Local equities trim early gains

Local equity benchmarks trimmed some of their early gains to continue trading in green in morning session. Nifty barometer Nifty50 was testing 10,900-level and Sensex trading just 0.14% higher. FMCG, Metal and IT counters witnessed notable losses, while PSU, Oil & Gas and Power sectors edged higher. Sentiment on the street weakened as merchandise export growth slowed for a second straight month to just 0.34% in December 2018, while imports contracted by 2.44%, the first drop since September 2016, narrowing trade deficit to $13.1 billion, its lowest since February 2018. But, markets drew some solace with a private report that India’s partnership with Africa based on a consultative model of cooperation, non-prescriptive, participative, and responsive to the needs of the African countries, witnessed an increase in bilateral trade of nearly 22% from the last year. Market-men also took some support from the Reserve Bank of India’s (RBI) report 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).

On the global front, Asian markets were trading mixed, following the overnight gains on Wall Street and as investors digested news that the UK House of Commons has voted down Prime Minister Theresa May's Brexit deal, which adds more uncertainty about the UK's exit from the European Union. Back home, a private report state that as a multi-stage levy, the goods and services tax (GST) was supposed to make evasion difficult, but the figures for the first nine months of the current fiscal show either evasion has increased or its detection has become more efficient under the GST regime.

The BSE Sensex is currently trading at 36369.62, up by 51.29 points or 0.14% after trading in a range of 36347.57 and 36462.03. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.31%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Utilities up by 1.10%, PSU up by 0.92%, Power up by 0.87%, Oil & Gas up by 0.86% and Energy was up by 0.84%, while FMCG down by 0.73%, Metal down by 0.47% and IT was down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.53%, IndusInd Bank up by 1.48%, SBI up by 1.43%, NTPC up by 1.41% and Yes Bank was up by 1.13%. On the flip side, ITC down by 1.48%, Kotak Mahindra Bank down by 0.88%, Bajaj Finance down by 0.82%, HCL Tech down by 0.63% and Vedanta was down by 0.40% were the top losers.

Meanwhile, with an aim to make India among the top five air freight markets by 2025 and creating air transport shipment hubs at all major airports over the next six years, the government has unveiled its much-awaited national air cargo policy. The policy will encourage code sharing/inter-line agreements between foreign and Indian carriers. As per the policy, international cargo comprises 60% of the total air cargo tonnes handled in the country, logging a growth of 15.6% in the previous fiscal, while domestic cargo grew by over 8%, which reflects the skewed modal mix, in which roads account for over 60% of cargo transportation as compared to the global average of around 30%.

The policy document highlighted that Indian express industry is one of the fastest growing markets globally, but with a small share of about 2% of the global market.  The domestic express industry, a key constituent of the Indian express industry, is estimated to be worth Rs 17,000 crore. The international express is estimated to contribute Rs 5,000 crore to the Indian express industry. The potential in the new markets needs to be explored with long-term infrastructure creation in order to sustain cargo growth in the next 10-15 years at least.

The cargo policy also seeks to establish agreements between national carriers/ freighters and integrators to improve domestic connectivity as well as encourage the establishment of agreements between national and international carriers/freighters and other airline operators to provide access to key global cargo hubs. It also aims to promote the development of a last mile/first mile connectivity program at international/regional gateways.

Besides, as part of the security strategy under the policy, the strategy will address security related to the physical cargo, people handling the cargo, data and information related to shipments within and across all chains of custody transfers. To increase process transparency while decreasing shipment delays, costs and dwell time, a fully automated paperless trade environment with minimum face-to-face interactions will be implemented. Moreover, the policy covers all three categories of air cargo transport - domestic cargo to ensure efficient flow of goods across India; international cargo facilitating all indigenous export and import of goods; and transit international cargo by making India the transit cargo hub of choice to and from other parts of the globe.

The CNX Nifty is currently trading at 10900.30, up by 13.50 points or 0.12% after trading in a range of 10893.75 and 10928.15. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 2.95%, Grasim Industries up by 2.34%, GAIL India up by 1.83%, Zee Entertainment up by 1.82% and IndusInd Bank was up by 1.73%. On the flip side, UPL down by 2.44%, JSW Steel down by 1.39%, ITC down by 1.37%, Tech Mahindra down by 1.22% and Adani Ports was down by 1.10% were the top losers.

Asian markets were trading mixed; Nikkei 225 slipped 147.96 points or 0.72% to 20,407.33, Hang Seng decreased 59.92 points or 0.22% to 26,770.37, Taiwan Weighted dropped 30.64 points or 0.31% to 9,775.40 and Shanghai Composite declined 1.46 points or 0.06% to 2,568.88.

On the other hand, Straits Times advanced 4.94 points or 0.15% to 3,217.24, KOSPI rose 6.83 points or 0.33% to 2,104.01 and Jakarta Composite was up by 12.12 points or 0.19% to 6,420.90.