Local equities trade above neutral lines in morning deals

Local equity benchmarks are trading in above neutral lines in morning session, with Sensex and Nifty garnering gains around 92 and 10 points, respectively. Realty, Telecom and Energy counters were on the priority list of the buyers. Some encouragement came with the income tax (I-T) department has notified the modified norms for startups to enable them to seek angel tax exemption for investments of up to Rs 25 crore. The modified norms, which are aimed at encouraging budding entrepreneurs, will be effective retrospectively from February 19, when the Department for Promotion of Industry and Internal Trade (DPIIT) relaxed the norms for startups. Traders took note of a report that India has further strengthened its position of being a net importer of oil during the five years of the Modi government, floundering on an ambitious plan that entailed reducing country's import dependency of oil by 10 per cent by 2022. However, gains remain capped as Organisation for Economic Co-operation and Development (OECD) warned that trade tensions and political uncertainty including BREXIT are weighing on the world’s economy. OECD lowered its forecast to 3.3 per cent for this year, down from the 3.5 per cent it predicted in November, which was itself a downgrade from a previous 3.7 per cent.

On the global front, Asian markets were trading mostly in red, with no fresh news on the China-US trade front and as investors turn their attention to further signs of weakness in the global economy. Back home, a report stated that India is exploring various options, including approaching the WTO dispute body, to deal with the US decision to withdraw import incentives for about 2,000 domestic goods under the trade preference scheme.

The BSE Sensex is currently trading at 36728.23, up by 92.13 points or 0.25% after trading in a range of 36650.71 and 36749.30. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.31%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.59%, Telecom up by 1.11%, Industrials up by 1.00%, Energy up by 0.58% and Realty was up by 0.53%, while Metal down by 0.84%, Basic Materials down by 0.14%, IT down by 0.06%, TECK down by 0.03% and Auto was down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.64%, Reliance Industries up by 1.07%, Tata Motors - DVR up by 1.01%, Mahindra & Mahindra up by 0.98% and Power Grid was up by 0.81%. On the flip side, Vedanta down by 2.16%, Coal India down by 1.42%, ONGC down by 1.29%, Yes Bank down by 1.08% and NTPC was down by 0.71% were the top losers.

Meanwhile, CRISIL in its latest report has said that India’s wind energy sector may see a slow growth with regard to capacity addition over the next five years, driven by the allotment of central transmission utility’s grid-connected capacities. The shift to a competitive bidding mechanism has slowed industry growth on account of a significant fall in tariffs, triggering a decline in both bid response and profitability for original equipment manufacturers (OEMs).

It is expecting that capacity addition will rise by 14 to 16 gigawatt (GW) over fiscal 2019 to 2023, entailing investments of Rs 1,100 billion (Rs 1,10,000 crore). It further noted that capacity additions would primarily be driven by central government allocations with relatively stronger counterparties like Solar Energy Corporation of India (SECI) and PTC, reducing risk as compared to direct exposure to state discoms.

Besides, it added that state auctioning has slowed as several states have signed power supply agreements (PSAs) with PTC and SECI to procure wind power under the schemes auctioned by them, in order to help fulfil their non-solar renewable purchase obligations (RPO) targets.

The CNX Nifty is currently trading at 11063.95, up by 10.95 points or 0.10% after trading in a range of 11044.45 and 11077.95. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.96%, HPCL up by 2.35%, Bharti Infratel up by 1.69%, Mahindra & Mahindra up by 1.62% and Reliance Industries was up by 1.08%. On the flip side, Vedanta down by 2.18%, Indian Oil Corporation down by 2.07%, Indiabulls Housing Finance down by 1.98%, Zee Entertainment down by 1.74% and Wipro was down by 1.64% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 slipped 176.42 points or 0.82% to 21,420.39, Hang Seng decreased 185.32 points or 0.64% to 28,852.28, Taiwan Weighted dropped 49.34 points or 0.48% to 10,307.81, KOSPI fell 8.79 points or 0.4% to 2,166.81 and Shanghai Composite was down by 0.50 points or 0.02% to 3,101.60. On the other hand, Straits Times was up by 8.43 points or 0.26% to 3,231.27.