Bourses maintain upbeat mood in afternoon deals

Indian equity indices maintained their upbeat mood in afternoon session, as buying pace gathered momentum, triggered by fall in global crude prices and encouraging corporate earnings. Jubilation continued on Dalal Street with finance minister Arun Jaitely’s statement that India’s target of being among the top 50 countries in World Bank’s Ease of Doing Business Rankings looks plausible. Additional support came with private report that India’s equity market capitalisation would grow at a compound annual rate of 12% to reach $6 trillion by 2028. Some optimism also spread among the investors with a report stated that monthly goods and services tax (GST) collections breached the Rs 1-lakh-crore mark for the second time since its launch in July last year for September, giving the Centre some hope that the wide revenue gap against its budget target could be narrowed in the second half of the fiscal. Moreover, strengthening rupee against the dollar and a firm trend at other Asian markets also fuelled the uptrend. On the global front, Asian markets were trading in green, on optimism about a potential ceasefire in the trade war between the United States and China.

The BSE Sensex is currently trading at 35007.75, up by 575.78 points or 1.67% after trading in a range of 34649.80 and 35097.24. There were 28 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.70%, while Small cap index was up by 1.54%.

The top gaining sectoral indices on the BSE were Auto up by 3.93%, Metal up by 3.35%, Basic Materials up by 3.32%, Consumer Disc up by 2.73% and Oil & Gas up by 2.66%, while IT down by 0.47% and TECK down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 5.43%, Yes Bank up by 5.08%, Maruti Suzuki up by 5.05%, Adani Ports &SEZ up by 4.93% and Hero MotoCorp up by 4.90%. On the flip side, Wipro down by 1.42%, TCS down by 0.39% and Infosys down by 0.35% were the top losers.

Meanwhile, Credit ratings agency, Crisil Ratings in its latest report has said that Indian airlines may register steepest losses in a decade in the financial year 2018-19, in wake of higher aviation fuel prices and falling rupee. Pitching for a 12 percent hike in airfares to offset the increased costs, it also forecasts debt liability of three listed airlines to go up by 10 percent by FY19. It indicated that Aviation Turbine Fuel (ATF) alone accounts for 35-40 percent of a carrier's operational costs, while aircraft, engine rentals and maintenance costs, which are denominated in US dollars, together account for another 30-35 percent of the costs. 

According to the report, at an estimated Rs 9,300 crore, the industry's losses at EBIT (earnings before interest and tax) level would surpass the Rs 7,348 crore blow it was dealt in fiscal 2014 and that was followed by three good years through fiscal 2018, when carriers reeled in aggregate profit of Rs 4,000 crore on average at the EBIT level. Noting that the ATF prices are expected to average 28 percent higher on-year compared with FY18, it said such a hike will have a significant impact on the airlines' balance sheets. It added that the government has taken some measures to support the industry by reducing the excise duty on ATF or jet fuel to 11 percent from 14 percent earlier, but this will not materially curb the losses.

Crisil further said that on the other side, the rupee has declined by 13 percent against the dollar since March, which is expected to dealt a severe blow to the domestic airlines' financials. It pointed out that to offset the increase in operating cost, the industry will have to hike average fares by 12 percent, assuming there is no change in the passenger load factor (PLF) or seat factor. However, it said that the aggressive expansion plans of carriers and the race to maintain high PLFs will keep competitive intensity high and limit their ability to increase fares. Observing that the PLFs are highly sensitive to fares, it said that in the past three fiscals, benign ATF prices helped airlines keep fares stable.

The CNX Nifty is currently trading at 10551.95, up by 171.50 points or 1.65% after trading in a range of 10457.70 and 10584.20. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were BPCL up by 6.33%, Vedanta up by 5.31%, Adani Ports &SEZ up by 5.11%, Maruti Suzuki up by 4.99% and Hero MotoCorp up by 4.90%. On the flip side, Wipro down by 1.41%, Dr. Reddys Lab down by 1.25%, Cipla down by 1.03%, Tech Mahindra down by 0.79% and Zee Entertainment down by 0.60% were the top losers.

Asian markets were trading in green; Shanghai Composite increased 66.59 points or 2.49% to 2,672.83, Jakarta Composite was up by 44.84 points or 0.76% to 5,880.76, Taiwan Weighted added 61.85 points or 0.62% to 9,906.59, Hang Seng surged 911.39 points or 3.46% to 26,327.39, Straits Times increased 40.00 points or 1.29% to 3,100.85, KOSPI soared 71.54 points or 3.41% to 2,096.00 and Nikkei 225 advanced 556.01 points or 2.5% to 22,243.66.