Benchmarks trade slightly in green in early deals

Indian equity benchmarks made an optimistic start and are trading marginally in green in early deals with dovish Fed minutes as well as a drop in crude oil prices likely to offer some support after recent heavy losses. Traders took some support with report stating that India’s direct tax collections for the last financial year crossed the Rs 10 lakh crore mark, registering an increase of 18 per cent over the previous fiscal. Some support also came with another report stating that India has moved one notch higher, to the 44th place in terms of competitiveness, in the annual rankings compiled by International Institute for Management Development (IMD) which placed the US in the top slot. The US became the most competitive economy globally driven by its strength in economic performance and infrastructure, followed by Hong Kong and Singapore in the second and third place, respectively.

On the global front, Asian markets exhibiting mixed trend at this point of time as investors fretted about new setbacks in US-China trade talks, however negative sentiments were tempered by US Federal Reserve meeting minutes suggesting it would not raise the tempo at which it increases interest rates. The US markets ended higher on Wednesday, following the release of the minutes of the latest Federal Reserve meeting.

Back home, some optimism came with union minister Ravi Shankar Prasad’s statement that the government is working on a long-term solution to fuel prices. Meanwhile, the government has cleared amendments to the Insolvency and Bankruptcy Code (IBC), incorporating changes suggested by a government-appointed panel. In scrip specific developments, Torrent Pharmaceuticals rose on redeeming CP worth Rs 300 crore and V-Mart Retail surged on opening two new fashion stores.

The BSE Sensex is currently trading at 34413.72, up by 68.81 points or 0.20% after trading in a range of 34399.25 and 34504.97. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.29%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were IT up by 1.61%, TECK up by 1.37%, Telecom up by 0.26%, Healthcare up by 0.19% and FMCG was up by 0.18%, while Oil & Gas down by 1.52%, Auto down by 1.15%, Industrials down by 0.90%, PSU down by 0.76% and Consumer Durables was down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.13%, TCS up by 1.33%, Tata Steel up by 0.96%, HDFC up by 0.90% and Kotak Mahindra Bank up by 0.78%. On the flip side, Tata Motors down by 6.84%, Tata Motors - DVR down by 5.51%, ONGC down by 2.45%, Adani Ports down by 1.20% and Maruti Suzuki down by 1.00% were the top losers.

Meanwhile, in the wake of 10-day relentless rise in petrol and diesel prices, the government has said that it is working on a long-term solution to deal with the volatility and frequent revisions in rates. Law and IT Minister Ravi Shankar Prasad has said that the issue of frequent hike in fuel price is a matter of debate and concern and the government is involved in this whole process, including the concern about rise in prices, and also the uncertainty. He added that with geopolitical situation leading to an uncertainty over the direction of international oil prices a new sense of urgency has developed.

Prasad also said that “The government is keen that instead of having an ad hoc measure, it may be desirable to have a long-term view which addresses not only the volatility but also takes care of the unnecessary ambiguity arising out of frequent ups and downs. That process is underway”.  But, he refused to elaborate either on the measures being considered or if a duty reduction was on cards.

Talking about excise duty, the Minister said proceeds from such taxes are used for country’s development including building of highways, digital infrastructure, electricity to villages, hospitals and education. So, he said that tax on fuel is linked with developmental issues. He further said that the government had allowed complete freedom on pricing and on many occasions prices went down considerably. There are indications that a cut in excise duty combined with states being asked to reduce VAT is on the cards.

The CNX Nifty is currently trading at 10432.05, up by 1.70 points or 0.02% after trading in a range of 10430.95 and 10470.35. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.20%, Infosys up by 2.16%, Tech Mahindra up by 1.66%, TCS up by 1.23% and HDFC up by 0.87%. On the flip side, Tata Motors down by 7.25%, HPCL down by 3.94%, BPCL down by 3.26%, ONGC down by 2.62% and Vedanta down by 2.16% were the top losers.

Asian markets are trading mixed; Hang Seng rose 21.33 points or 0.07% to 30,686.97, Taiwan Weighted increased 38.92 points or 0.36% to 10,925.10, Jakarta Composite surged 120.95 points or 2.09% to 5,912.95 and Straits Times up by 13.25 points or 0.38% to 3,509.52.

On the flip side, Nikkei 225 declined 277.81 points or 1.22% to 22,411.93, FTSE Bursa Malaysia KLCI decreased 20.07 points or 1.11% to 1,784.18, KOSPI Index shed 7.7 points or 0.31% to 2,464.21 and Shanghai Composite down by 1.14 points or 0.04% to 3,167.83.