Local equities pare all losses to trade in green

Local equity benchmarks pared all of their initial losses in the morning session and started trading in positive trajectory, with Sensex and Nifty garnering gains of around quarter a percent. Buoyant Mid-caps and Small-caps also elevated over 1% gains on their respective front line stocks. Market participants took some encouragement with a report that India and Japan signed a pact to raise the scope of a bilateral currency swap arrangement to a record $75 billion, aimed at bringing in greater stability in the foreign exchange and capital markets, amid a slide in the rupee in recent months. However, gains remain capped on a report that domestic coal supply remains significantly short of the domestic demand on the back of strong recovery in power demand and a healthy growth in production levels from non-regulated consuming sectors like cement, aluminum and steel. Besides, a private report also stated that high oil prices are hurting consumers and could also have adverse implications for producers. Major emerging Asian economies such as India and Indonesia have been hit hard this year by rising crude oil prices.

On the global front, Asian markets were trading in mostly in green, as mainland Chinese stocks saw a rebound following comments from the country's securities regulator. Back home, India to export its rice varieties to China and urged it to open up its $2 billion rice import market based on an agreement signed between the two nations during Prime Minister Narendra Modi's visit to China in June. In scrip specific development, Union Bank of India gained on reporting net profit of Rs 139 crore in Q2FY19. Besides, Glenmark surged on receiving USFDA’s final approval for Fluocinolone Acetonide Topical Oil.

The BSE Sensex is currently trading at 34149.29, up by 81.89 points or 0.24% after trading in a range of 33931.47 and 34172.74. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.03%, while Small cap index was up by 1.06%.

The top gaining sectoral indices on the BSE were IT up by 1.97%, TECK up by 1.79%, Auto up by 1.23%, Consumer Durables up by 1.07% and Consumer Disc was up by 0.88%, while Energy down by 1.31%, Oil & Gas down by 0.63%, Power down by 0.40% and Metal was down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.79%, Infosys up by 2.52%, Tata Motors - DVR up by 2.08%, SBI up by 1.94% and Yes Bank was up by 1.66%. On the flip side, Coal India down by 1.57%, Power Grid Corporation down by 1.35%, Reliance Industries down by 1.34%, Tata Steel down by 1.16% and IndusInd Bank was down by 1.14% were the top losers.

Meanwhile, in a bid to support domestic players, the government is mulling a proposal to increase import duties on aluminium scrap and primary aluminium. The industry has demanded for the same amid a high growth in inwards shipments of these items. Presently, the basic customs duty on primary aluminium is 7.5 percent while the same on aluminium scrap is 2.5 percent.

The Aluminium Association of India (AAI) has also urged the government to increase the duty on imports of aluminium scrap as the domestic sector may become a victim of escalating trade war between the US and China. It said that an estimated 30 percent of China's aluminium scrap imports come from the US. It noted that aluminium is required by industries like automobile, construction, consumer goods, etc. and all these industries are growing in India and the country is producing sufficient amount of required metal domestically.

Total production of aluminium in India is about 4 million tonnes and consumption is around 3.6 million tonnes. The demand comes in the wake of the US imposing 10 percent duty on certain aluminium products. China, too, has raised the duties. As per estimates, during Q1 (April-June) of 2018-19, imports of aluminium scrap increased to 36,000 tonnes from 16,000 tonnes.

The CNX Nifty is currently trading at 10278.95, up by 28.10 points or 0.27% after trading in a range of 10206.30 and 10283.35. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.88%, Tech Mahindra up by 2.76%, GAIL India up by 2.68%, HCL Tech up by 2.59% and Infosys was up by 2.52%. On the flip side, BPCL down by 3.86%, HPCL down by 3.06%, Coal India down by 1.76%, Power Grid Corporation down by 1.53% and Reliance Industries was down by 1.42% were the top losers.

Asian markets were trading in mostly in green, Taiwan Weighted increased 2.22 points or 0.02% to 9,518.54, Hang Seng rose 74.77 points or 0.3% to 24,886.81, Nikkei 225 gained 314.02 points or 1.46% to 21,463.82, KOSPI soared 29.38 points or 1.45% to 2,025.43, Shanghai Composite surged 32.78 points or 1.27% to 2,574.88 and Jakarta Composite was up by 28.20 points or 0.49% to 5,782.81.

On the other hand; Straits Times was down by 7.71 points or 0.26% to 2,973.83.