Benchmarks trade in fine fettle in early deals

Indian equity benchmarks made a gap-up opening and are trading in fine fettle in early deals on Wednesday, with frontline gauges recapturing their crucial 37,400 (Sensex) and 11,300 (Nifty) bastions. Sentiments remained up-beat with report that the finance ministry on September 18 asked ministries to shortlist commodities and goods for import curbs by increasing customs duty, to ease the pressure on the rupee and keep the widening Current Account Deficit (CAD) on check. Besides, Finance Minister Arun Jaitley made a case for blending subsidy with investment to augment farm sector growth and make it sustainable and self-sufficient. Traders shrugged off India Ratings’ report that though the Centre may manage to achieve the debt-to-GDP ratio target of 40% by FY23, the states achieving the 20% target looks difficult as most of them have not budgeted so far.

Global cues too remained supportive with most of the Asian counters trading in green at this point of time as investors looked past the latest escalation in the US-China trade conflict, seen by some market participants as less severe than expected. The US markets ended higher on Tuesday, as investors shrugged off concerns about the escalating trade war between the US-China and shifted focus on the robust economy.

Back home, stocks related to sugar sector remained in sweet spot with report that the government is now expected to come out with a bailout package for sugar sector, after announcing a higher price for ethanol manufacturers. In scrip specific developments, Dabur India moved up on its arm infusing $4,00,000 in Dabur South Africa and Tata Steel surged on completing acquisition of 51% equity stake in CPDPL.

The BSE Sensex is currently trading at 37,400.13, up by 109.46 points or 0.29% after trading in a range of 37295.57 and 37530.63. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.37%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were Metal up by 1.68%, Oil & Gas up by 0.93%, PSU up by 0.79%, Healthcare up by 0.76% and Basic Materials was up by 0.59%, while Consumer Durables down by 0.88% was the lone losing index on BSE.

The top gainers on the Sensex were ONGC up by 2.42%, Coal India up by 2.30%, Tata Steel up by 1.84%, Axis Bank up by 1.75% and Bajaj Auto up by 1.45%. On the flip side, Maruti Suzuki down by 0.72%, HDFC down by 0.59%, HDFC Bank down by 0.51%, Wipro down by 0.45% and NTPC down by 0.24% were the top losers.

Meanwhile, in order to boost farm sector growth and make it sustainable and self-sufficient, Finance Minister Arun Jaitley made a case for blending subsidy with investment. He said formalisation of the economy has started showing visible result in terms of higher resource mobilisation, leaving more in the hands of the government for the capital formation in various sector. He added that as India moves into the situation where governments have more resources, the ability to spend on sectors, which needs maximum support, will obviously rise.

Finance Minister noted important areas which require investment include physical infrastructure, social sector and farm sector. He said as resources grow, the capital and development expenditure will increase. Hopefully, the resource crunch to spend in these areas will not be there. As a result, in order to make investments in agriculture in terms of subsidy support, price support, crop insurance support or the interest subvention support, the government year after year has taken conditional steps.

Jaitley said he do see a point on blending the subsidy support with the investment because, to have a model which sustains indefinitely only on subsidy will not be a sustainable model. Investments will make farm sector self-sufficient on ground. With much lesser subsidies a self-sufficient farmer may be able to serve the cause of Indian agriculture much better.

On the growth, he said India has grown at reasonable pace in the last quarter century. He said ‘We have now acquired position when we are growing much faster than the rest of the world and hopefully there are various avenues of further generating this growth. There are regions in the country that have not grown well in the past therefore there is lot of potential for growth.’ Observing that public discourse occasionally gets impacted by populism, he said, good politics has to be blended with sound and rational policy.

The CNX Nifty is currently trading at 11,310.55, up by 31.65 points or 0.28% after trading in a range of 11280.25 and 11329.45. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.27%, ONGC up by 2.21%, Dr. Reddys Lab up by 1.82%, Hindalco up by 1.77% and GAIL India up by 1.68%. On the flip side, Titan Co down by 1.76%, Zee Entertainment down by 1.63%, Bajaj Finserv down by 0.95%, UPL down by 0.92% and Maruti Suzuki down by 0.73% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 314.22 points or 1.32% to 23,734.76, Taiwan Weighted increased 97.31 points or 0.9% to 10,857.52, Straits Times gained 18.65 points or 0.59% to 3,157.99, Jakarta Composite jumped 58.41 points or 1% to 5,870.20, Hang Seng soared 263.48 points or 0.96% to 27,348.14 and Shanghai Composite was up by 26.32 points or 0.97% to 2,726.27. On the flip side, KOSPI was down by 3.06 points or 0.13% to 2,305.92.