Local equities trim initial gains to continue firm trade

Local equity benchmarks pared some of their initial gains to continue firm trade in morning deals, with Sensex and Nifty gaining over 150 and 50 points, respectively. Some concerns came with a private report stating that the Indian rupee is set to underperform against the dollar again this year, weighed down by uncertainty ahead of a national election in May, but is unlikely to retest life-time lows. However, positivity remained on the streets as traders were getting support with a report stating that the income tax e-returns filed for the April-January period has grown by over 37 percent compared with the corresponding period in FY18. While over 6.3 crore taxpayers filed returns in the first ten months of the fiscal, the government is expecting 7.6 crore returns to be filed by the end of FY19 compared with 6.9 crore in FY18. Traders took note of International Monetary Fund (IMF) statement that greater efforts will be needed to reduce the fiscal deficit as the interim budget envisages a slower pace of fiscal consolidation than previously planned.

On the global front, Asian stock markets were trading higher, following the positive cues overnight from Wall Street. However, trading volume remained thin as several markets in the region remain closed for the Lunar New Year holiday. Back home, the banking stocks were trading in green, despite a report stated that around Rs 3.5 lakh crore or 3.9 percent of the stressed corporate loans continue to remain unrecognized on the books of banks and nearly 40 percent of them may become dud assets by September 2020.

The BSE Sensex is currently trading at 36783.57, up by 166.76 points or 0.46% after trading in a range of 36680.88 and 36894.25. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.94%, while Small cap index was down by 0.72%.

The top gaining sectoral indices on the BSE were IT up by 1.39%, TECK up by 1.36%, Energy up by 0.72%, Oil & Gas up by 0.48% and BANKEX was up by 0.21%, while Realty down by 1.16%, Power down by 0.97%, Consumer Durables down by 0.93%, Telecom down by 0.83% and Utilities was down by 0.79% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.36%, Infosys up by 1.31%, HCL Tech up by 1.27%, ONGC up by 1.05% and Bajaj Finance was up by 1.05%. On the flip side, Vedanta down by 2.12%, IndusInd Bank down by 1.37%, Tata Motors down by 1.34%, NTPC down by 1.30% and Bharti Airtel was down by 1.27% were the top losers.

Meanwhile, in order to reduce the India's fiscal deficit, the International Monetary Fund (IMF) has said that greater efforts will be required as the interim budget envisages a slower pace of fiscal consolidation than previously planned. Ranil Salgado, IMF mission chief for India, stated ‘the interim budget envisages a slower pace of fiscal consolidation than previously planned, delaying the time to reach the medium-term central-government debt target of 40 percent of GDP’.

Salgado said in order to ensure that the debt target is met by 2025, there will be requirement of greater efforts. He added in that regard, further steps to increase GST compliance will be critical to reach budgeted revenue goals.

Besides, government data showed that Fiscal deficit, or gap between Government's expenditure and revenue, touched 112.4 per cent of the full-year budget target of Rs 6.24 lakh crore at the end of December due to lower revenue collections. The fiscal deficit, stood at Rs 7.01 lakh crore during April-December of the current financial year (FY19) which ends in March.

The CNX Nifty is currently trading at 10985.05, up by 50.70 points or 0.46% after trading in a range of 10962.70 and 11018.60. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 6.91%, Tech Mahindra up by 5.98%, Grasim Industries up by 1.71%, HPCL up by 1.44% and ICICI Bank was up by 1.33%. On the flip side, Adani Ports & SEZ down by 2.44%, Vedanta down by 2.21%, IndusInd Bank down by 1.81%, Bharti Airtel down by 1.51% and Tata Motors was down by 1.42% were the top losers.

Several markets in Asia are closed for the Lunar New Year holiday. Jakarta Composite soared 61.67 points or 0.95% to 6,543.12 and Nikkei 225 was up by 40.11 points or 0.19% to 20,884.56.