Indian equities hold on to gains in afternoon session

Indian equity benchmarks held on to gains in afternoon session on the back of positive macroeconomic data and better-than-expected earnings by some blue-chip companies, amid positive global cues. The Central Statistics Office’s (CSO) data showed that India's Consumer Price Index (CPI)-based inflation for the month of January 2019 eased to a 19-month low at 2.05% over the previous month on continued decline in food prices, including vegetables and eggs, while industrial production in December 2018 bounced back to 2.4% after sliding to a 17-month low in November. Some support also came with Finance Minister Piyush Goyal’s statement that now individuals earning up to Rs 9.5 lakh can escape liability by taking advantage of saving schemes. The Minister said he did not propose any change in the tax rate but only provided few rebates which will boost spending and help the economy. In the currency front, easing retail inflation gave a fillip to the rupee too, which is trading higher by 14 paise at 70.56 per dollar versus previous close 70.70.

The broader indices were trading in green; the BSE Mid cap index rose 0.20%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were Realty up by 1.05%, FMCG up by 0.56%, Utilities up by 0.55%, Basic Materials up by 0.31% and IT up by 0.31%, while Consumer Durables down by 0.59%, Telecom down by 0.56%, PSU down by 0.50%, Healthcare down by 0.46% and Auto down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.65%, Tata Motors up by 1.45%, Tata Motors - DVR up by 1.12%, HDFC up by 1.02% and HDFC Bank up by 0.72%. On the flip side, Hero MotoCorp down by 1.87%, SBI down by 1.16%, Bajaj Finance down by 1.09%, Mahindra & Mahindra down by 0.83% and NTPC down by 0.68% were the top losers.

Meanwhile, Credit rating agency Care Ratings in its latest report has said that corporate bond issuance fell 13 percent to Rs 4 lakh crore in the April-December period of fiscal year 2018-19, on the back of higher cost of borrowings amid liquidity challenges in the Non-banking finance companies (NBFC) segment as well as limited pick up in investments. It also noted that NBFCs have witnessed higher cost of borrowings post-August 2018 across all the rating categories--AAA, AA+, AA, and AA--.

According to the report, the cost of borrowing through debt for AAA-rated NBFCs and non-NBFCs has come down from the levels seen in November 2018. It declined by 28 basis points for NBFCs, 109 bps for housing finance companies (HFCs), 20 bps for all-India financial institutions (AIFs), and 33 bps for non-NBFCs. Besides, the report indicated that although the cost of borrowing has declined between November 2018 and January 2019, there has been an increase in borrowing costs for AIFs and non-NBFCs during December 2018- January 2018. it has increased by 14 bps and 2 bps during the period.

The rating agency further said that interest rates in corporate bond market were more competitive than bank loans but only in the case of AAA category. It also said that all the other categories largely faced higher borrowing costs compared with bank loans. It pointed out that NBFCs continued to face higher cost of borrowings compared with AIFs, HFCs and non-NBFCs across all the rating categories.  Besides,  it said that going forward, there could be some relief provided to companies raising money from the bond market in the form of lower borrowing costs with the RBI reducing the repo rate by 25 basis points to 6.25 percent and also changing the policy stance to 'neutral' from the earlier 'calibrated tightening'.

The CNX Nifty is currently trading at 10855.50, up by 24.10 points or 0.22% after trading in a range of 10837.10 and 10891.65. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Adani Ports &SEZ up by 5.51%, Indiabulls Housing finance up by 2.84%, UPL up by 2.57%, ITC up by 1.69% and HDFC up by 1.24%. On the flip side, HPCL down by 2.88%, BPCL down by 2.58%, Bharti Infratel down by 2.49%, Hero MotoCorp down by 2.00% and Eicher Motors down by 1.95% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 280.27 points or 1.34% to 21,144.48, Hang Seng increased 332.32 points or 1.18% to 28,503.65, Straits Times advanced 39.29 points or 1.23% to 3,240.44, Shanghai Composite gained 51.35 points or 1.92% to 2,723.24, Jakarta Composite soared 7.70 points or 0.12% to 6,434.03 and KOSPI rose 11.01 points or 0.5% to 2,201.48.

On the flip side, Taiwan Weighted was down by 7.16 points or 0.07% to 10,090.58.