Local equities trade in positive zone

Local equity benchmarks continued their trade in positive zone in morning session, with Sensex and Nifty gaining more than 300 and 80 points, respectively. Capital Goods, Industrials and Auto counters were on the priority list of the buyers. Traders took note of Commerce and industry minister Suresh Prabhu’s statement that chemical exports from India will get a boost if more such products get subsidy and the process of environmental clearances become faster. Sentiments remained upbeat with a report that consumer market is expected to grow at 12 percent annually over the next decade and touch Rs 335 lakh crore. The consumer market was around Rs 110 lakh crore in 2018, clipping past 13 percent annually in the past decade when it stood at Rs 31 lakh crore in 2008. Traders overlooked Controller General of Accounts’ report that with slower-than-projected growth in tax receipts, the Centre’s fiscal deficit in the first ten months of the current fiscal stood at Rs 7.71 lakh crore or 121.5% of the full-year target. In the corresponding period last year, the deficit was 113.7% of the relevant annual target.

On the global front, Asian markets were trading mostly in green, with investors remaining positive about the prospects for a China-US trade deal. while the pound held its gains as fears of a no-deal Brexit recede. Back home, on the sectoral front, power industry stock were in focus, as Power Minister R K Singh stated that India will achieve 100 per cent household electrification by March 31 as envisaged in the Saubhagya scheme and the next goal is to achieve round the clock power supply to all households.

The BSE Sensex is currently trading at 36288.43, up by 314.72 points or 0.87% after trading in a range of 36129.66 and 36300.98. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.44%, while Small cap index was up by 1.56%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.94%, Industrials up by 1.72%, Basic Materials up by 1.68%, Auto up by 1.50%, Healthcare up by 1.47%, while there were no lossers on the sectoral indices.

The top gainers on the Sensex were Sun Pharma up by 3.28%, Yes Bank up by 2.57%, Axis Bank up by 2.37%, Bajaj Auto up by 2.30% and Larsen & Toubro was up by 2.15%. On the flip side, Kotak Mahindra Bank down by 0.46%, Vedanta down by 0.21%, HCL Tech down by 0.16% and IndusInd Bank was down by 0.01% were the top losers.

Meanwhile, in order to curb excessive salary payout practices, the Reserve Bank of India (RBI) has proposed that at least 50 per cent of compensation of senior officials of private and foreign banks, including whole time directors and chief executive officers, ‘should be variable’. The RBI has also proposed that variable pay of CEO and whole-time directors, among other key personnel, should be capped at 200 percent of fixed pay. Earlier, variable pay was capped at 70 percent of fixed pay but did not include Employee Stock Option Plan (ESOP).

Apart from CEOs and whole-time directors, the proposed changes in compensation would be applicable for material risk takers and control function staff. It has also been suggested that ESOPs should be included as a component of variable pay. Further, it added that in case of divergence, no proposal for increase in variable pay (for the assessment year) should be entertained. In January 2012, the RBI had issued the compensation guidelines for implementation by private sector and foreign banks from the financial year 2012-13. These (2012) guidelines are being reviewed, with an objective to better align with FSB (Financial Stability Board) Principles and Implementation Standards, based on experience and evolving international best practices.

High pay packets and excessive risk-taking ways in the banking industry have been under the scanner ever since the global financial crisis of 2008. Employees were too often rewarded for increasing short-term profit without adequate recognition of the risks and long-term consequences for their organisations.

The CNX Nifty is currently trading at 10922.15, up by 86.85 points or 0.80% after trading in a range of 10875.10 and 10924.05. There were 39 stocks advancing against 10 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Sun Pharma up by 3.37%, Yes Bank up by 2.57%, Ultratech Cement up by 2.41%, Axis Bank up by 2.27% and Bajaj Auto was up by 2.14%. On the flip side, Wipro down by 2.55%, Bharti Infratel down by 1.40%, BPCL down by 0.73%, Bajaj Finserv down by 0.29% and Kotak Mahindra Bank was down by 0.27% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 129.99 points or 0.45% to 28,902.05, Nikkei 225 surged 109.96 points or 0.51% to 21,559.35, Shanghai Composite gained 23.25 points or 0.79% to 2,964.77, Straits Times advanced 17.73 points or 0.54% to 3,279.39 and KOSPI rose 4.55 points or 0.2% to 2,231.15.

On the other hand, Jakarta Composite dropped 12.53 points or 0.19% to 6,528.42 and Taiwan Weighted was down by 26.50 points or 0.26% to 10,365.05.