Benchmarks trade with traction in early deals

Indian equity benchmarks made an optimistic start and are trading with traction in early deals on Monday. Sentiments remained up-beat with Union Minister of Commerce and Industry and Civil Aviation Suresh Prabhu’s statement that country’s exports rose by 9.8% in the financial year 2017-18, which is the highest rate of growth in last six years. He added that this positive growth in exports has taken place at a time when there is a lot of negative headwinds globally. Traders also took note of the RBI’s statement that it will inject Rs 400 billion into the system in November through a purchase of government securities as it looks to meet festive season demand for funds. Traders shrugged off Reserve Bank of India’s (RBI) data showing that the country’s foreign exchange reserves declined by $942 million to $393.523 billion in the week to October 19 on account of a fall in foreign currency assets.

On the global front, Asian markets are exhibiting mixed trend at this point of time as sentiments remained fragile amid heightened worries about a slowdown in global economic growth and corporate earnings. The US markets ended sharply lower on Friday on disappointing results from a handful of megacap companies amid slowdown in global growth.

Back home, banking sector stocks edged higher with the RBI’s data showing that Bank credit increased by 14.35% to Rs 89.93 lakh crore in the fortnight ended October 12, while the deposits rose by 8.86% to Rs 117.85 lakh crore. Sugar sector stocks remained in sweet spot on report that over 400 sugar producers and intermediaries are congregating on October 29, to evolve strategies to boost India’s sweetener exports in the current crushing season which began in October.

The BSE Sensex is currently trading at 33500.24, up by 150.93 points or 0.45% after trading in a range of 33341.80 and 33579.18. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.59%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.28%, Bankex up by 1.02%, Auto up by 0.92%, Consumer Discretionary Goods & Services up by 0.90% and Consumer Durables up by 0.86% while, Telecom down by 0.26% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 6.65%, Sun Pharma up by 2.39%, Axis Bank up by 1.85%, Mahindra & Mahindra up by 1.72% and Asian Paints up by 1.56%. On the flip side, Kotak Mahindra Bank down by 2.67%, Indusind Bank down by 2.54%, HDFC Bank down by 1.53%, Bharti Airtel down by 1.12% and HDFC down by 0.91% were the top losers.

Meanwhile, with an aim to meet festive season demand for funds, the Reserve Bank of India (RBI) will inject Rs 400 billion into the system in November through a purchase of government securities. For the month of October, the Central Bank has already injected Rs 360 billion into the system through Open Market Operations (OMO).

The RBI has decided to conduct the purchase of Government securities under OMOs for an aggregate amount of Rs 400 billion in the month of November 2018, based on an assessment of the durable liquidity needs going forward. It added that the auction dates and the government securities to be purchased in the respective auctions would be communicated in due course.

The Central Bank said the OMO amount stated is indicative and RBI retains the flexibility to change it, depending on the evolving liquidity and market conditions. The RBI had earlier stated that the system liquidity will move into deficit in the second half of 2018-19 and the evolving liquidity conditions would determine its choice of instruments for both transient and durable liquidity management.

The CNX Nifty is currently trading at 10072.15, up by 42.15 points or 0.42% after trading in a range of 10020.35 and 10088.05. There were 34 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 6.81%, Dr. Reddys Lab up by 5.50%, Indiabulls Housing up by 4.01%, Axis Bank up by 3.14% and Sun Pharma up by 2.26%. On the flip side, Indusind Bank down by 3.20%, Kotak Mahindra Bank down by 2.54%, JSW Steel down by 2.27%, HDFC Bank down by 2.13% and HDFC down by 1.29% were the top losers.

Asian markets are trading mixed; Nikkei 225 increased 100.25 points or 0.47% to 21,284.85, Taiwan Weighted rose 9.60 points or 0.1% to 9,498.78, Straits Times added 16.72 points or 0.56% to 2,988.74 and KOSPI was up by 1.36 points or 0.07% to 2,028.51.

On the flip side, Shanghai Composite declined 38.11 points or 1.49% to 2,560.74, Jakarta Composite decreased 5.18 points or 0.09% to 5,779.74 and Hang Seng was down by 16.58 points or 0.07% to 24,701.05.