Sensex, Nifty continue to trade in positive terrain

Indian stock markets continued to trade in positive terrain in the early noon session due to buying in Energy, Healthcare and Telecom stocks. Buying in frontline stocks such as Yes Bank, Indusind Bank and Sun Pharma were aiding sentiment, while selling was witnessed in Power Grid Corporation, HCL Technologies and Hero MotoCorp. Sentiment remained positive after the Reserve Bank of India (RBI) has decided to inject long-term liquidity worth $5 billion into the system through foreign exchange swap arrangement with banks for three years. The swap will be in the nature of a simple buy/sell foreign exchange swap from the RBI side. Further, some support also came in as RBI in its latest data on performance of the private corporate business has indicated that the private firms in manufacturing sector registered a 24.9 percent growth in net profit in Q3 (October-December) of 2018-19 on annual basis, aiding from lower tax provisions. Meanwhile, India and the US have agreed to build six American nuclear power plants in India, in a boost to bilateral civil nuclear energy cooperation. A major aspect of the deal was the Nuclear Suppliers Group (NSG) that gave a special waiver to India enabling it to sign cooperation agreements with a dozen countries.

On the global front, Asian markets were trading mostly in red, as investors await data from China for clues about the health of its economy. Back on streets, auto stocks fall as auto industry’s retail sales in February dropped 8.06 per cent as weak consumer demand continues for the sixth straight month. The Federation of Automobile Dealers Associations (FADA) of India data shows the total auto sales in February was 1,452,078, compared to 1,579,349 units last year - a drop of 8.06 per cent year-on-year (YoY). The month-on-month (MoM) drop was 15.30 per cent, from 1,714,400 units sold in January.

The BSE Sensex is currently trading at 37788.13, up by 35.96 points or 0.10% after trading in a range of 37737.31 and 37907.78. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.16%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Energy up by 0.68%, Healthcare up by 0.49%, Telecom up by 0.41%, Oil & Gas up by 0.35% and Bankex was up by 0.27%, while Power down by 1.10%, Utilities down by 0.95%, Auto down by 0.61%, Consumer Durables down by 0.58% and Basic Materials was down by 0.55% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.62%, Indusind Bank up by 2.48%, Sun Pharma up by 2.21%, Coal India up by 1.03% and Asian Paints was up by 1.03%. On the flip side, Power Grid Corporation down by 3.50%, HCL Technologies down by 1.70%, Hero MotoCorp down by 1.51%, Tata Motors down by 0.85% and ITC was down by 0.68% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has relaxed norms for imports of capital and non-capital goods by raising the trade credit (TC) limit of up to $150 million or equivalent per import transaction under the automatic route. Announcing the modified revised framework for 'Trade Credit Policy', the RBI, however, reduced the all-inclusive cost (all-in-cost) for overseas loans to benchmark rate plus 250 basis points from the previous 350 bps.

Trade credits (TCs) refer to the credits extended by the overseas supplier, bank, financial institution and other permitted recognised lenders for maturity for imports of capital and non-capital goods permissible. As per to the revised framework, TCs up to $150 million or equivalent per import transaction for oil and gas refining & marketing, airline and shipping companies can be availed under the automatic route. For others, the limit is set at $50 million or equivalent per import transaction.

The RBI said that the revised framework comes into force with immediate effect. All-in costs refer to the sum of all fees, interest, and charges. Withholding tax payable in Indian currency is not part of all-in-cost. Earlier, under the automatic route, banks were permitted to approve trade credit up to $20 million. TCs exceeding $20 million per import transaction were required the prior approval of the RBI.

The CNX Nifty is currently trading at 11343.80, up by 2.10 points or 0.02% after trading in a range of 11329.25 and 11383.45. There were 21 stocks advancing against 28 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Yes Bank up by 2.68%, Indusind Bank up by 2.27%, Sun Pharma up by 1.92%, Indiabulls Housing up by 1.80% and Indian Oil Corporation was up by 1.34%. On the flip side, Power Grid Corporation down by 3.52%, Ultratech Cement down by 2.01%, HCL Technologies down by 1.82%, Hero MotoCorp down by 1.45% and Grasim Industries was down by 1.27% were the top losers.

Asian markets were trading mostly in red; KOSPI fell 0.03 points or 0% to 2,148.38, Straits Times trembled 5.44 points or 0.17% to 3,190.15, Shanghai Composite declined 37.74 points or 1.25% to 2,989.21 and Taiwan Weighted was down by 20.29 points or 0.2% to 10,353.03. On the other hand, Hang Seng increased 14.66 points or 0.05% to 28,822.11, Nikkei 225 surged 17.77 points or 0.08% to 21,308.01 and Jakarta Composite was up by 9.57 points or 0.15% to 6,387.15.