Sensex, Nifty trim gains but continue to trade in green

Indian equities trimmed most of their gains but continued to trade in green in the afternoon session, on the back of buying by funds and retail investors. The indices remained in green with Ministry of Commerce and Industry’s report that India’s trade deficit in September narrowed to lowest in the last five months since the imports growth slowed even as exports fell marginally during the month. September trade deficit fell to $13.98 billion. Some support also came with the United Nations Conference on Trade and Development (UNCTAD) in its 'Investment Trends Monitor' report indicating that in South Asia, India attracted $22 billion of foreign direct investment (FDI) flows, contributing to the sub-region’s 13 percent rise in FDI in the first half of 2018 (H1 2018).’ However, some gains were trimmed as traders remained worried with private report that merchandise exports witnessed the worst contraction in 26 months in September despite a weak rupee, thanks mainly to an unfavourable base. On the sectoral front, select sugar stocks were trading in green on expectation that the government will take steps to boost ethanol production.

Asian markets were trading mixed, as increasing tensions between Saudi Arabia and the West have fanned geopolitical concerns. Back home, the BSE Sensex is currently trading at 35034.20, up by 169.10 points or 0.49% after trading in a range of 34913.06 and 35215.79. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.57%, while Small cap index was up by 1.26%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.17%, Industrials up by 1.05%, Basic Materials up by 1.04%, Bankex up by 1.00% and Telecom up by 0.86%, while FMCG down by 0.12%, Power down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.06%, ICICI Bank up by 2.22%, Axis Bank up by 2.11%, ONGC up by 2.00% and Asian Paints up by 1.50%. On the flip side, ITC down by 1.30%, NTPC down by 0.94%, Power Grid down by 0.77%, Wipro down by 0.69% and Sun Pharma down by 0.58% were the top losers.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) in its 'Investment Trends Monitor' report has indicated that in South Asia, India attracted $22 billion of foreign direct investment (FDI) flows, contributing to the subregion’s 13 percent rise in FDI in the first half of 2018 (H1 2018). However, it also said that with the $22 billion FDI, India just about managed to make it to the top 10 countries that received the most FDI during the period.

According to the report, China emerged as the largest global FDI recipient, attracting an estimated $70 billion in inflows in the first half of the year, followed by the UK with $65.5 billion, the US with $46.5 billion, The Netherlands at $44.8 billion, Australia with $36.1 billion, Singapore got $34.7 billion and Brazil received $25.5 billion. It also disclosed that global foreign direct investment dropped by 41 percent in the first six months of this year, to an estimated $470 billion as against $794 billion in the same period of 2017, on the back of large repatriations by the US parent companies of accumulated foreign earnings from their affiliates aboard following tax reforms.

The report pointed out that the fall in global FDI is mainly owing to recent tax reforms implemented by US President Donald Trump's administration that led to big firms in the US to bring home earnings from abroad - principally from Western European countries. It also said that other factors have contributed to this year's ‘huge difference in repatriation’ of overseas profits by US multinationals. It noted that these include uncertainty about the detail and impact of tax reform and the potential impact of unresolved international trade disputes; such as the tit-for-tat tariffs imposed by the US and China. In contrast to the overall decline in foreign investment, it highlights a 42 percent increase in so-called ‘greenfield’ projects to $454 billion.

The CNX Nifty is currently trading at 10552.55, up by 40.05 points or 0.38% after trading in a range of 10525.30 and 10604.90. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.06%, ICICI Bank up by 2.19%, ONGC up by 2.06%, Bharti Infratel up by 2.01% and Axis Bank up by 2.00%. On the flip side, Indiabulls Housing Finance down by 2.71%, ITC down by 1.70%, Cipla down by 1.48%, HPCL down by 1.36% and NTPC down by 1.03% were the top losers.

Asian markets were trading mixed; Nikkei 225 increased 277.94 points or 1.23% to 22,549.24, Taiwan Weighted was up by 79.98 points or 0.8% to 9,981.10 and Jakarta Composite added 18.24 points or 0.32% to 5,745.50.

On the flip side, Straits Times was down by 9.15 points or 0.3% to 3,036.82, Shanghai Composite dropped 23.82 points or 0.94% to 2,544.28 and Hang Seng decreased 127.40 points or 0.5% to 25,317.66.