Indian bourses trade marginally higher in afternoon deals

Indian equity indices, altering between positive and negative territory, were now trading marginally higher in afternoon session, as Realty, Energy, FMCG and IT shares witnessed buying, following positive cues from global markets. Traders took some support with Crisil Ratings’ report showing that India's growth rate is likely to inch up to 7.3 percent in 2019-20, provided that there are normal rains and a stable political outcome of the general elections. It added that India is expected to clock a growth rate of 7.2 percent in the current financial year, up from 6.7 percent in 2017-18. Traders also took a note that Union Minister Nirmala Sitharaman termed the NDA government’s 2017 rollout of the Goods and Services Tax (GST) as the ‘biggest reform’ taken as part of a ‘systemic reform’ and pitched India as a bright spot for investors. However, gains were limited with a report that the goods and services tax (GST) collected in January (for December) is seen to be the lowest in the current fiscal. While the average collections during April-December were Rs 96,800 crore a month, the collections in January are around Rs 93,000 crore. On the sectoral front, steel sector stocks were in focus after the Union Minister of State for Steel and Mines, Vishnudeo Sai said that India Steel Conference and Exhibition has been making new strides in contributing to the growth of the Indian steel sector. He also said that Indian steel sector has entered a new phase of development and the demand for steel will continue to grow.

On the global front, Asian markets were trading mostly in green, as positive US earnings reports reassured investors that the world’s largest economy was on track. Back home, the BSE Sensex is currently trading at 36137.31, up by 28.84 points or 0.08% after trading in a range of 35996.68 and 36225.51. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.12%, while Small cap index was down by 0.33%.

The top gaining sectoral indices on the BSE were Realty up by 2.16%, Energy up by 0.82%, FMCG up by 0.30%, IT up by 0.29% and TECK up by 0.10%, while Telecom down by 1.64%, Industrials down by 0.69%, Basic Materials down by 0.58%, Capital Goods down by 0.50% and Auto down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.31%, ITC up by 0.94%, TCS up by 0.81%, Asian Paints up by 0.71% and SBI up by 0.47%. On the flip side, Tata Motors - DVR down by 2.93%, Tata Motors down by 2.80%, Yes Bank down by 1.57%, Bharti Airtel down by 1.50% and ICICI Bank down by 1.01% were the top losers.

Meanwhile, in order to attract a larger number of global players in the single-brand retail sector, the government is mulling measures to relax the mandatory 30 percent local sourcing norms by allowing them more time to comply with the regulations. Big single-brand retail firms may also be allowed to open online stores before setting up brick-and-mortar shops. Presently, online sale by a single-brand retail player is allowed only after opening of physical outlet.

According to a proposal under active consideration of the government, single-brand foreign retailers may be allowed to adjust the incremental sourcing of goods from India for global operations during the initial 10 years from the current five years (beginning April 1 of the year of the opening of first store) against the mandatory sourcing requirement of 30 per cent of purchases from India. However, the relation would be subject to a condition that a foreign entity would have to bring foreign direct investment (FDI) in excess of $200 million within the first 2-3 years. The proposal requires union cabinet’s approval for implementation.

In January 2018, the government allowed 100 per cent FDI in single brand retail under the automatic route, permitting foreign players in the sector to set up their own shops in India, without government approval. That time, the government has also relaxed the mandatory local sourcing requirement of 30 per cent. Under the relaxed norms, a foreign retailer will be able to get credit from incremental increase in sourcing for its global operations from India, towards the mandatory 30 per cent local sourcing requirement, for its business in the country. During the April-June quarter of 2018-19, FDI in India grew by 23 percent to $12.75 billion.

The CNX Nifty is currently trading at 10835.80, up by 4.30 points or 0.04% after trading in a range of 10798.65 and 10858.40. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.34%, ITC up by 1.30%, TCS up by 1.01%, Dr. Reddys Lab up by 0.78% and Titan up by 0.74%. On the flip side, Tata Motors down by 2.86%, UPL down by 2.04%, Yes Bank down by 1.60%, Bharti Infratel down by 1.34% and Ultratech Cement down by 1.32% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 82.14 points or 0.3% to 27,090.34, KOSPI rose 17.25 points or 0.81% to 2,145.03, Jakarta Composite soared 16.87 points or 0.26% to 6,468.04, Taiwan Weighted strengthened 30.72 points or 0.31% to 9,877.12, Shanghai Composite gained 11.28 points or 0.44% to 2,592.28 and Straits Times advanced 13.82 points or 0.44% to 3,184.93.

On the flip side, Nikkei 225 was down by 19.09 points or 0.09% to 20,574.63.