Firm trade persists on Dalal Street

Firm trade persisted on Dalal Street in late afternoon session, despite weak opening in European markets. In line with the larger peers, the broader indices too kept their head above water. The street were getting relief with reports that Commerce and industry minister Suresh Prabhu will meet the banking and financial services secretaries next week to resolve the huge decline in bank credit to exporters. Traders took note of Governor Shaktikanta Das’ statement that the Reserve Bank of India (RBI) will not like the banking system to be in a situation of loose money. He further said that the RBI is also looking at new governance reforms for state-owned banks but will not throttle their functioning.

But, upside remained capped with a private report stating that India may have to forgo as much as $1.97 trillion in gross domestic product (GDP) growth promised by investment in intelligent technologies over the next decade if the country fails to bridge the skill gap. On the sectoral front, stocks related to agri sector were in focused, with Minister of State for Chemicals and Fertilisers Rao Inderjit Singh’s statement that a committee to look into direct transfer of fertiliser subsidy to farmers has been set up by NITI Aayog and its report is awaited. The idea is to provide subsidy to farmers directly.

On the global front, European markets were trading in red, even though Eurozone's consumer price inflation slowed more-than-expected in December to its lowest level in eight months. The consumer price index rose 1.6 percent year-on-year following a 1.9 percent increase in November. However, Asian markets were trading in green, as China's service sector growth hit a six-month high in December amid greater demand from abroad, leading to faster private sector expansion. The survey results from IHS Markit showed that the headline seasonally adjusted Caixin services Purchasing Managers' Index rose slightly to 53.9 from 53.8 in November.

The BSE Sensex is currently trading at 35929.57, up by 234.47 points or 0.66% after trading in a range of 35892.05 and 36076.95. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.14%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Realty up by 2.06%, Consumer Durables up by 1.19%, Power up by 1.16%, Utilities up by 1.09% and IT up by 1.05%, while Healthcare down by 0.28% was the only losing index on BSE.

The top gainers on the Sensex were Tata Motors up by 3.05%, Axis Bank up by 2.86%, Tata Motors - DVR up by 2.79%, NTPC up by 2.44% and Maruti Suzuki up by 1.94%. On the flip side, Bajaj Auto down by 2.36%, Hero MotoCorp down by 0.79%, SBI down by 0.64%, Bajaj Finance down by 0.36% and Coal India down by 0.32% were the top losers.

Meanwhile, expressing confidence about the country’s economic growth, newly elected president of the Federation of Indian Chambers of Commerce and Industry (FICCI) Sandip Somany has said that Indian economic growth is expected to grow at 7.5-7.6% in 2019-20, on the back of agricultural reforms, interest rate cut and credit availability to micro, small and medium enterprises.

FICCI President noted that exports may get hit with uncertainty due to global factors but domestically, except a few months of election, the economy is on a good footing. He also said ‘If interest rates are taken care of and there is availability of credit to MSMEs, then there is enough demand growth.’ He favoured at least a 100 basis points rate cut, underlining that India’s real interest rates are very high.

Further, Sandip Somany praised the various reforms taken by the government such as the Insolvency and Bankruptcy Code. Though, he said ‘we need to look at reforms in agriculture to improve our productivity and change the type of agricultural produce we make. We do very little value added products’  and added that farm loan waivers are not a sustainable solution but only temporary patch work to ease farmers’ distress.

The CNX Nifty is currently trading at 10786.00, up by 58.65 points or 0.55% after trading in a range of 10782.05 and 10835.95. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.87%, Tata Motors up by 2.84%, Bharti Infratel up by 2.39%, NTPC up by 2.33% and Maruti Suzuki up by 1.97%. On the flip side, Indiabulls Housing Finance down by 2.93%, Bajaj Auto down by 2.51%, Dr. Reddy’s Lab down by 1.88%, Zee Entertainment down by 0.99% and Indian Oil Corporation down by 0.93% were the top losers.

All Asian markets were trading in green; Straits Times advanced 36.82 points or 1.20% to 3,096.05, Shanghai Composite gained 18.22 points or 0.72% to 2,533.09, Hang Seng increased 209.67 points or 0.82% to 25,835.70, KOSPI rose 26.85 points or 1.34% to 2,037.10, Nikkei 225 surged 477.01 points or 2.44% to 20,038.97, Jakarta Composite soared 12.68 points or 0.20% to 6,287.22 and Taiwan Weighted was up by 207.79 points or 2.21% to 9,590.30.

All European markets were trading in red; UK’s FTSE 100 lost 11.92 points or 0.17% to 6,825.50, Germany’s DAX fell 10.05 or 0.09% points to 10,757.64 and France’s CAC was down by 9.47 points or 0.20% to 4,727.65.