Indian markets continue to trade in green terrain in early noon session

Stock markets were trading in positive terrain in early noon session amid buying by domestic as well as foreign institutional investors ahead of February derivatives expiry. Buying was witnessed in Metal, Utilities and Energy sectors, while amongst individual stocks, Vedanta, Tata Motors and Sun Pharma were witnessing maximum buying by investors. The strength in the markets was being supported with private report indicating that private equity (PE) investments in India witnessed a 36 per cent growth to $1,325 million despite fall in volume on account of increased follow-on investments last month as compared to a year ago. Some optimism also came as Central Board of Indirect Taxes and Customs Member John Joseph said that the government has detected Goods and Services Tax (GST) evasion worth Rs 20,000 crore between April-February 2018-19 of which Rs 10,000 crore was recovered. However, gains remain limited as Fitch Ratings in its latest report has stated that the government's $7 billion (around Rs 48,000 crore) fund infusion into PSBs would not be sufficient to support significantly stronger lending growth. It estimated that banks will need an additional $23 billion (around Rs 1.6 trillion) in 2019, after these latest injections, to sufficiently meet minimum capital standards. Meanwhile, in the wake of escalated tension between India and Pakistan, Indian exporters of pharmaceuticals are apprehensive of their future. The Indian pharmaceutical companies exports over $140 million to Pakistan with 50 per cent active pharmaceutical ingredients (API). Besides, traders are awaiting GDP numbers which is scheduled to release later in the day.

On the global front, Asian markets were trading in red, as US Trade Representative Robert Lighthizer dented some of the recent optimism towards China-US trade relations. Back home, in scrip specific development, Jindal Stainless was trading in green despite iron ore prices in India may rise 3-4% in 2019. This would have a direct bearing on 62 percent of the steel production that is based on supply from merchant miners. Further, domestic steel prices are likely to soften following global cues.

The BSE Sensex is currently trading at 35991.79, up by 86.36 points or 0.24% after trading in a range of 35916.26 and 36085.85. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.35%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were Metal up by 1.00%, Utilities up by 0.67%, Energy up by 0.66%, PSU up by 0.53% and Industrials was up by 0.53%, while IT down by 0.16% and TECK was down by 0.15% were the only losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 1.79%, Tata Motors up by 1.78%, Sun Pharma up by 1.31%, Coal India up by 0.93% and Reliance Industries was up by 0.86%. On the flip side, ONGC down by 1.49%, Hero MotoCorp down by 1.28%, TCS down by 1.25%, Bajaj Auto down by 0.83% and Axis Bank was down by 0.81% were the top losers.

Meanwhile, Global rating agency Moody’s Investors Service in its latest report has said that the Goods and Services Tax (GST) Council slashed tax rate on under-construction housing properties to 5 percent from earlier 12 percent, will boost demand and increase sales of properties under construction. However, it noted that the withdrawal of input tax credit (ITC) is likely to impact the margins of realty developers.

Moody’s has stated that India's real estate sector has weathered difficulties in the last few years amid price reductions from a glut of inventory and lackluster demand. It pointed out that the reduction in GST will improve housing affordability as the amount to be paid by a potential house buyer will be reduced, which will increase demand for property. It added that the reduction of GST on Affordable Housing to 1 percent is in line with the government's increased focus on this segment.

Rating agency further stated that the new GST measures eliminate the ability to claim ITC, which may hit the profitability of the developers. It noted that currently, the developers are able to reduce the tax liability when it makes a sale by claiming tax paid on goods and services required for the construction of properties. It also said that this will further impact developers' profit margins that are already under pressure. It added that the developers have the option to mitigate this loss by increasing prices slightly given that overall pricing for the customer has reduced with lower GST.

The CNX Nifty is currently trading at 10826.35, up by 19.70 points or 0.18% after trading in a range of 10800.20 and 10865.70. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 1.73%, Tata Motors up by 1.72%, GAIL India up by 1.67%, Sun Pharma up by 1.20% and Indian Oil Corporation was up by 1.06%. On the flip side, TCS down by 1.59%, Hero MotoCorp down by 1.45%, ONGC down by 1.35%, Indiabulls Housing down by 1.01% and Bajaj Auto was down by 0.90% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 8.20 points or 0.03% to 28,749.24, Nikkei 225 slipped 182.89 points or 0.85% to 21,373.62, Straits Times trembled 20.44 points or 0.63% to 3,229.58, KOSPI fell 26.12 points or 1.17% to 2,208.67, Shanghai Composite declined 5.84 points or 0.2% to 2,947.98 and  Jakarta Composite was down by 72.86 points or 1.12% to 6,452.82.