Markets trade in fine fettle; Nifty above 11,000 mark

Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals with frontline gauges recapturing their crucial 36,500 (Sensex) and 11,000 (Nifty) levels, as traders took comfort with Ficci President Sandip Somany’s statement that the government has promised to lower corporate tax rate to 25% for all companies once Goods and Services Tax (GST) mop-up improves. Some support also came in with the Reserve Bank of India (RBI) stating that it would infuse Rs 12,500 crore into the financial system through open market operations (OMO). The decision is based on an assessment of liquidity conditions and also of durable liquidity needs. However, gains remained capped with the Centre for Monitoring Indian Economy’s (CMIE) latest report showing that the unemployment rate in India rose to 7.2% in February 2019, the highest since September 2016, and up from 5.9% in February 2018. The unemployment rate has climbed despite a fall in the number of job seekers.

On the global front, Asian markets were trading mixed at this point of time, tracking lackluster finish on Wall Street, as investors await the latest reports on the China-US trade talks. Back home, on the sectoral front, cement industry stocks were trading mostly in green with Crisil’s report that the recent steep hike in cement prices expected to boost operating profitability of cement manufacturers. It added that the price hikes, coupled with falling costs and rising demand growth, will enable 200-250 basis points on-year improvement in margins in the current quarter. Sugar sector stocks were buzzing with the government’s statement that Sugar mills can sell 24.5 lakh tonne of the sweetener in the open market in the current month.

The BSE Sensex is currently trading at 36584.15, up by 141.61 points or 0.39% after trading in a range of 36544.67 and 36640.27. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.95%, while Small cap index was up by 1.17%.

The top gaining sectoral indices on the BSE were Telecom up by 2.05%, PSU up by 1.36%, Industrials up by 1.20%, Capital Goods up by 1.14% and Power up by 1.13%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 2.39%, SBI up by 2.05%, Bharti Airtel up by 1.43%, Vedanta up by 1.29% and ITC was up by 1.22%. On the flip side, Sun Pharma down by 1.20%, Hero MotoCorp down by 0.94%, Axis Bank down by 0.76%, Tata Motors down by 0.75% and HCL Tech was down by 0.66% were the top losers.

Meanwhile, with an aim to increase liquidity into the market, the Reserve Bank of India (RBI) has stated that it would infuse Rs 12,500 crore into the financial system on March 07, 2019. The purchase will be made through open market operations (OMOs). It also said there is no security-wise notified amount.

The central bank said it has decided to purchase certain government securities under OMO for an aggregate amount of Rs 12,500 crore on March 07 through multi-security auction, using the multiple price method. It added that the decision is based on an assessment of liquidity conditions and also of durable liquidity needs.

The RBI further said the eligible participants should submit their offers in electronic format on RBI Core Banking Solution (E-Kuber) system before noon on March 07. The result of the auction will be announced on the same day and payment to successful participants will be made during banking hours on the following day.

OMOs are financial tools to either inject or suck out liquidity from the system. When the liquidity is tight, money is pumped into the market by purchase of government securities. While in the case of surplus, the excess money is sucked out by selling of government bonds.

The CNX Nifty is currently trading at 11041.60, up by 54.15 points or 0.49% after trading in a range of 11021.60 and 11052.45. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Wipro up by 3.56%, Bharti Infratel up by 3.39%, Indian Oil Corporation up by 2.31%, Adani Ports & SEZ up by 2.23% and ICICI Bank was up by 2.20%. On the flip side, Sun Pharma down by 1.34%, Tata Motors down by 0.80%, Axis Bank down by 0.80%, Hero MotoCorp down by 0.77% and HCL Tech was down by 0.76% were the top losers.

Asian markets were trading mixed; Hang Seng increased 60.69 points or 0.21% to 29,022.29, Taiwan Weighted strengthened 48.95 points or 0.48% to 10,354.21, Shanghai Composite gained 28.62 points or 0.94% to 3,082.87 and Jakarta Composite was up by 12.32 points or 0.19% to 6,453.60. On the other hand, Straits Times trembled 3.01 points or 0.09% to 3,231.06, KOSPI fell 8.51 points or 0.39% to 2,170.72 and Nikkei 225 was down by 163.30 points or 0.75% to 21,562.98.