Bourses manage to keep heads above water in afternoon deals

Indian equity benchmarks managed to keep their heads above water in afternoon session, on the back of buying by funds and retail investors. Traders were taking some support from 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. Rupee’s appreciation against the dollar along with positive trade in Asian equities too supported the markets. However, the markets trimmed most of their earlier gains, as investors remained cautious with Employees State Insurance Corporation (ESIC) report that job creation fell by 6.91% in January to 11.23 lakh compared to 12.06 lakh in the same month last year. Meanwhile, the commerce ministry has introduced an online system for exporters to obtain export licence for restricted category goods, a move aimed at promoting paperless work and ease of doing business.

On the global front, Asian markets were trading mostly in green, after global markets slid on worries about U.S. and European economic growth. Back home, the BSE Sensex is currently trading at 37828.08, up by 19.17 points or 0.05% after trading in a range of 37800.08 and 37962.75. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.57%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Realty up by 1.52%, Energy up by 1.14%, Utilities up by 1.06%, PSU up by 1.03% and Power up by 0.96%, while IT down by 1.25%, TECK down by 1.02%, FMCG down by 0.23%, Capital Goods down by 0.05% and Auto down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.35%, Asian Paints up by 1.54%, NTPC up by 1.51%, SBI up by 1.48% and Reliance Industries up by 1.48%. On the flip side, Infosys down by 2.06%, TCS down by 1.10%, ITC down by 1.08%, HDFC down by 0.64% and Larsen & Toubro down by 0.55% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that the Reliance Jio-induced pains for the telecom sector will continue with the industry slated to report fall in revenue for 3rd straight year in FY19. It noted that the stiff competition after the launch of Jio has continued and the pricing pressure manifested in severe deterioration in the financial performance, marked by decline in revenues, lower profitability (even losses for some telecom companies) and low cash generation.

According to the report, after the 11 percent decline in revenues in FY18 to Rs 2.1 lakh crore, the industry top-line is expected to further dip by 7 percent in FY19. However, it also expects a 6 percent growth in FY20. From a profitability perspective, it said the operating profit decline is expected to narrow to 18 percent in FY19 from the 21 percent decline in the previous fiscal. Though, it added that the same is expected to go up by 20 percent in FY20.

ICRA further said that there is room for a minor recovery in the upcoming fiscal year 2019-20. It noted that FY20 can witness the benefits of higher data usage, and a relatively more consolidated and stable industry structure resulting in some pricing discipline. It also said in FY20, operators will be bolstered by the planned deleveraging initiatives to the tune of Rs 90,000-1 lakh crore. It added that the overall debt for the sector will come down to Rs 4.3 lakh crore in end FY20 from the Rs 4.75 lakh crore expected in March 2019.

Based on the December quarter trends, ICRA said the decline in ARPU (average revenue per user) has been arrested and the incumbent operators are looking for triggers of upward movement, with some operators implementing minimum recharge plans. It informed that the government also stands to lose out in the process as non-tax revenues earned by it in terms of license fee and spectrum usage charges will go down.

The CNX Nifty is currently trading at 11364.25, up by 10.00 points or 0.09% after trading in a range of 11352.45 and 11402.95. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.44%, GAIL India up by 2.13%, Indiabulls Housing Finance up by 2.03%, Zee Entertainment up by 1.93% and NTPC up by 1.92%. On the flip side, Tech Mahindra down by 2.22%, Infosys down by 2.01%, UPL down by 1.64%, Ultratech Cement down by 1.03% and ITC down by 1.00% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 451.28 points or 2.15% to 21,428.39, Taiwan Weighted strengthened 79.72 points or 0.76% to 10,559.20, Jakarta Composite soared 57.19 points or 0.89% to 6,468.44, Straits Times advanced 15.47 points or 0.49% to 3,198.39 and KOSPI rose 3.94 points or 0.18% to 2,148.80.

On the flip side, Hang Seng decreased 30.30 points or 0.11% to 28,493.05 and Shanghai Composite was down by 44.10 points or 1.45% to 2,998.93.