Benchmarks trade in fine fettle in early deals amid firm global cues

Indian equity benchmarks made a positive start and are trading in fine fettle in early deals on Wednesday with frontline gauges recapturing their crucial 36,400 (Sensex) and 10,900 (Nifty) levels amid firm global cues. Traders took some encouragement with the Reserve Bank of India’s (RBI) statement that it would inject Rs 10,000 crore into the system through purchase of government securities on January 17 to increase liquidity. The purchase will be made through open market operations (OMOs). The RBI plans to inject liquidity under OMOs for Rs 50,000 crore in January 2019. The central bank has so far injected Rs 20,000 through OMOs in January. Market participants shrugged off the commerce ministry’s data showing that the country’s exports grew marginally by 0.34% to $27.93 billion in December 2018 on account of negative growth in sectors such as engineering and gems & jewellery. Besides, imports dipped by 2.44% to $41 billion during the last month due to lesser imports of gold, pearls, precious and semi- precious stones. India’s trade deficit narrowed to $13.08 billion in December, the lowest in 10 months, as compared with $16.7 billion in November, due to a fall in gold imports.

On the global front, Asian markets are trading mostly in red on Wednesday with investors assessing Brexit options after British lawmakers trounced Prime Minister Theresa May’s deal to pull out Britain from the European Union. The US markets ended in green on Tuesday as investors welcomed China’s pledge to stimulate the country’s ailing economy coupled with the rally in technology companies stocks.

Back home, stocks related to steel sector remained in focus with report that the government is considering raising import duty on iron ore, a key raw material used in steel making, with a view to protecting the domestic industry. The low import duty of 2.5% encourages steel players to go for import rather than utilising the local ore. Real estate sector stocks too remained buzzing with report that a ministerial panel headed by Gujarat Deputy Chief Minister Nitin Patel will look into the possibility of rationalisation of GST rate in real estate sector besides formulating a composition scheme.

The BSE Sensex is currently trading at 36434.41, up by 116.08 points or 0.32% after trading in a range of 36347.57 and 36462.03. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.54%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Utilities up by 1.09%, Telecom up by 1.05%, Power up by 1.03%, PSU up by 0.91% and Energy was up by 0.84%, while FMCG down by 0.35% was the lone losing index on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.69%, Axis Bank up by 1.41%, Tata Motors - DVR up by 1.37%, Bharti Airtel up by 1.23% and ICICI Bank up by 1.17%. On the flip side, ITC down by 0.64%, TCS down by 0.47%, Sun Pharma down by 0.41%, Hero MotoCorp down by 0.38% and Kotak Mahindra Bank down by 0.37% were the top losers.

Meanwhile, in a bid to increase liquidity in the market, the Reserve Bank of India (RBI) has said that it will inject Rs 10,000 crore into the system through purchase of government securities on January 17, 2019. The purchase will be made through open market operations (OMOs).

The Central Bank stated that based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of government securities under OMOs for an aggregate amount of Rs 100 billion on January 17, 2019.

The eligible participants should submit their offers in electronic format on the RBI Core Banking Solution (E-Kuber) system on January 17. The result of the auction will be announced on the same day and payment to successful participants will be made on the following day.

Besides, the Central Bank plans to inject liquidity under OMOs for Rs 50,000 crore in January 2019. So far, the central bank has injected Rs 20,000 crore into the system through OMOs in January.

The CNX Nifty is currently trading at 10913.00, up by 26.20 points or 0.24% after trading in a range of 10893.75 and 10928.15. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 2.53%, Grasim Industries up by 2.18%, Zee Entertainment up by 1.97%, Indusind Bank up by 1.76% and Bharti Airtel up by 1.41%. On the flip side, UPL down by 1.79%, Tech Mahindra down by 1.10%, TCS down by 0.83%, Adani Ports & SEZ down by 0.64% and Bajaj Finance down by 0.61% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 133.50 points or 0.65% to 20,421.79, Hang Seng dipped 66.71 points or 0.25% to 26,763.58, Taiwan Weighted slipped 24.32 points or 0.25% to 9,781.72 and Shanghai Composite was down by 1.46 points or 0.06% to 2,568.88.

On the flip side, Straits Times rose 4.72 points or 0.15% to 3,217.02, KOSPI slipped 5.52 points or 0.26% to 2,102.70 and Jakarta Composite was down by 13.93 points or 0.22% to 6,422.71.