Local equities extend gains in morning deals

Local equity benchmarks added gains to continue firm trade in the morning session on account of buying in front line counters, ahead of interim budget 2019. Buoyant Mid-caps and Small-caps also elevated over half a percent gains on their respective front line stocks. Sentiment remained largely positive with Central Statistics Office (CSO) reported that the GDP growth was 7.4 per cent in 2014-15 and 8 per cent in 2015-16. The CSO has estimated the Indian economy to expand at the rate of 8.2 per cent in the fiscal ending March 2019. Traders remain energized with a private report stating that India’s economy expanded at a much faster rate than initially estimated in the last two fiscal years. The report also showed that growth remained high despite disruptions from demonetization and the rollout of goods and services tax. Traders also took support with a private report stating that India is likely to raise its rural welfare spending by 16 percent for the fiscal year beginning April. As Prime Minister Narendra Modi tries to woo the farm vote ahead of a general election due by May this year.

On the global front, Asian markets were trading in mostly in green despite trade talks ended in Washington with no deal but the promise of a second meeting between US President Donald Trump and Chinese leader Xi Jinping. Back home, a report stated that the government has revised the GDP growth for FY17 by 110 basis points from 7.1 per cent earlier to 8.2 per cent and for FY18 from 6.7 per cent earlier to 7.2 per cent.

The BSE Sensex is currently trading at 36418.69, up by 162.00 points or 0.45% after trading in a range of 36261.95 and 36448.30. 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 0.59%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Realty up by 1.60%, Auto up by 1.52%, Capital Goods up by 1.10%, Consumer Disc up by 1.06% and FMCG was up by 1.01%, while Metal down by 3.95%, Basic Materials down by 1.47%, Consumer Durables down by 0.14%, Oil & Gas down by 0.09%, Utilities was down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.88%, HCL Tech. up by 2.31%, Maruti Suzuki up by 1.76%, Hero MotoCorp up by 1.61% and Bajaj Finance was up by 1.60%. On the flip side, Vedanta down by 17.11%, Sun Pharma down by 1.20%, ONGC down by 0.81%, Power Grid down by 0.74% and Yes Bank was down by 0.49% were the top losers.

Meanwhile, Fitch Ratings has warned of a second consecutive year of fiscal slippage if government goes for populist interim budget 2019. The interim budget to be presented on February 01 could give some indication of the government's commitment to fiscal consolidation, which is one of the main sensitivities in the sovereign ratings. Fitch stated that populist spending will aggravate fiscal pressures, which are already building on account of revenue shortfalls.

It further mentioned that higher pre-election spending could risk a second consecutive year of fiscal slippage relative to the government's targets and would further delay plans to reduce the high general government fiscal deficit and debt burden. It added that longer-term trends are more important to the sovereign rating profile.

Besides, it believes the central government may still be able to meet its fiscal deficit target of 3.3 per cent of GDP for FY19, which will help support its fiscal credibility, although this may be achieved by deferring capital expenditure and postponing bill payments until after March.

The CNX Nifty is currently trading at 10875.20, up by 44.25 points or 0.41% after trading in a range of 10835.85 and 10888.05. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.06%, Maruti Suzuki up by 2.89%, Bharti Airtel up by 2.58%, Eicher Motors up by 2.36% and HCL Tech was up by 2.29%. On the flip side, Vedanta down by 16.90%, JSW Steel down by 2.44%, GAIL India down by 0.98%, Grasim Industries down by 0.91% and Power Grid was down by 0.85% were the top losers.

Asian markets were trading in mostly in green, KOSPI rose 1.10 points or 0.05% to 2,205.95, Jakarta Composite soared 18.09 points or 0.28% to 6,551.06, Shanghai Composite gained 20.00 points or 0.77% to 2,604.57, Straits Times advanced 9.10 points or 0.29% to 3,199.27 and Nikkei 225 was up by 7.00 points or 0.03% to 20,780.49. On the other hand, Hang Seng was down by 87.68 points or 0.31% to 27,854.79.