Local equities hold positive momentum

Local equity benchmarks continued their trade with healthy gains in the morning trades, with Sensex and Nifty gaining more than 280 and 80 points, respectively. Barring Telecom stocks, there was buying across all sectoral indices. Domestic sentiment was buoyed on report that continued decline in food prices pulled down retail inflation to an 18-month low of 2.19 per cent in December 2018, creating headroom for the Reserve Bank of India (RBI) to cut interest rate in its monetary policy review next month. Traders remained optimistic with Former chief economic advisor Kaushik Basu’s statement that the RBI could ‘slightly’ reduce interest rate to boost growth.

On the global front, Asian markets were trading in green, as it rebounded from the previous day's sharp losses but investors remain wary of any further sign of weakness in the global economy while the pound extended gains ahead of a crunch Brexit vote later in the day.

Back home, on the sectoral front, fertilizer industry stocks were trading mostly in green, as a private report state that India is likely to overshoot its fertiliser subsidy bill for this financial year by 300 billion rupees ($4.2 billion) and the government could tap state banks to fund the extra spending. Agriculture industries stock were in focus as US President Donald Trump stated that his trade and tariff policies have started working and many countries, including India, have opened up their markets for American poultry and agricultural products that were not allowed previously.

The BSE Sensex is currently trading at 36138.46, up by 284.90 points or 0.79% after trading in a range of 35950.08 and 36192.92. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.51%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Energy up by 2.00%, IT up by 1.67%, TECK up by 1.42%, Oil & Gas up by 1.04% and Basic Materials was up by 0.65%, while Telecom was down by 0.79% were the only losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 4.27%, Infosys up by 2.61%, Reliance Industries up by 2.52%, Asian Paints up by 1.40% and TCS was up by 1.11%. On the flip side, Bharti Airtel down by 1.49%, Power Grid down by 0.57%, Tata Motors - DVR down by 0.26%, ICICI Bank down by 0.11% and Tata Steel was down by 0.01% were the top losers.

Meanwhile, in order to boost growth, Former chief economic advisor Kaushik Basu has said the Reserve Bank of India (RBI) could slightly reduce interest rate. He underlined ‘Non-performing assets (NPAs) have made the banks cautious. However, India can do with slightly lower rate of interest’.  The RBI's monetary policy review is slated in February.

He further stated that the RBI should be left alone with complete autonomy. Moreover, he said that the investment rate in India was on the decline. Talking about the Goods and Services Tax (GST), he stated it was borrowed from advanced countries and ‘poorly implemented’, and demonetisation was a ‘bad idea’.

Besides, the RBI in its last monetary policy review, which held in December 2018,  had kept repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%, in line with expectations, taking into account easing global crude prices, benign inflation and moderation in economic growth. This was for the second time in a row that the central bank maintained status quo. Consequently, the reverse repo rate under the LAF stood at 6.25%.

The CNX Nifty is currently trading at 10825.85, up by 88.25 points or 0.82% after trading in a range of 10777.55 and 10837.50. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.30%, Wipro up by 2.96%, Zee Entertainment up by 2.74%, Reliance Industries up by 2.53% and Infosys was up by 2.52%. On the flip side, Bharti Airtel down by 1.36%, Power Grid down by 0.68%, Bharti Infratel down by 0.62%, GAIL India down by 0.12% and NTPC was down by 0.03% were the top losers.

All Asian markets were trading in green, Nikkei 225 surged 187.96 points or 0.92% to 20,547.66, Hang Seng increased 428.44 points or 1.63% to 26,726.77, Taiwan Weighted strengthened 66.76 points or 0.69% to 9,774.98, Straits Times advanced 40.82 points or 1.29% to 3,214.28, Jakarta Composite soared 15.67 points or 0.25% to 6,351.79, KOSPI rose 29.19 points or 1.41% to 2,093.71 and Shanghai Composite was up by 24.40 points or 0.96% to 2,560.17.