against black money. The secretary added that the current economic slowdown is bottoming out. Fiscal deficit is under control and that the government is unlikely to overshoot its target of 3.2 percent fiscal deficit at the end of the current fiscal year.

Traders were seen piling up position in PSU, Capital Goods and Bankex stock, while selling was witnessed in Consumer Durables, Telecom and Realty sector stocks. In scrip specific development, shares of companies in the road sector were buzzing after the government approved to build 83,677 km of highways over the next five years at a cost of about Rs 6.92 lakh crore which includes the ambitious Bharatmala project. PSU banking stocks surged after the Centre announced a Rs 2.11-lakh-crore capital infusion plan for state-owned banks. General Insurance Corporation of India share listed below the issue price on the National Stock Exchange. The Rs 11,370-crore initial public offer (IPO) of General Insurance Corporation, which was opened during October 11-13, was oversubscribed 1.38 times.

On the global front, Asian markets were trading mostly in green. Japan’s government may be able to declare that the economy has made a sustained exit from deflation before it implements a scheduled sales tax hike in October 2019. Such an announcement would help Prime Minister Shinzo Abe, who drove his ruling Liberal Democratic Party to victory, make the case that his Abenomics stimulus policies are working. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,800 and 10,200 levels respectively. The market breadth on BSE was negative in the ratio of 1081:1108, while 95 scrips remained unchanged.

The BSE Sensex is currently trading at 32854.98, up by 247.64 points or 0.76% after trading in a range of 32804.60 and 33117.33. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.22%, while Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were PSU up by 5.37%, Capital Goods up by 3.32%, Bankex up by 2.98%, Industrials up by 1.59% and Power up by 1.12%, while Consumer Durables down by 0.98%, Telecom down by 0.43%, Realty down by 0.43%, Metal down by 0.35% and Consumer Disc down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 18.35%, ICICI Bank up by 8.82%, Larsen & Toubro up by 5.49%, Axis Bank up by 2.42% and Infosys up by 1.13%.
On the flip side, HDFC Bank down by 3.01%, HDFC down by 2.88%, Kotak Mahindra Bank down by 2.87%, Bharti Airtel down by 0.97% and Lupin down by 0.88% were the top losers.

Meanwhile, Economic Affairs Secretary Subhash Garg said that the reforms initiated by the government like demonetisation and Goods and Services Tax (GST) have been biggest growth contributors. He also indicated that the economic slowdown that the Indian economy is going through has bottomed out and the country's GDP is poised to grow from here on. Talking about the recently flashed inflation numbers, he said that it has consistently come down since 2014 and will not cross 4 percent in the financial year 2018.

On fiscal deficit, Garg further said that the government is committed to sticking to the target of 3.2 percent of GDP for this fiscal but a review would be done in December. Adding further, he noted that the government has already spent Rs 11.47 lakh crore on capital expenditure, more than half its target for the fiscal year. He also stated that the increased government spending has been targeted in a manner, which will bring in more investment and spur growth. 

Pointing at effective and targeted spending, Economic Affairs Secretary said that quality infrastructure is a main priority of the government. He also said that government will spend Rs 7 lakh crore in road infrastructure over the next five years and also mentioned that construction of new roads under the BharatMala programme will take place along with entail construction of 34,800 km of roads.

The CNX Nifty is currently trading at 10250.75, up by 43.05 points or 0.42% after trading in a range of 10240.90 and 10340.55. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were SBI up by 18.10%, ICICI Bank up by 8.44%, Larsen & Toubro up by 4.98%, Ultratech Cement up by 4.14% and Axis Bank up by 2.42%.
On the flip side, Indiabulls Housing down by 3.62%, Indusind Bank down by 3.35%, HDFC Bank down by 3.15%, Yes Bank down by 3.02% and HDFC down by 2.83% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 1.76 points or 0.07% to 2,492.25, Shanghai Composite increased 4.29 points or 0.13% to 3,392.53, Taiwan Weighted increased 5.25 points or 0.05% to 10,749.03, Jakarta Composite increased 31.2 points or 0.52% to 5,983.28 and Hang Seng increased 141.63 points or 0.5% to 28,296.60.

On the other hand, Nikkei 225 decreased 47.87 points or 0.22% to 21,757.30 and FTSE Bursa Malaysia KLCI decreased 0.86 points or 0.05% to 1,735.28.