Benchmarks trade in fine fettle in early deals

Indian equity benchmarks gained traction after a cautious start and are trading in fine fettle in early deals with Sensex recapturing its crucial 37,900 level and Nifty inching towards its crucial 11,400 level. Traders took some encouragement with the finance ministry’s statement that the liquidity situation in the economy was comfortable, and it will improve further with the central bank’s move to infuse Rs 35,000 crore through the rupee-dollar swap arrangement, announced last week. Meanwhile, markets regulator SEBI has reviewed and modified the commission as well as disclosure norms for the mutual fund industry. However, gains remain capped with state-run India Meteorological Department’s (IMD) statement that its study of global models shows that there is little chance of a strong El Nino in 2019. A strong El Nino could have an adverse impact on India’s southwest monsoon that starts from June as almost 80 per cent of El Nino years have seen below normal rains.

On the global front, most of the Asian markets counters are trading in green at this point of time as European and North American markets stabilised in the overnight session. The US markets ended Monday’s choppy trading session mostly lower, as investors wrestled to make sense of newly pessimistic outlooks for the global economy.

Back home, telecom sector stocks remained in focus with ICRA’s report stating that the Reliance Jio-induced pains for the telecom sector will continue with the industry slated to report decline in revenue for the third consecutive year. However, it said there is room for a minor recovery in the upcoming fiscal year 2019-20. In scrip specific developments, Tata Power gained with its arm inking agreement with Trust Energy Resources and Indiabulls Real Estate edged higher on plan to raise funds through issuance of NCDs.

The BSE Sensex is currently trading at 37911.98, up by 103.07 points or 0.27% after trading in a range of 37814.54 and 37921.05. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.48%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were Realty up by 2.20%, Oil & Gas up by 1.54%, Energy up by 1.34%, PSU up by 1.16% and Utilities was up by 0.91%, while IT down by 0.94% and TECK was down by 0.75% were the only losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.27%, NTPC up by 1.88%, Coal India up by 1.84%, Reliance Industries up by 1.25% and Indusind Bank up by 1.11%. On the flip side, Infosys down by 1.40%, TCS down by 1.01%, Power Grid Corporation down by 0.89%, Bajaj Auto down by 0.44% and Mahindra & Mahindra down by 0.17% were the top losers.

Meanwhile, welcoming the Central Bank’s rupee-dollar swap auction, the Finance Ministry has said that liquidity situation of the economy is comfortable and it will be boosted further by Rs 35,000 crore through the rupee-dollar swap window.

Department of Economic Affairs Secretary Subhash Chandra Garg has said that liquidity situation is comfortable now. He said the Reserve Bank of India’s (RBI) swap arrangement is a ‘sound move’. In order to meet the durable liquidity needs of the system, the 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.

Under this swap, the central bank wants to buy dollars (around $5 billion, or Rs 35,000 crore) from banks and return these dollars at the end of three years (in 2022) for a ‘forward’ premium. This premium would be fixed through an auction on March 26. This typically means the RBI will be buying dollars from banks and selling ‘forward dollars’ for a premium.

The CNX Nifty is currently trading at 11391.00, up by 36.75 points or 0.32% after trading in a range of 11363.50 and 11394.20. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 2.56%, ONGC up by 2.17%, NTPC up by 2.03%, Zee Entertainment up by 2.01% and Coal India up by 1.75%. On the flip side, Infosys down by 1.24%, Tech Mahindra down by 1.05%, Power Grid Corporation down by 0.97%, TCS down by 0.89% and Wipro down by 0.86% were the top losers.

Most of the Asian markets are trading in green: Nikkei 225 soared 429.41 points or 2.05% to 21,406.52, Straits Times jumped 28.53 points or 0.90% to 3,211.45, Hang Seng rose 40.95 points or 0.14% to 28,564.30, Taiwan Weighted gained 43.38 points or 0.41% to 10,522.86, KOSPI added 5.75 points or 0.27% to 2,150.61 and Jakarta Composite was up by 55.15 points or 0.86% to 6,466.40. On the flip side, Shanghai Composite was down by 30.13 points or 0.99% to 3,012.90.