Bourses back in green; Telecom stocks ring louder

Key Indian equity benchmarks came back in the green terrain in late afternoon session, despite weak cues from European markets. Telecom index remained top gainer among sectoral indices, while Sun Pharma gained the most on the BSE. Trading sentiments got boost as Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) pegged the GDP growth for FY20 at 7.4 percent, up from the FY19 government estimate of 7.2 percent. With risks evenly balanced, RBI expects a GDP growth of 7.2-7.4 percent in H1 (April-September), and 7.5 per cent in Q3 (July-September). The market participants got comfort amid reports that the commerce ministry proposed several measures such as setting up of a separate fund, single-window e-marketplace and a law to define the role of various stakeholders, as part of the draft national logistics policy.

On the sectoral front, stocks related to the agri industry were buzzing, amid reports that the Cabinet Committee of Economic Affairs gave its approval for the creation of a corpus of Rs 2000 crore for Agri-Market Infrastructure Fund (AMIF) to be created with NABARD for development and up-gradation of agricultural marketing infrastructure in Gramin Agricultural Markets and Regulated Wholesale Markets. Further, mining and minerals sector stocks remained in limelight, after the Cabinet Committee of Economic Affairs approved the proposal for continuation of the Scheme of ‘Exploration of Coal and Lignite’ with an expected expenditure of Rs 1875 Crore.

On the global front, European markets were trading in red, as Germany's factory orders decreased for a second straight month in December and at a faster pace, defying expectations for a modest gain. The preliminary data from the Federal Statistical Office showed that manufacturing orders decreased a calendar and seasonally adjusted 1.6% from the previous month, while they were forecast to rise 0.3%. The latest fall was the most since June, when orders shrunk 3.6%. Asian markets were also trading in red, after US markets fell in thin trading overnight to snap a five-session winning streak.

The BSE Sensex is currently trading at 37096.08, up by 120.85 points or 0.33% after trading in a range of 36915.13 and 37172.18. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.99%, while Small cap index was up by 0.87%.

The top gaining sectoral indices on the BSE were Telecom up by 2.53%, Auto up by 1.90%, Healthcare up by 1.55%, Consumer Discretionary Goods & Services up by 1.06% and Basic Materials up by 0.76%, while Energy down by 0.49%, Utilities down by 0.18% and Metal down by 0.08% were the few losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 5.10%, Tata Motors up by 3.14%, Bajaj Auto up by 2.83%, Tata Motors - DVR up by 2.66% and Hero MotoCorp up by 2.19%. On the flip side, Reliance Industries down by 0.91%, Indusind Bank down by 0.68%, Vedanta down by 0.49%, Power Grid down by 0.43% and HDFC down by 0.43% were the top losers.

Meanwhile, the Reserve Bank of India (RBI), in its sixth bi-monthly monetary policy review of 2018-19, has reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.50% to 6.25% with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 6.00%, and the marginal standing facility (MSF) rate and the Bank Rate to 6.50%. The RBI also decided to change the monetary policy stance from calibrated tightening to neutral. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

On the inflation front, the Central Bank has lowered retail inflation (CPI) projection to 2.8% for Q4 FY19, 3.2-3.4% for H1FY20 and 3.9% for Q3FY20, with risks broadly balanced around the central trajectory, citing a normal monsoon in 2019. As per the Monetary Policy Committee (MPC), headline inflation is expected to remain soft in the near term reflecting the current low level of inflation and the benign food inflation outlook. Beyond the near term, some uncertainties warrant careful monitoring.

On the economic growth, RBI is expecting gross domestic product (GDP) growth of 7.4% in 2019-20, 7.2-7.4% in H1 and 7.5% in Q3 – with risks evenly balanced. However, the apex bank raised concerns that in spite of soft crude oil prices and the lagged impact of the recent depreciation of the Indian rupee on net exports, slowing global demand could pose headwinds and added that in particular, trade tensions and associated uncertainties appear to be moderating global growth.

The CNX Nifty is currently trading at 11096.95, up by 34.50 points or 0.31% after trading in a range of 11043.60 and 11118.10. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 4.80%, Bharti Infratel up by 3.78%, Eicher Motors up by 3.54%, Zee Entertainment up by 3.48% and Tata Motors up by 3.03%. On the flip side, JSW Steel down by 1.70%, Hindalco down by 1.21%, Reliance Industries down by 1.02%, Indusind Bank down by 0.85% and Tech Mahindra down by 0.85% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 122.78 points or 0.59% to 20,751.28, KOSPI fell 0.04 points to 2,203.42 and Jakarta Composite dropped 13.39 points or 0.2% to 6,534.49. On the flip side Straits Times was up by 19.82 points or 0.62% to 3,204.38.

European markets were trading mostly in red; France’s CAC fell 5.11 points or 0.10% to 5,073.94 and Germany’s DAX was down by 51.08 points or 0.45% to 11,273.64. On the flip side, UK’s FTSE 100 was up by 8.99 points or 0.13% to 7,182.08.