Barometers hold positive momentum on streets

Local equity benchmarks continue to hold a positive momentum on the streets, amid rupee's rise against the US dollar and a dip in global crude oil prices. BSE barometer Sensex eked out around 300 points gains, while the broader Nifty was trading over a percent higher after intense buying thronged the markets. Auto, Metal and Industrials have also elevated with gains on their respective front line stocks. Market participants remained optimistic with International Monetary Fund’s (IMF) report that it has trimmed its 2018 global economic growth forecast by 20 basis points from its July prediction, but retained its India growth projection at 7.3% for the current fiscal, as a trade war between the US and others has started to hit economic activity. Traders took note of a report that in order to meet the festival season demand for funds, the Reserve Bank of India (RBI) will inject Rs 12,000 crore liquidity into the system through purchase of government bonds on October 11. The government will purchase bonds with maturity ranging between 2020 to 2030. Besides, a private report stated that as a worsening current account deficit stokes fresh concerns, the government is considering strengthening priority-sector lending for exports to enable greater flow of credit to the sector.

On the global front, Asian markets were trading mixed, after world stocks hit eight-week lows the previous day on worries about global economic growth, although the pound stayed firm on hopes for a Brexit deal. Back home, in scrip specific development, Maruti Suzuki strengthened on selling over 24,000 units of Ciaz during H1FY19. Besides, Glenmark Pharmaceuticals moves up on executing agreement to transfer its API business. 

The BSE Sensex is currently trading at 34594.79, up by 295.32 points or 0.86% after trading in a range of 34346.50 and 34664.34. There were 25 stocks advancing against 5 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index gained 2.55%, while Small cap index was up by 2.25%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 3.23%, Auto up by 2.21%, Consumer Disc up by 2.21%, Metal up by 2.15% and Industrials was up by 2.09%, while IT down by 0.39% and TECK was down by 0.19% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 4.45%, Vedanta up by 3.89%, Maruti Suzuki up by 3.53%, Bajaj Auto up by 2.73% and Hero MotoCorp was up by 2.54%. On the flip side, Hindustan Unilever down by 1.41%, Infosys down by 1.28%, Wipro down by 0.37%, Bharti Airtel down by 0.05% and TCS was down by 0.03% were the top losers.

Meanwhile, in order to meet the festival season demand for funds, the Reserve Bank of India (RBI) will inject Rs 12,000 crore liquidity into the system through purchase of government bonds on October 11. The government will purchase bonds with maturity ranging between 2020 to 2030. The auction to purchase government bonds is a part of the Open Market Operations (OMO) to manage liquidity in the system which seems to be facing liquidity tightness.

The RBI has decided to conduct purchase of the government securities under OMO for an aggregate amount of Rs 120 billion on October 11, 2018 through multi-security auction using the multiple price method, based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward. It added that the result of the auction will be announced on the same day and payment to successful participants will be made during banking hours on October 12.

As part of the OMOs, the RBI will purchase government securities maturing in 2020 bearing interest rate of 8.27%, 2022 (8.15%), 2024 (7.35%), 2026 (8.15%) and 2030 (7.61%). The RBI said it has the right to decide on the quantum of purchase of individual securities and can also accept offers for less than Rs 12,000 crore. It may as well purchase marginally higher than the aggregate amount due to rounding-off effect and it can also accept or reject any or all the offers either wholly or partially without assigning any reason. OMOs are the tools which can be used to either inject or drain liquidity from the system.

The CNX Nifty is currently trading at 10414.80, up by 113.75 points or 1.10% after trading in a range of 10318.25 and 10419.70. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 7.61%, Bajaj Finserv up by 5.14%, Titan Company up by 4.96%, Vedanta up by 3.72% and Maruti Suzuki was up by 3.50%. On the flip side, HCL Technologies down by 1.33%, Infosys down by 1.25%, Hindustan Unilever down by 1.04%, Wipro down by 0.98% and Ultratech Cement was down by 0.75% were the top losers.

Asian markets were trading mixed, Nikkei 225 gained 24.48 points or 0.1% to 23,493.87, Jakarta Composite rose 7.80 points or 0.13% to 5,804.59 and Hang Seng was up by 122.59 points or 0.47% to 26,295.50.

On the other side, KOSPI slipped 25.68 points or 1.15% to 2,228.15, Straits Times fell 24.06 points or 0.77% to 3,142.54 and Shanghai Composite was down by 4.89 points or 0.18% to 2,716.12.