Benchmarks trade jubilantly in early deals

Indian equity benchmarks made a gap-up opening and are trading jubilantly in early deals on Friday tacking firm global cues. Sentiments remained upbeat with Prime Minister Narendra Modi’s statement that the size of Indian economy would double to $5 trillion by 2022, with manufacturing and agriculture contributing $1 trillion each. Some support also came with report that India is hopeful of resolving the issue of tariffs on steel and aluminium with the US soon and both sides are engaged in finalising a trade package. Traders are also getting some support with report that the Reserve Bank eased norms for companies in the manufacturing sector to raise overseas funds and allowed Indian banks to market Masala Bonds in line with the government’s measures to prop up the rupee.

Global cues too remained supportive with Asian markets rallying at this point of time as investors viewed Beijing’s and Washington’s fresh exchange of import tariffs as less harmful than initially feared. The US markets jumped higher on Thursday as traders took some support with a report from the Labor Department showing initial jobless claims unexpectedly dipped to their lowest level in nearly fifty years in the week ended September 15.

Back home, banking sector stocks continued to take support with rating agency Moody’s statement that the proposed merger of Bank of Baroda, Vijaya Bank and Dena Bank is credit positive because the merger would provide scale efficiencies and help improve the quality of corporate governance. Infrastructure sector related stock too edged higher as India Ratings and Research (Ind-Ra) maintained a stable outlook across the infrastructure sector with the exception of coal-based thermal power, which continues with its negative outlook for the remaining part of FY19.

The BSE Sensex is currently trading at 37453.49, up by 332.27 points or 0.90% after trading in a range of 37202.94 and 37489.24. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.67%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Metal up by 2.12%, Oil & Gas up by 1.61%, Energy up by 1.51%, PSU up by 1.35% and Basic Materials was up by 1.30%, while IT down by 0.34% and TECK was down by 0.28% were the only losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.59%, Tata Steel up by 3.46%, ICICI Bank up by 3.02%, Asian Paints up by 2.35% and Mahindra & Mahindra up by 2.00%. On the flip side, Yes Bank down by 18.21%, Infosys down by 0.51%, TCS down by 0.25% and Hindustan Unilever down by 0.11% were the top losers.

Meanwhile, amid proposed hike in import duty on steel, engineering exporters’ apex body, Engineering Export Promotion Council (EEPC) of India stated that raising the import duty on steel or steel products will widen the current account deficit (CAD) and severely hit engineering exports from the country. It added that steel is a mother of the raw materials for a host of sectors, especially the engineering manufacturing. EEPC India also said its domestic prices have sky-rocketed in the past few years, thanks largely to the protection given to the steel makers by a slew of government measures which have proved detrimental to the interest of exports.

Pointing out how steel prices have shot up in the past two years, the apex body said price of boiler quality steel plates was Rs 39.95 ex stock yard in July, 2016. This has gone up to Rs 51 in July 2018, an increase of 21 percent, having a direct impact on cost of engineering exports. Besides, the delivery period has increased to 4 to 6 months from just a few weeks earlier.

Engineering exporters’ apex body said by no stretch of imagination, steel can be considered as non-essential or non-necessary imports. The entire focus on the Make in India programme is to scale up value addition in manufacturing within the country - by enabling low cost raw material, so that more and more value added products can be made for exports and for domestic consumption. It noted the need to focus on increasing exports for bridging the CAD gap, rather than curtailing essential imports like steel, observing that all-out efforts must be made in this regard and any more increase in duty on steel imports would lead to a huge weakening of India’s export competitiveness.

The CNX Nifty is currently trading at 11339.30, up by 104.95 points or 0.93% after trading in a range of 11263.60 and 11346.80. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 3.43%, Tata Steel up by 3.40%, ICICI Bank up by 3.08%, Hindalco up by 2.74% and GAIL India up by 2.52%. On the flip side, Yes Bank down by 17.67%, Tech Mahindra down by 0.88%, Infosys down by 0.45%, TCS down by 0.39% and Bharti Airtel down by 0.31% were the top losers.

All the Asian markets are trading in green; Nikkei 225 gained 206.05 points or 0.86% to 23,880.98, Taiwan Weighted increased 94.82 points or 0.87% to 10,926.23, Straits Times surged 31.25 points or 0.97% to 3,211.68, Jakarta Composite rose 4.05 points or 0.07% to 5,935.32, Hang Seng jumped 255.86 points or 0.92% to 27,733.53, KOSPI added 8.64 points or 0.37% to 2,332.09 and Shanghai Composite was up by 26.77 points or 0.97% to 2,756.01.