Bourses turn positive in noon deals

Indian equities erased all losses to turn positive in afternoon session, on account of buying in Telecom, FMCG and Consumer Durables stocks. The sentiments turned optimistic with report stating that exports from special economic zones (SEZs) grew by 38% in May to Rs 29,236 crore. The major sectors contributing to the growth include biotech, chemicals, pharmaceuticals, computers, electronics, non-conventional energy, plastic, rubber, trading and services. The market participants also drew some solace with a private report stating that India fared well on its early warning indicators (EWI) index showing no signs of domestic or financial risks during the last three years. On the other hand, economies of China, Hong Kong, Japan, Canada and Australia threw up several warning signals between 2015 and 2017. Besides, the rupee appreciating 24 paise to 67.75 against the dollar in early trade too provided support to the major indices.  However, gains were limited as anxiety remained among the traders with union minister Suresh Prabhu’s statement that India was seeing real challenge at World Trade Organsation and in the global trading system itself.

On the sectoral front, Tourism sector remained in limelight on report that Tourism hotspots Darjeeling and Sikkim in Eastern Himalayan region are waiting for a bright festive season with large chunk of its capacity already booked even four months before the onset of season. The prevailing trend, just opposite to last year, is bringing cheers to the face of all in the tourism industry, one of the main economy builders of the hilly region.  Moreover, shares related to cement sector were trading higher on report that Mid-level companies, which have a localised footprint in India’s highly regional cement industry, have revealed plans to more than double their capacity, and enhance output to about 15-20 MT in the next four or five years through a combination of brownfield and greenfield expansions. The exercise also seeks to help diversify their geographic bases.

On the global front, Asian markets are trading mostly in red, following the weak cues overnight from Wall Street amid worries about the impact of trade disputes on global economic growth. Investors also remained cautious ahead of the meeting between OPEC and non-OPEC producers that will take place in Vienna later today.

The BSE Sensex is currently trading at 35450.62, up by 18.23 points or 0.05% after trading in a range of 35344.49 and 35462.73. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.06%, while Small cap index was down by 0.21%.

The top gaining sectoral indices on the BSE were Telecom up by 0.79%, FMCG up by 0.67%, Consumer Durables up by 0.41%, Healthcare up by 0.21% and TECK up by 0.05%, while Energy down by 0.81%, Realty down by 0.50%, Power down by 0.31%, Basic Materials down by 0.24% and Bankex down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.16%, ITC up by 1.61%, Sun Pharma up by 0.99%, Bharti Airtel up by 0.92% and HDFC up by 0.80%. On the flip side, Reliance Industries down by 1.43%, Wipro down by 1.25%, Indusind Bank down by 1.02%, Coal India down by 0.88% and Adani Ports &SEZ down by 0.71% were the top losers.

Meanwhile, anticipating a 4 percent rise in coal availability to the power sector, the India Ratings and Research (Ind-Ra) in its latest report has said that demand for imported coal will increase to 62 million tonne (MT) in FY19 as compared to 56 MT in FY18 to meet this incremental generation. Therefore, it pointed out that there could be higher usage of imported coal in FY19 than that in FY16-FY18, when imported coal usage dropped.

Considering a 6-7 percent rise in electricity demand in the current fiscal, the report said that coal-based power generation is likely to increase to 996 billion units from 951 billion units. It stated that short-term power prices would continue to be determined by lower-than-required growth in domestic coal output. It added that this could lead to increased reliance on imported coal. Also, short-term power prices would remain range-bound at Rs 3.75-4.25 per unit in FY19 as against Rs 3.25 per unit FY18.

Besides, it noted that given the expectation of healthy power demand growth in FY19 and thermal-based capacity remaining the mainstay of power generation in India, domestic coal availability becomes a key determinant in deciding short-term power prices. It added that if domestic coal production grows at a lower rate than the demand growth rate, the reliance on imported coal could go up.

The ratings agency further said that in such a situation, short-term power prices would be determined by the marginal cost of energy production undertaken using imported coal. It stated that to ensure higher domestic coal availability to power producers, the government has increased the share of coal allocation to the power sector by diverting a part from other sectors.  It noted that this has led to higher coal availability for the power sector.

The CNX Nifty is currently trading at 10746.50, up by 5.40 points or 0.05% after trading in a range of 10710.45 and 10751.50. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.20%, Bharti Infratel up by 1.84%, ITC up by 1.65%, BPCL up by 1.45% and Titan Co up by 1.31%. On the flip side, Grasim Industries down by 1.47%, UPL down by 1.47%, Indusind Bank down by 1.33%, Reliance Industries down by 1.25% and Eicher Motors down by 1.22% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 176.21 points or 0.78% to 22,516.83, Straits Times shed 12.11 points or 0.37% to 3,287.89, Taiwan Weighted fell 41.79 points or 0.38% to 10,899.28 and Jakarta Composite was down by 25.95 points or 0.45% to 5,796.38.

On the flip side, Hang Seng was up by 57.58 points or 0.20% to 29,353.63, KOSPI gained 19.39 points or 0.82% to 2,357.22 and Shanghai Composite was up by 6.42 points or 0.22% to 2,882.23.