Markets make optimistic start on firm global cues

Buoyed by firm global cues, Indian equity benchmarks have made an optimistic start with frontline gauges surpassing their crucial 33,800 (Sensex) and 10,450 (Nifty) levels in early deals on Tuesday. Sentiments remained up-beat with reports that the government is considering a major overhaul of the goods and services tax (GST) as suggested by a ministerial panel. It has been reported that the government may review the requirement of filing at least three returns every month under the GST regime with a view to easing compliance burden of taxpayers. Traders also took some encouragement with Finance Minister Arun Jaitley’s statement that excessive cash in the economy has 'its own cost' and India is gradually moving towards digital transactions. However, markets pared some of their initial gains, as investors shifted focus on corporate earnings and developments related to PSUs.

Global cues remained supportive with most of the Asian peers trading in green at this point of time as US President Donald Trump tried to tackle trade on his Asia tour. The Japanese Nikkei reached its highest level in more than 21 years. The US markets moved modestly higher in the last session making another record high for the major averages.

Back home, engineering sector stocks remained buzzing on report that Indian engineering exports are benefiting from an impressive turnaround in demand in most of the developed economies, including the US and Europe. Cement stocks remained on buyers’ radar, as some of the Cement major increased prices. However, the oil marketing companies (OMCs) edged lower despite the international crude oil prices edging down on Tuesday after posting the biggest gains in six weeks a day earlier.

The BSE Sensex is currently trading at 33840.36, up by 109.17 points or 0.32% after trading in a range of 33773.12 and 33865.95. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.32%, while Small cap index was up by 0.52%.

The top gaining sectoral indices on the BSE were IT up by 1.65%, TECK up by 1.20%, Utilities up by 0.62%, Power up by 0.60% and Capital Goods was up by 0.58%, while Consumer Durables down by 0.82%, Energy down by 0.67%, Telecom down by 0.25%, Metal down by 0.13% and Bankex was down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.59%, ONGC up by 2.42%, Infosys up by 1.77%, Wipro up by 1.25% and Sun Pharma up by 1.01%. On the flip side, Reliance Industries down by 1.04%, Asian Paints down by 0.94%, Coal India down by 0.84%, Bharti Airtel down by 0.80% and Adani Ports down by 0.65% were the top losers.

Meanwhile, credit ratings agency, India Ratings and Research (Ind-Ra) has said that participation from the private sector in the government’s ambitious Bharatmala project may be challenging, because of the stressed balance sheets of many infrastructure developers. For the Bharatmala Pariyojana project, the second biggest highway development programme after the National Highways Development Programme (NHDP), the government expects private participation through a public-private partnership (PPP) of about Rs 1.06 trillion.

As per the rating agency, faster land acquisitions, environment clearances from the Ministry of Environment, Forest and Climate Change and timely funding will be crucial for the completion of Bharatmala project by fiscal 2021-22. It also said that measures such as enhancement of approval limit of projects by the NHAI to Rs 2,000 crore from Rs 1,000 crore, increase in compensation rates to farmers under the new land acquisition policy and digitalisation of land acquisitions would expedite projects under Bharatmala.

Ind-Ra observed that since most of the projects are to be constructed in remote areas, mobilisation of equipment and raw materials would be challenging. It further said that the government announcement of construction of about 83,677 km of roads or nearly 45 km per day, including Bharatmala, over the next five years, would require a vast improvement in pre-bidding completion procedures to bring the project until the bidding stage. The programme will incur a capex of Rs 6.92 trillion; of this Phase-1 of Bharatmala will incur capex of Rs 5.35 trillion.

The rating agency also pointed out some of the major issues of the projects awarded through public-private partnership under NHDP phases, were delay in land acquisitions and obtaining statutory approvals and clearances, aggressive bidding and difficulties in forecasting traffic volumes led to a decline in private sector participation in the road sector.

The CNX Nifty is currently trading at 10450.35, down by 1.45 points or 0.01% after trading in a range of 10450.00 and 10485.75. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.10%, HCL Tech. up by 2.06%, GAIL India up by 1.90%, ONGC up by 1.53% and Infosys up by 1.38%. On the flip side, Yes Bank down by 3.22%, BPCL down by 2.33%, HPCL down by 2.30%, Indian Oil Corporation down by 1.68% and UPL down by 1.37% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 2.9 points or 0.17% to 1,745.19, Jakarta Composite gained 10.92 points or 0.18% to 6,061.74, Shanghai Composite jumped 19.65 points or 0.58% to 3,407.83, Taiwan Weighted increased 47.87 points or 0.44% to 10,834.06, Nikkei 225 surged 272.18 points or 1.21% to 22,820.53 and Hang Seng was up by 346.84 points or 1.21% to 28,943.64. On the flip side, KOSPI Index was down by 7.32 points or 0.29% to 2,542.09.