Local equities trim losses to trade flat

Local equity benchmarks trimmed most of their losses to trade flat in the morning deals. Traders were seen piling positions in Auto, Realty and Oil & Gas sector while selling was witnessed in Consumer Durables and BANKEX sector stocks. Investors take note of the Reserve Bank of India’s report which stated that the Monetary Policy Committee has noted the ‘weakened growth momentum’ amidst inflation cooling off to lower the key policy rates to create a ‘congenial environment’ for growth as the reasons for the surprise rate cut earlier this month. Some solace also came with Niti Aayog’s report that the host of reforms undertaken by the government has transformed India into the fastest-growing major economy along with the macroeconomic stability not witnessed in the past. However, some cautiousness also remained on the streets with Moody’s statement that the fresh round recapitalisation of 12 state-run banks is positive as it will help them improve their core capital but a complete turnaround is still away due to the large quantum of legacy bad loans. It said these banks are far from a complete turnaround as large volumes of problem-loans will still continue to cap improvements in profitability and capitalisation, constraining their credit profiles.

On the global front, Asian market were trading mostly in red; tracking losses on Wall Street as optimism over the China-US trade talks was trumped by a weak round of US data that revived concerns about economic growth. Back home, a report stated that Employees’ Provident Fund Organisation (EPFO) has increased the interest rate on provident fund (PF) deposits to 8.65 percent for the 2018-19 fiscal year as against 8.55 percent in the preceding year.

The BSE Sensex is currently trading at 35890.85, down by 7.50 points or 0.02% after trading in a range of 35795.79 and 35938.52. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.39%, while Small cap index was up by 0.61%.

The gaining sectoral indices on the BSE were Auto up by 1.32%, Realty up by 1.13%, Oil & Gas up by 0.97%, Telecom up by 0.82% and PSU was up by 0.65%, while Consumer Durables down by 0.35% and BANKEX was down by 0.33% were the only losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 1.70%, Maruti Suzuki up by 1.64%, Vedanta up by 1.61%, Mahindra & Mahindra up by 1.53% and Hero MotoCorp was up by 1.28%. On the flip side, Kotak Mahindra Bank down by 3.50%, Reliance Industries down by 0.45%, Asian Paints down by 0.41%, HDFC down by 0.39% and ITC was down by 0.36% were the top losers.

Meanwhile, the Niti Aayog in its note stated that the government’s reform initiatives have transformed India into the fastest-growing major economy in the world along with the macroeconomic stability not witnessed in the past. The note highlighted the India’s growth has decisively increased over the last five years and is much higher than the average growth among the emerging and developing economies.

It mentioned that over the last five years (2014-18), the India economy has recovered and currently is going through one of its best-ever phases of economic growth combined with the microeconomic stability. As per note,  in the current financial year (FY19), it is expected that India's growth  will be 7.2%, with the growth in preceding three years being 8%, 8.2% and 7.2%,  against the world GDP growth would be 3.7% and median of seven emerging market economies (Brazil, China, Indonesia, Philippines, Russia, South Africa and Turkey) is 3.5%.

The closest to India is China, which is estimated to grow at 6.6% in FY19. Moreover, it added that the uptick in economic growth has come from various economic reforms undertaken by the government such as improvement in ease of doing business, opening up to foreign direct investments, the push for infrastructure development and a stable and decisive policy environment.

The CNX Nifty is currently trading at 10793.90, up by 4.05 points or 0.04% after trading in a range of 10758.40 and 10798.95. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 2.90%, Indiabulls Housing Finance up by 2.89%, HPCL up by 2.38%, BPCL up by 2.06% and Vedanta was up by 1.58%. On the flip side, Kotak Mahindra Bank down by 3.81%, JSW Steel down by 1.10%, Cipla down by 0.88%, Hindalco down by 0.72% and Titan Company was down by 0.63% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 74.55 points or 0.26% to 28,555.37, Nikkei 225 slipped 57.66 points or 0.27% to 21,406.57, Taiwan Weighted dropped 19.26 points or 0.19% to 10,300.27, KOSPI fell 6.07 points or 0.27% to 2,222.59, Straits Times trembled 13.91 points or 0.42% to 3,264.00 and Jakarta Composite was down by 52.69 points or 0.81% to 6,485.08. On the other side, Shanghai Composite was up by 0.93 points or 0.03% to 2,752.73.