Markets trim gains; continue to trade in green

The local equity benchmarks trimmed their gains in late afternoon session and continue to trade above the neutral lines. The Budget provides a boost to the primary engine of growth i.e. domestic consumption through income tax sops for nearly 30 million low-income taxpayers and 120 million marginal farmers. This would go down in history as India's seminal march towards providing succor to the economically disadvantaged groups. Sentiments were positive as the finance ministry allocated the highest ever budgetary support of Rs 83,016 crore to the highways sector under the interim budget for 2019-20. The amount was up by 5.58 percent against the previous year’s budgetary allocation of Rs 78,625.5 crore (revised estimate). The allocation made by the government is the expected estimates for the year, a full year and exact budget for 2019-20 would be presented by the new government in June-July. Meanwhile, Anti-black money measures including demonetization have led to discovery of undisclosed income of Rs 1.30 lakh crore and seizure of Rs 50,000 crore.

On the global front, European markets were trading in green, as eurozone's economy maintained its growth momentum in the fourth quarter of 2018, and the monthly unemployment rate remained unchanged in December. The Gross domestic product grew 0.2 percent from the third quarter, when the economy expanded at the same pace. The growth rate was in line with street’s expectations. Asian markets were trading mixed, as investors treading carefully as China-US trade talks ended with no deal but with both sides sounding notes of optimism and setting up more high-level meetings later this month.

The BSE Sensex is currently trading at 36285.72, up by 29.03 points or 0.08% after trading in a range of 36261.95 and 36778.14. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.03%, while Small cap index was down by 0.09%.

The top gaining sectoral indices on the BSE were Auto up by 1.96%, Realty up by 1.25%, Consumer Disc up by 1.22%, FMCG up by 0.64% and Capital Goods was up by 0.60%, while Metal down by 4.31%, Basic Materials down by 2.23%, Bankex down by 1.53%, PSU down by 1.40%, Oil & Gas was down by 0.50% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 6.38%, Maruti Suzuki up by 4.52%, HCL Tech up by 2.70%, Asian Paints up by 2.24% and Hindustan Unilever was up by 1.83%. On the flip side, Vedanta down by 17.82%, Yes Bank down by 4.55%, ICICI Bank down by 3.68%, SBI down by 3.31% and Axis Bank was down by 1.80% were the top losers.

Meanwhile, after showing slow growth in the previous month, the Indian manufacturing sector surged in the month of January, with the quickest increase in order books. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - rose to 53.9 in January from 53.2 in December. The manufacturing sector activity expanded for the 18th consecutive month as the PMI reading stood above the watershed 50 mark, which differentiates growth from contraction.

According to the report, sales growth picked up in January, on the back of successful advertising campaigns, favorable economic conditions and strengthening demand. Intermediate goods makers noted the strongest increases in both new work and production compared to their consumer and investment goods counterparts. Employment also continued to expand in January for the tenth straight month, as firms adjusted capacities due to marked growth of new work.

On the inflation front, firms paid higher prices for paper, textiles, steel and synthetic rubber, while lower charges paid for aluminium, copper, oil and plastic. Subsequently, overall cost burdens rose only modestly and at a rate that was muted by historical standards. Similarly, a slight increase in factory gate charges was registered. Meanwhile, the level of business sentiment in India’s manufacturing industry improved to a five-month high in January.

The CNX Nifty is currently trading at 10842.05, up by 11.10 points or 0.10% after trading in a range of 10813.45 and 10983.45. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 6.28%, Maruti Suzuki up by 4.16%, Eicher Motors up by 3.07%, HCL Tech up by 2.76% and Asian Paints was up by 2.18%. On the flip side, Vedanta down by 18.01%, Zee Entertainment down by 5.85%, Yes Bank down by 5.13%, ICICI Bank down by 3.46% and SBI was down by 3.34% were the top losers.

Asian markets were trading mixed; Hang Seng decreased 11.73 points or 0.04% to 27,930.74, Straits Times trembled 5.32 points or 0.17% to 3,184.85, Jakarta Composite dropped 9.19 points or 0.14% to 6,523.78 and KOSPI was down by 1.39 points or 0.06% to 2,203.46. On the other hand, Shanghai Composite gained 33.66 points or 1.3% to 2,618.23 and Nikkei 225 was up by 14.90 points or 0.07% to 20,788.39.

All European markets were trading in green; UK’s FTSE 100 increased 23.82 points or 0.34% to 6,992.67, France’s CAC increased 7.08 points or 0.14% to 4,999.80 and Germany’s DAX was up by 25.81 points or 0.23% to 11,198.91.