Local equities erase initial gains to trade flat

Local equity benchmarks erased their initial gains in morning session and continue to trade flat. Weakness was also visible in the broader markets with the S&P BSE Mid-cap trading slightly lower and the S&P BSE Small-cap indices losing around half a percent. Traders turned cautious with National Green Tribunal chairman Justice Adarsh Kumar Goel stated that India has earned its pride of place in the world with its economy growing ‘very fast’ but a large number of people still live below the poverty line. The country had no doubt achieved growth but it was not ‘enough’ to meet the aspirations of the freedom fighters who had drafted the Constitution. However, downside remained capped as traders took note of a report that the government has increased the outlay by Rs 100 crore to Rs 895 crore for the first phase of the FAME India scheme to promote mass adoption of electric vehicles, having extended the scheme four times. Besides, the Reserve Bank of India (RBI) reported that the country’s foreign exchange reserves rose by $568.9 million to $393.580 billion in the week to November 16, mainly due to a spurt in foreign currency assets.

On the global front, Asian markets were trading in green, on hopes that US President Donald Trump and his Chinese counterpart Xi Jinping will unwind a blistering trade dispute at a meeting this week. Back home, on the sectoral front, Agricultural industry stocks were in focus, as the Union Cabinet is expected to consider the proposed agriculture export policy, which aims at doubling outbound shipments of farm products and increasing their share in the world market.

The BSE Sensex is currently trading at 34995.20, up by 14.18 points or 0.04% after trading in a range of 34953.87 and 35184.93. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.13%, while Small cap index was down by 0.42%.

The top gaining sectoral indices on the BSE were Telecom up by 0.85%, Capital Goods up by 0.54%, FMCG up by 0.50% and Bankex was up by 0.15%, while IT down by 1.41%, Consumer Durables down by 1.07%, Metal down by 1.01%, TECK down by 1.00% and Basic Materials was down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.03%, HDFC Bank up by 1.22%, Asian Paints up by 1.19%, Hindustan Unilever up by 1.12% and Larsen & Toubro was up by 1.07%. On the flip side, Yes Bank down by 5.29%, ONGC down by 2.92%, Adani Ports down by 1.95%, Sun Pharma down by 1.87% and Infosys was down by 1.62% were the top losers.

Meanwhile, in order to meet the fiscal deficit target, Finance Minister Arun Jaitley has said that the government does not need any extra funds from the Reserve Bank of India (RBI) or any other institution. However, he said that extra funds, which may accrue from the new capital framework of the RBI, can always be used for poverty alleviation programmes over the years by future governments. Besides, India’s fiscal deficit is slated to come down to 3.3% of Gross Domestic Product (GDP) at the end of the current fiscal.

Over the criticism that the government was eyeing RBI’s reserves, Jaitley said globally central banks have a capital framework which determines the amount of funds that ought to be maintained as reserves. He said “All we are saying is there has to be some discussion and some norms under which Reserve Bank will have a capital framework,”.

Regarding to the autonomy of the RBI, Finance Minister said it has to be exercised within the framework of law. He said “The government’s viewpoint is that we respect and we will always maintain the autonomy within the framework of the laws which have been laid down”. He added that the government would continue to flag issues with the RBI in the larger interest of the economy, and there has to be coordination between the central bank and the government and he said “If there are sectors of economy which are starved of liquidity or credit, as a sovereign government… we certainly will flag those issues wherever the RBI has the authority to decide certain things”.

The CNX Nifty is currently trading at 10516.35, down by 10.40 points or 0.10% after trading in a range of 10516.15 and 10584.95. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.18%, HPCL up by 1.96%, BPCL up by 1.91%, Zee Entertainment up by 1.78% and Asian Paints was up by 1.22%. On the flip side, Yes Bank down by 5.22%, ONGC down by 2.86%, Tech Mahindra down by 2.68%, Sun Pharma down by 2.26% and Titan Company was down by 2.20% were the top losers.

Asian markets were trading in green; Jakarta Composite increased 2.63 points or 0.04% to 6,008.83, Nikkei 225 increased 154.06 points or 0.71% to 21,800.61, Straits Times increased 27.71 points or 0.9% to 3,080.20, Hang Seng increased 444.11 points or 1.68% to 26,371.79, KOSPI increased 23.63 points or 1.14% to 2,081.11, Shanghai Composite increased 7.48 points or 0.29% to 2,586.96 and Taiwan Weighted increased 81.33 points or 0.83% to 9,748.63.