Local equities continue trade in green territory

Local equity benchmarks continued their trade in green territory on account of buying in front line counters, with Sensex and Nifty trading with half a percent gains. High beta indices like IT and Telecom inched higher with the up-move on the benchmarks. Among heavy-weights Tata Motors, Adani Ports and TCS exhibited a smart performance. Traders took some support from a survey report that the country’s services sector in October expanded at the quickest pace since July, driven by significant increase in new business orders, which, in turn, led to robust workforce expansion. Market participant also took note of a report stating that over 100 Indian investors participated in a business conference in the UAE to strengthen Sharjah’s trade relations with India and to promote the Gulf emirate as a leading business and investment hub in the region. Traders ignored Finance Minister Arun Jaitley’s statement that excessive competition at times can result in stress in a particular sector, pointing out that these are challenges of the growing economy. He also said that with the growing economy, the role of each regulator will expand.

On the global front, Asian markets were trading mixed, after Donald Trump’s top economic adviser downplayed the chances of a quick deal to end the China-US trade war, taking the wind out of the sails of last week’s rally. Back home, India is eyeing giving a boost to its exports of food and agro products, pharmaceuticals, Information Technology (IT) and services such as tourism to China. These four areas represent very minuscule Indian presence in China contrary to India’s strength and overall global presence.

The BSE Sensex is currently trading at 35115.25, up by 164.33 points or 0.47% after trading in a range of 35018.13 and 35196.03. There were 20 stocks advancing against 10 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.04%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were TECK up by 1.33%, IT up by 1.31%, Telecom up by 1.11%, Energy up by 1.11% and Industrials was up by 0.77%, while Metal down by 1.18%, Basic Materials down by 0.53%, FMCG down by 0.32%, PSU down by 0.11% and Healthcare was down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 4.36%, Tata Motors up by 3.77%, Adani Ports up by 2.22%, TCS up by 2.02% and Reliance Industries was up by 1.73%. On the flip side, Vedanta down by 5.75%, SBI down by 1.73%, Mahindra & Mahindra down by 0.71%, ITC down by 0.68% and Axis Bank was down by 0.66% were the top losers.

Meanwhile, highlighting positives like dip in crude prices and the $75-billion currency swap with Bank of Japan, rating agency Crisil in its latest report has said that the Indian rupee may appreciate to 71 against the dollar by March 2019. Pegging 71 to a dollar as its base case, it said there is a 50% probability for the rupee to be at that level by March 2019.

Crisil said there is a 35% probability for the rupee settling at 74 against the dollar in the same time period and there is only a 15% likelihood of its appreciating to its earlier target of 68.5 against the greenback. It noted that the rising interest rates in the US are among the biggest risks for the rupee as capital outflows will continue in such a scenario.

The report stated that the rupee depreciation in 2018 has been less severe than 2013 despite greater intensity of global shocks, pointing out that this indicates the stronger underlying resilience of the economy relative to 2013. It said crude oil has already gone up to $75.3 a barrel levels as of October 31, up from $86.1 a barrel on October 4, which should help the rupee. However, pressure continues in the form of rising interest rates in the US.

At present, it said that global risk aversion is causing investors to flee emerging markets and countries with a wider current account deficit are the most punished ones. It also said if the investor appetite changes to look at emerging markets positively, India stands better placed with strengths like higher GDP growth, lower inflation, high forex cover and better policy stability. Besides, the rupee has lost nearly 15% since April this year, which has seen it breach lifetime lows against the dollar of 74.49 against the dollar.

The CNX Nifty is currently trading at 10565.30, up by 41.30 points or 0.39% after trading in a range of 10543.25 and 10600.25. There were 29 stocks advancing against 20 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Tata Motors up by 3.71%, Adani Ports up by 2.11%, TCS up by 1.94%, Bajaj Finserv up by 1.78% and Yes Bank was up by 1.67%. On the flip side, Vedanta down by 5.93%, Cipla down by 4.36%, SBI down by 1.66%, Indian Oil Corporation down by 1.50% and HPCL was down by 0.90% were the top losers.

Asian markets were trading mixed, KOSPI gained 0.67 points or 0.03% to 2,077.59, Nikkei 225 surged 237.57 points or 1.07% to 22,136.56 and Jakarta Composite was up by 0.97 points or 0.02% to 5,921.56.

On the other side, Hang Seng slipped 51.11 points or 0.2% to 25,883.28, Shanghai Composite declined 28.08 points or 1.06% to 2,637.35 and Taiwan Weighted was down by 82.45 points or 0.84% to 9,807.36.