Local bourses remain buoyant in early noon deals

The benchmark equity indices continued to trade higher in early noon session, on sustained buying by participants, with Sensex rising over 395 points and Nifty comfortably trading above crucial 10750 mark. Buying in frontline blue chip stocks such as Infosys, Reliance Industries, Hindustan Unilever and Axis Bank were aiding sentiment. Sentiment remained positive ahead of the Interim Budget on February 1. The Interim Budget would provide an opportunity for the government to outline its medium-term economic priorities, specifically with regards to improving farm/rural incomes. Some support also came with SBI Research latest report stating that the government is likely to meet the fiscal deficit target this year and pegged fiscal deficit at Rs 6.72 trillion or 3.2% of gross domestic product (GDP) for next fiscal year (2019-20), assuming a moderate nominal GDP growth of 11.7%. It added that the fiscal gap will be met at the budgeted 3.3 percent for FY19. The strength in the markets was being supported as the central government has made tremendous progress in production of energy in the last five years. Presently, extra one lakh MW power is being produced. It is more than our requirement; hence India has started exporting energy to neighbouring countries. Traders took note of report that Indian companies’ foreign borrowing nearly trebled to $3.81 billion in December 2018 as compared to the same period last year. According to data from the Reserve Bank of India (RBI), of the total borrowing amount in December, $3.77 billion was mobilized through external commercial borrowings (ECBs) in the overseas markets, while $37.04 million was through rupee-denominated bonds (RDBs).

On the global front, Asian markets were trading in green, after the Federal Reserve pledged to be patient with further interest rate hikes, signaling a potential end to its tightening cycle amid signs of slowing global growth. Back on street, Bajaj Holdings and Investment gained on reporting a rise of 10.96% in its net profit at Rs 60.52 crore for the quarter under review as compared to Rs 54.54 crore for the same quarter in the previous year. Besides, BHEL edged up on bagging orders for primary side heat exchangers from NPCIL.

The BSE Sensex is currently trading at 35985.95, up by 394.70 points or 1.11% after trading in a range of 35740.07 and 35986.14. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index lost 0.06%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Energy up by 1.75%, IT up by 1.67%, TECK up by 1.34%, Oil & Gas up by 1.24% and Bankex was up by 0.94%, while there were no losing indices on BSE sectoral front.

The top gainers on the Sensex were Infosys up by 2.85%, Reliance Industries up by 2.32%, Hindustan Unilever up by 2.13%, Axis Bank up by 1.95% and Indusind Bank was up by 1.80%. On the flip side, Yes Bank down by 2.46%, HCL Tech down by 1.38%, Hero MotoCorp down by 0.91% and Bajaj Finance was down by 0.80% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that Indian textile sector is likely to witness higher growth on the back of robust domestic demand and falling rupee value against dollar. It has maintained a stable outlook for the sector for 2019-20 following strong domestic demand, fading impact of the disruptions due to GST and note ban and rising exports aided by a weak rupee.

According to the report, the textile companies are likely to improve cash-flow from operations for FY20, as their working capital would stabilise as challenges related to demonetisation and the GST subside. It also said that the sector is likely to continue deleveraging gradually in FY20 in view of strong annual growth generation and some moderation in the debt level. It also noted that the liquidity of the majority of players in the sector is likely to remain adequate, along with an improvement in operational cash generation, backed by steady raw material costs and strong demand from end-user segments.

The ratings agency further said that the India's textile exporters are likely to continue to benefit from improved cost competitiveness because of weak rupee, which would drive volume growth. It highlighted that over the first nine-month of FY19, the Indian rupee depreciated at a higher rate against the US dollar than the currencies of key apparel-exporting countries like Vietnam and Bangladesh. Besides, it noted that India's apparel exports also showed signs of recovery in Q3 (October-December) of FY19 and are likely to increase in FY20 after remaining weak for three years.

The CNX Nifty is currently trading at 10753.90, up by 102.10 points or 0.96% after trading in a range of 10678.55 and 10754.55. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.11%, GAIL India up by 2.46%, Tech Mahindra up by 2.29%, Reliance Industries up by 2.20% and Hindustan Unilever was up by 2.04%. On the flip side, Zee Entertainment down by 4.62%, Yes Bank down by 2.28%, Bajaj Finserv down by 2.15%, HCL Tech down by 2.02% and Adani Ports &Special was down by 1.86% were the top losers.

All Asian markets were trading in green, Hang Seng increased 295.65 points or 1.07% to 27,938.50, KOSPI rose 5.76 points or 0.26% to 2,211.96, Jakarta Composite soared 57.91 points or 0.90% to 6,522.10, Shanghai Composite gained 11.17 points or 0.43% to 2,586.75, Straits Times advanced 11.89 points or 0.37% to 3,186.27 and Nikkei 225 was up by 210.35 points or 1.02% to 20,766.89.