Benchmarks make optimistic start on penultimate session of F&O expiry

Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals on Wednesday with frontline gauges recapturing their crucial 35,700 (Sensex) and 10,700 (Nifty) levels. Sentiments remained upbeat with a report that the Reserve Bank of India (RBI) Governor Urjit Patel told law makers that the note ban’s impact was transient and the economy is robust. He said the economy would get a boost from oil prices cooling off from four-year highs and asserted that the fundamentals were robust. Traders also took some encouragement with Commerce and Industry Minister Suresh Prabhu’s statement that he has taken up the issue of declining credit to exporters with the finance ministry to ensure adequate availability of funds to them. Meanwhile, the Reserve Bank of India (RBI) has decided to inject a higher amount of Rs 40,000 crore through purchase of government securities under open market operations (OMOs) in December 2018.

Global cues too remained supportive with Asian markets trading mostly in green at this point of time as risk assets rowed back amid conflicting signals on prospects for de-escalating the Sino-US trade dispute. The US markets ended Tuesday’s choppy session in green territory as comments from President Donald Trump’s top economic advisor sparked some hope the US and China will strike a compromise on trade.

Back home, telecom sector stocks remained under pressure despite report that regulator Trai will meet top officials of telecom companies on November 28 to discuss the major issues that should be taken up for deliberation during 2019. Power sector stocks edged lower with report that stressing on tough steps to reform power sector, Niti Aayog CEO Amitabh Kant pitched for ban on use of fossil fuel based gensets saying that the government needs to do it before a court order six months down the line.

The BSE Sensex is currently trading at 35722.14, up by 209.00 points or 0.59% after trading in a range of 35605.34 and 35722.70. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.14%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were IT up by 1.11%, TECK up by 1.09%, FMCG up by 0.77%, Consumer Durables up by 0.77% and Consumer Discretionary Goods & Services up by 0.55%, while Realty down by 1.30%, Oil & Gas down by 0.50%, PSU down by 0.22%, Power down by 0.18% and Capital Goods down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.97%, Indusind Bank up by 1.87%, HDFC up by 1.00%, Hero MotoCorp up by 0.95% and Tata Steel up by 0.86%. On the flip side, Yes Bank down by 4.01%, ONGC down by 1.61%, NTPC down by 1.30%, Coal India down by 0.81% and Adani Ports & SEZ down by 0.58% were the top losers.

Meanwhile, in a bid to meet durable liquidity requirements of the financial markets, the Reserve Bank of India (RBI) has decided to infuse Rs 40,000 crore additional liquidity into the system through purchase of government securities under open market operations (OMOs) in December 2018. The central bank will detail about the auction dates for the OMOs in due course.

It added that this OMO amount is indicative with the RBI retaining the flexibility to change it, depending on the evolving liquidity and market conditions. The RBI had announced to inject Rs 40,000 crore into the system in November. It has already infused Rs 30,000 crore into the system, while the rest Rs 10,000 crore liquidity would be pumped in through auction on November 29, 2018, through multi-security auction using the multiple price method.

The central bank already, in October, injected Rs 36,000 crore into the system through OMOs. The RBI had earlier stated that the system liquidity will move into deficit in the second half of 2018-19 and the evolving liquidity conditions would determine its choice of instruments for both transient and durable liquidity management.

The CNX Nifty is currently trading at 10734.60, up by 49.00 points or 0.46% after trading in a range of 10699.85 and 10737.05. There were 32 stocks advancing against 17 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Zee Entertainment up by 3.88%, Indusind Bank up by 1.76%, Infosys up by 1.74%, Titan Co up by 1.50% and Hero MotoCorp up by 1.38%. On the flip side, Yes Bank down by 4.00%, Indian Oil Corporation down by 2.20%, BPCL down by 1.54%, ONGC down by 1.47% and NTPC down by 1.37% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 235.05 points or 1.06% to 22,187.45, Taiwan Weighted increased 48.33 points or 0.49% to 9,826.95, Hang Seng gained 240.39 points or 0.9% to 26,572.35, KOSPI added 4.53 points or 0.22% to 2,103.95 and Shanghai Composite was up by 22.16 points or 0.85% to 2,596.84.

On the flip side, Straits Times decreased 0.45 points or -0.01% to 3,089.95 and Jakarta Composite was down by 9.32 points or 0.16% to 6,004.27.