Frontline equities add more gains on the D-Street

Frontline equity indices enticing some more traction and have added some more gains on the streets, with the Sensex and Nifty gaining more than 650 and 190 points, respectively, as the global stock slump showed signs of easing. Buoyant Mid-caps and Small-caps were also approaching over two percent gains. Realty, Auto and Metal counters were on the priority list of the buyers. The rupee surged against the dollar, following gains in local markets and Asian currencies, and ahead key inflation data due later in the day. Traders remained optimistic with a report that the rupee will appreciate from the current level due to sliding crude prices on the back of the downward revision of global growth forecast by the International Monetary Fund (IMF). Traders took note of a private report that Prime Minister’s Office (PMO) will soon hold a meeting on trimming merchandise imports from overseas, as the government prepares for a second round of curbs, including higher tariffs, on ‘non-essential imports’ to cut the current account deficit (CAD) and contain its negative impact on the rupee. The traders overlooked research agency India Ratings report that frequent bid cancellations, the falling Indian rupee and lack of clarity on safeguard duty implications are making bidders cautious about competitive tariffs in renewable energy projects.

On the global front, Asian markets were trading mostly in green, with some of the markets paring early losses, as US stock futures rebounded in Asian trades after media reports indicated that the US Treasury Department has not labelled China as a currency manipulator in an internal report. Back on domestic turf, in scrip specific development, GM Breweries surged on reporting 23% rise in Q2 net profit. Mahindra & Mahindra gained on inking strategic partnership with Castrol India.

The BSE Sensex is currently trading at 34673.66, up by 672.51 points or 1.98% after trading in a range of 34279.78 and 34702.01. There were 28 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 2.31%, while Small cap index was up by 2.34%.

The top gaining sectoral indices on the BSE were Realty up by 3.42%, Auto up by 3.39%, Metal up by 2.95%, Consumer Disc up by 2.76% and Energy was up by 2.67%, while IT down by 1.21% and TECK was down by 0.86% were the only losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.42%, Yes Bank up by 4.40%, ITC up by 4.20%, Maruti Suzuki up by 4.17% and Bajaj Auto up by 3.83%. On the flip side, TCS down by 3.09%, Infosys down by 0.56% and Wipro down by 0.22% were the few losers.

Meanwhile, in efforts to check widening current account deficit (CAD) by curbing imports, the government has again hiked the import duty on several electronic items and telecom equipment. The Central Board of Excise and Customs (CBIC) said the increased duties would be effective from October 12. This is the second round of import duty hike announced by the government in a little over a fortnight.

Import duty on populated, loaded or stuffed printed circuit boards of all goods other than mobile phones, base station and optical transport equipments has been raised to 10%. Duty has also been raised to 20% from 10% for base stations and for machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus other than modems, voice frequency telegraphy, digital loop carrier systems and multiplexers.

The import duty has also been hiked on certain inputs used in the communication industry like Printer Circuit Board Assembly (PCBA). The government had on September 26 doubled the import duty on 19 items, including air conditioners, household refrigerators and washing machines (less than 10 kg), to 20%. The CAD widened to 2.4% of the Gross Domestic Product (GDP) in the first quarter of 2018-19.

The CNX Nifty is currently trading at 10430.80, up by 196.15 points or 1.92% after trading in a range of 10322.15 and 10449.15. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 5.02%, Maruti Suzuki up by 4.43%, Mahindra & Mahindra up by 4.07%, ITC up by 3.98% and Yes Bank was up by 3.98%. On the flip side, TCS down by 3.08%, HCL Tech down by 2.73%, Dr Reddys Lab down by 0.62%, Sun Pharma down by 0.30% and Cipla was down by 0.19% were the top losers.

Asian markets were trading mostly in green, KOSPI gained 38.71 points or 1.79% to 2,168.38, Straits Times rose 5.75 points or 0.19% to 3,053.14, Jakarta Composite surged 55.58 points or 0.97% to 5,758.40, Hang Seng soared 371.93 points or 1.45% to 25,638.30 and Taiwan Weighted was up by 200.39 points or 2% to 10,006.50.

On the other hand, Shanghai Composite slipped 3.22 points or 0.12% to 2,580.24 and Nikkei 225 was down by 68.07 points or 0.3% to 22,522.79.