Bourses maintain firm trend in afternoon deals

Indian equity indices maintained their firm trend in afternoon session, tracking Asian peers and owing to the strong gains in the financial stocks. Domestic sentiments remained firm with the new foreign direct investment (FDI) policy in the e-commerce sector may not impact jobs immediately. The new FDI policy released by the government on December 26 aims to protect the interests of local businessmen, who had accused the online marketplaces of butchering their revenue. The domestic sentiment was also buoyed with report that under attack for the agrarian crisis, the government is contemplating several incentives, including a big financial package, to woo farmers ahead of the 2019 Lok Sabha elections. The government is looking at a sort of income support scheme for farmers, along with tweaking some existing programmes, to make them more beneficial and improve their acceptability among growers. Some support also came with rupee strength which was up by 33 paise to 70.02 against the dollar in early trade at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks.

On the global front, Asian markets were trading in mostly in green, after a substantial late-stage rebound by U.S. stocks overnight in a volatile session. However, gains are modest in most markets as investors remained cautious amid lingering concerns about the global economic outlook, higher interest rates and the ongoing U.S. government shutdown.

The BSE Sensex is currently trading at 36145.61, up by 338.33 points or 0.94% after trading in a range of 35911.99 and 36170.57. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.80%, while Small cap index was up by 0.81%.

The top gaining sectoral indices on the BSE were Basic Materials up by 1.25%, Consumer Durables up by 1.23%, Bankex up by 1.18%, Capital Goods up by 1.17% and Industrials up by 1.12%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were Sun Pharma up by 2.86%, ICICI Bank up by 1.97%, Yes Bank up by 1.90%, HDFC up by 1.87% and Tata Motors up by 1.66%. On the flip side, Coal India down by 2.92%, ONGC down by 0.13% and Bajaj Auto down by 0.04% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that Indian IT services companies may register 9-12 percent compounded annual growth rate (CAGR) between FY2018-21, as compared to CAGR of 17.1 percent experienced during 2013-17. It attributed the likely lower growth rates to the lower deal sizes in digital technologies, cloud adoption and high competitive intensity from local as well as international players.

ICRA has noted that Indian IT companies’ credit profile remains stable, supported by the ability to sustain free cash flows despite pressure on revenue growth and margins. It also expected that most large IT services companies to maintain high dividend pay outs and share buybacks as there are limited avenues for fund deployment.

According to the report, while companies have increased spending on digital technologies and awarding new contracts, the overall IT budgets have moderated leading to lower incremental spends. It also said that Indian IT services companies are re-orienting their business models, focusing more on high-end services such as IT consulting and emerging technologies (digital) and have made considerable progress so far, though they currently lag international peers.

The CNX Nifty is currently trading at 10878.90, up by 99.10 points or 0.92% after trading in a range of 10817.15 and 10888.30. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corp. up by 3.17%, Sun Pharma up by 3.17%, Zee Entertainment up by 2.64%, UPL up by 2.41% and Titan Co up by 2.35%. On the flip side, Coal India down by 3.12%, Asian Paints down by 0.38%, ONGC down by 0.30%, NTPC down by 0.13% and Bajaj Auto down by 0.06% were the top losers.

Asian markets were trading in mostly in green; Straits Times advanced 15.88 points or 0.52% to 3,060.62, Shanghai Composite gained 11.42 points or 0.46% to 2,494.51, Hang Seng increased 32.68 points or 0.13% to 25,511.56, KOSPI rose 12.60 points or 0.62% to 2,041.04, Jakarta Composite soared 13.33 points or 0.22% to 6,203.97 and Taiwan Weighted strengthened 85.85 points or 0.89% to 9,727.41.

On the flip side, Nikkei 225 slipped 62.85 points or 0.31% to 20,014.77.