Key gauges trim some gains in morning deals

Local benchmarks trimmed some of their initial gains in morning session but managed to remain in green territory. Metal, Consumer Durables and IT counters were on the priority list of the buyers. Traders took note of a private report that the weak volume growth reported by consumer staple companies in Q4, FY19 underlines the slowdown seen in housing over the past five to six years and automobiles over the past year. The next government may have its task cut out to revive flagging economic growth. Traders were getting some solace with a report that India and the US reiterated commitment to further boost bilateral trade and investments, as US commerce secretary Wilbur Ross met commerce and industry minister Suresh Prabhu. Some support came with a report that representatives of over 100 American companies are visiting India as part of the US Department of Commerce’s annual trade mission programme, Trade Winds. Besides, New Delhi, the delegation would be visiting Ahmedabad, Chennai, Kolkata, Mumbai, Bengaluru, Hyderabad, and would meet government leaders, market experts, and pre-vetted potential business partners during its eight-day stay in India.

On the global front, Asian markets were trading mixed, as traders weighed the latest development in the ongoing trade dispute between the US and China. Back home, the Central Board of Direct Taxes (CBDT) reported that income-tax (IT) e-returns filed in FY18 and the previous few years were inflated as these included returns for not just the assessment year concerned but for substantial number of returns belonging to earlier years as well.

The BSE Sensex is currently trading at 38664.97, up by 64.63 points or 0.17% after trading in a range of 38658.46 and 38835.54. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.35%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were Metal up by 1.08%, Consumer Durables up by 0.90%, Basic Materials up by 0.55%, IT up by 0.54% and FMCG was up by 0.51%, while Oil & Gas down by 1.36%, Energy down by 1.12%, Telecom down by 0.47%, PSU down by 0.27% and Realty was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.47%, Power Grid up by 1.34%, Vedanta up by 1.26%, Infosys up by 1.11% and Coal India was up by 1.04%. On the flip side, Reliance Industries down by 1.17%, HCL Tech down by 0.79%, IndusInd Bank down by 0.74%, NTPC down by 0.59% and Bharti Airtel was down by 0.51% were the top losers.

Meanwhile, CRISIL, rating agency, in its latest report has stated total debt of state-owned discoms is set to increase to pre-Uday levels of Rs 2.6 trillion by the end of current financial year (FY20), as many states have limited fiscal headroom to continue to support them. As per rating agency, which analysed 15 states which account for 85% of the aggregate losses, discoms have to become commercially viable through prudent tariff hikes and a material reduction in aggregate technical and commercial (AT&C) losses. The report further stated that nine of the 15 states account for over two-thirds of the total debt of discoms and are already in breach of their law mandated debt of under 25% of GSDP.

The report highlighted under the agreement the states had signed under Uday scheme with the Centre in FY16, discoms were to initiate begin reforms by reducing AT&C losses by 900 basis points to 15%  by FY19, and also implement regular tariff hikes of 5-6% per annum. In lieu, the states took over three- fourths of discom debt, thus reducing their interest burden.

Besides, the report noted that improvement in operations may face challenges because the focus on new rural connections without adequate tariff hikes can increase losses. As in the past, report mentioned that such situation leaves the states with two options, including take hard decisions to get discoms back into shape, or prepare for another bail-out.

The CNX Nifty is currently trading at 11607.00, up by 8.75 points or 0.08% after trading in a range of 11603.50 and 11657.05. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.81%, Hindustan Unilever up by 1.70%, Vedanta up by 1.26%, Infosys up by 1.04% and Power Grid was up by 1.02%. On the flip side, BPCL down by 4.50%, Indian Oil Corporation down by 2.49%, Indiabulls Housing Finance down by 1.59%, Bharti Infratel down by 1.53% and GAIL India was down by 1.34% were the top losers.

Asian markets were trading mixed; Taiwan Weighted gained 95.73 points or 0.88% to 10,992.85, Shanghai Composite rose 9.41 points or 0.32% to 2,915.87, Straits Times advanced 6.21 points or 0.19% to 3,296.83 and Jakarta Composite was up by 40.22 points or 0.64% to 6,296.57.

On the other hand, Hang Seng decreased 6.94 points or 0.02% to 29,202.88, Nikkei 225 slipped 363.26 points or 1.63% to 21,895.47 and KOSPI was up by 23.03 points or 1.05% to 2,173.29.