Benchmarks erase early gains to trade flat

Indian equity benchmarks, after making an optimistic start, erased most of their early gains and are now trading flat on Thursday. Traders remained on sidelines ahead of manufacturing PMI data to be released later in the day. Market participants turned cautious after the commerce and industry ministry’s data showed that growth of eight infrastructure sectors slowed down to 4.3% in September, the lowest in the last four months, as production of crude oil and natural gas declined. However, downside remained capped with report that India jumped 23 spots in the World Bank’s ease of doing business ranking to 77th place, becoming the top ranked country in South Asia for the first time and third among the BRICS. As per the report, the biggest gain was in construction permit where India climbed 129 ranks to 52nd place on the back of targeted government effort to remove hurdles. Traders took note of Industry chamber FICCI’s statement that more measures are needed to make adequate liquidity available in the system and strengthen the financial sector for attaining 8% plus gross domestic product (GDP) growth.

On the global front, Asian markets started November with widespread gains with most of the markets trading in green on Thursday, following the overnight gains on Wall Street for a second straight session amid upbeat corporate earnings results and data showing stronger than expected private-sector job growth in October. Bucking the trend, the Japanese market decline.

Back home, the Department of Industrial Policy and Promotion (DIPP) is working with the tax department and regulators to ease the rules and laws for startups to support budding entrepreneurs. In scrip specific development, Escorts traded higher with Agri Machinery Segment reporting 28.8% growth in tractor sales in October. VA Tech Wabag gained on bagging EPC order from Power & Water Utility Company. 

The BSE Sensex is currently trading at 34465.63, up by 23.58 points or 0.07% after trading in a range of 34455.04 and 34679.93. 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 0.87%, while Small cap index was up by 0.99%.

The top gaining sectoral indices on the BSE were Capital Goods up by 4.07%, Industrials up by 2.60%, Realty up by 1.78%, Metal up by 0.89% and Basic Materials was up by 0.85%, while IT down by 1.36%, TECK down by 1.28%, Utilities down by 0.32%, Telecom down by 0.30% and FMCG was down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 5.36%, Yes Bank up by 4.63%, Adani Ports & SEZ up by 1.88%, ONGC up by 1.47% and Tata Motors - DVR was up by 1.44%. On the flip side, Wipro down by 2.53%, NTPC down by 1.31%, Infosys down by 1.17%, Indusind Bank down by 1.15% and TCS was down by 1.06% were the top losers.

Meanwhile, India has improved its ranking on the World Bank's ‘ease of doing business’ report for the second straight year. In its annual 'Doing Business' 2019 report, World Bank (WB) said India jumped 23 places to rank 77th position on the back of reforms related to insolvency, taxation and other areas. Last year, India was ranked 100th in the World Bank's Doing Business report. As per the report, India improved its rank on 6 out of the 10 parameters relating to starting and doing business in a country. These parameters include ease of starting a business, construction permits, getting electricity, getting credit, paying taxes, trade across borders, enforcing contracts and resolving insolvency. The most dramatic improvements have been registered in the indicators related to 'Construction Permits' and 'Trading across Borders'.

The report said New Zealand tops the list of 190 countries in ease of doing business, followed by Singapore, Denmark, and Hong Kong. The United States is placed eight and China has been ranked 46th. Neighbouring Pakistan is placed at 136. World Bank put India among the top 10 economies to make the most improvements. Observing that the two economies with the largest populations, China and India, demonstrated impressive reform agendas, the World Bank said India also focused on streamlining business processes. It added that India made starting a business easier by integrating multiple application forms into a general incorporation form. India also replaced the value-added tax with the Goods and Services Tax (GST) for which the registration process is faster.

The World Bank also said India made paying taxes easier by replacing many indirect taxes with a single indirect tax, the GST, for the entire country. India also made paying taxes less costly by reducing the corporate income tax rate and the employees' provident funds scheme rate paid by the employer. Stating that a well-designed insolvency framework is a vital determinant of debt recovery, it said the establishment of debt recovery tribunals in India reduced non-performing loans by 28% and lowered interest rates on larger loans, suggesting that faster processing of debt recovery cases cut the cost of credit.

The report further stated that India reduced the time and cost of export and import through various initiatives, including the implementation of electronic sealing of containers, the upgrading of port infrastructure and allowing electronic submission of supporting documents with digital signatures. World Bank said India has further streamlined the process of obtaining a building permit and made it faster and less expensive to obtain a construction permit. It also improved building quality control by introducing decennial liability and insurance.

The CNX Nifty is currently trading at 10377.15, down by 9.45 points or 0.09% after trading in a range of 10376.70 and 10441.90. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 5.23%, Yes Bank up by 4.65%, Indiabulls Housing Finance up by 2.87%, HPCL up by 1.85% and Adani Ports & SEZ was up by 1.74%. On the flip side, Tech Mahindra down by 2.94%, HCL Tech down by 2.83%, Wipro down by 2.26%, Bharti Infratel down by 1.71% and Cipla was down by 1.47% were the top losers.

Asian markets are trading mostly in green, Taiwan Weighted surged 40.25 points or 0.41% to 9,842.38, KOSPI jumped 14.60 points or 0.71% to 2,044.29, Shanghai Composite advanced 29.44 points or 1.12% to 2,632.22, Hang Seng strengthened 460.28 points or 1.81% to 25,439.97, Straits Times gained 34.67 points or 1.14% to 3,053.47 and Jakarta Composite up by 19.76 points or 0.34% to 5,851.41.

On the flip side Nikkei 225 down by 152.04 points or 0.7% to 21,768.42.