Indian bourses trade in green in afternoon deals

In an extremely choppy session, the local barometer gauges were trading marginally higher in afternoon session, as Consumer Durables, Auto and banking shares witnessed buying. Traders took some support with SBI Research report stating that the Reserve Bank may cut key lending rate by 0.25 per cent later this week in view of benign inflation. The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das will start its three-day meet on February 7. Besides, recovery in the rupee value against dollar along with encouraging earnings by some blue-chip firms too supported the markets. However, gains were limited as anxiety remained among the local traders with Moody's Investors Service’s statement that fiscal slippage from the budgeted targets for the past two consecutive years and tax cuts and spending ahead of the general elections, is credit negative for India. Meanwhile, government sought Parliament's nod for gross additional expenditure of Rs 1,98,831.36 crore during the current fiscal ending March.

The BSE Sensex is currently trading at 36667.04, up by 84.30 points or 0.23% after trading in a range of 36495.83 and 36687.78. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.02%, while Small cap index was down by 0.20%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.01%, Auto up by 0.97%, Bankex up by 0.55%, Consumer Discretionary Goods & Services up by 0.53% and Utilities up by 0.42%, while Telecom down by 1.18%, Realty down by 0.62%, TECK down by 0.17%, IT down by 0.09% and Industrials down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.98%, Mahindra & Mahindra up by 2.33%, Bajaj Auto up by 2.16%, Hero MotoCorp up by 2.08% and Hindustan Unilever up by 1.49%. On the flip side, Tata Motors down by 1.86%, Tata Motors - DVR down by 1.72%, Coal India down by 1.24%, Bharti Airtel down by 0.75% and ITC down by 0.51% were the top losers.

Meanwhile, Fitch Group’s research arm - Fitch Solutions in a note titled 'India's Populist FY2019-20 Budget To Delay Fiscal Consolidation' has projected the government's fiscal deficit to exceed the budgeted target by 0.2 percent to 3.6 percent of Gross domestic product (GDP) in the financial year 2020. It said “we believe that expenditure growth will exceed the government's projections, giving our expectation for high election spending and the budget speech's repeated emphasis that 'if necessary, additional funds will be provided'.

Additionally, it said that the government's revenue growth projections also appear too positive given its sweeping tax rebates for the middle class and small business. It also said that the central government plans to spend a total of Rs 27.8 lakh crore in fiscal 2019-20, a 13.3 percent rise over the 2018-19 revised budget estimates. It believed that continued fiscal stimulus by the central government will see the government miss its goal of reducing its fiscal deficit to 3 percent of GDP by FY20-21.

Fitch Group arm further said that although agriculture, rural development and transport infrastructure remain the largest expenditure areas, the budget speech focused heavily on agriculture, social welfare, education, and healthcare, likely aimed at appealing to members of scheduled castes and scheduled tribes, which form 25 percent of the total population, and farmers, which account for 58 percent of India's labour force. It also indicated that agriculture spending as a proportion of total expenditures grew to 5.4 percent in 2019-20, from 3.5 percent in the 2018-19 revised budget estimates, which suggests a populist shift in the government's expenditure patterns.

The CNX Nifty is currently trading at 10940.15, up by 27.90 points or 0.26% after trading in a range of 10886.70 and 10948.65. There were 32 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.51%, Titan Co up by 3.11%, Indusind Bank up by 2.77%, Mahindra & Mahindra up by 2.42% and Bajaj Auto up by 2.30%. On the flip side, Tata Motors down by 1.83%, Bharti Infratel down by 1.71%, Coal India down by 1.26%, Indian Oil Corp. down by 0.77% and Indiabulls Housing Finance down by 0.75% were the top losers.

Most of the Asian markets were closed on account of Lunar New Year holiday. Nikkei 225 slipped 39.32 points or 0.19% to 20,844.45