Local equities continue flat trade

Local equity benchmarks were trading flat with positive bias in morning session. Telecom, Capital Goods and Oil & Gas have elevated some gains on their respective front line stocks. Some pessimism came with Federation of Indian Export Organisations’ (FIEO) report that rising protectionism, fluctuation in commodity prices and inadequate availability of liquidity are the three major challenges, which exporters will face in the coming months. It also stated that the WTO has already cautioned that the global trade growth is expected to be lower in 2019 than it was last year. Traders were cautious with a private report that India’s Prime Minister Narendra Modi’s moves to cut red tape and streamline the tax system have won him plaudits, but data shows that the Modi government’s pro-business agenda has failed to translate into earnings growth for most Indian corporations. However, traders took some support with a private report that Paraguay is looking to India for building up its infrastructure and solutions for diversifying the South American nation’s economy. The landlocked country is planning to give more tax incentives to Indian companies wanting to invest abroad.

On the global front, Asian markets were trading mostly in red, amid a raft of geopolitical developments, including European Union leaders and the UK agreeing to a ‘flexible extension’ of the BREXIT deadline till October 31. Back home, noting that the level of non-performing loans in India remains high, the International Monetary Fund has favoured bolstering the level of capitalisation of some banks, particularly government-owned banks. It said the level of non-performing loans (NPLs) in India remains high. And the level of the capitalization of some banks, particularly government-owned banks, should be bolstered.

The BSE Sensex is currently trading at 38590.58, up by 5.23 points or 0.01% after trading in a range of 38529.19 and 38649.42. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.24%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were Telecom up by 1.27%, Capital Goods up by 0.42%, Oil & Gas up by 0.37%, Energy up by 0.37% and Utilities was up by 0.23% while, Metal down by 1.28%, Basic Materials down by 0.60%, BANKEX down by 0.50%, IT down by 0.35% and TECK was down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.81%, Asian Paints up by 1.23%, Mahindra & Mahindra up by 1.14%, HDFC up by 0.90% and Hindustan Unilever was up by 0.87%. On the flip side, Vedanta down by 3.66%, Yes Bank down by 1.49%, IndusInd Bank down by 1.00%, Tata Steel down by 0.99% and Infosys was down by 0.91% were the top losers.

Meanwhile, International Monetary Fund's (IMF) Fiscal Affairs Deputy Director Paul Mauro said that India has a lot of scope for reducing some food and fertiliser subsidies, while also taking steps to ensure that the growth is inclusive and poverty is reduced. He underlined that the economy is growing in excess of 7 per cent, and the objective there is to make sure that that growth is inclusive and it filters down to poverty reduction.

He mentioned there is a lot of scope for reducing untargeted food and fertiliser subsidies and for enhancing revenue administration, including for the Goods and Services Tax (GST) and adding that improved tax compliance would be a priority for India.

Besides, the Fiscal Monitor report noted that the recently announced farm-income-support programme alongside weaker-than-expected goods and services tax revenues led to a deterioration relative to the previous central government budget outturn. The 'Pradhan Mantri Kisan Samman Nidhi' (PM-KISAN) scheme announced in the interim budget will give small and marginal farm households a guaranteed annual income support of Rs 6,000. The report also said that digitisation helped reduce fraud and also introduced economies.

The CNX Nifty is currently trading at 11586.70, up by 2.40 points or 0.02% after trading in a range of 11568.65 and 11604.20. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.54%, Asian Paints up by 1.31%, Indian Oil Corporation up by 0.96%, Hindustan Unilever up by 0.94% and Dr. Reddy's Lab was up by 0.90%. On the flip side, Vedanta down by 3.63%, Yes Bank down by 1.29%, Adani Ports down by 1.25%, Zee Entertainment down by 1.19% and JSW Steel was down by 1.07% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 261.41 points or 0.87% to 29,858.15, Taiwan Weighted dropped 52.69 points or 0.48% to 10,815.45, Jakarta Composite dropped 51.06 points or 0.79% to 6,427.27, Shanghai Composite declined 44.04 points or 1.36% to 3,197.89 and KOSPI was down by 1.93 points or 0.09% to 2,222.46.

On the other hand, Straits Times advanced 7.23 points or 0.22% to 3,334.88 and Nikkei 225 was up by 25.66 points or 0.12% to 21,713.23.