Benchmarks trade in fine fettle in early deals

Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals on Friday, traders remained optimistic with report that Finance Commission held discussions with the finance ministry on fiscal and economic management as well as rationalisation of expenditure related to centrally sponsored schemes. The 15th Finance Commission observed that the GDP numbers suggest continued high growth over the medium term even though there have been fluctuations within the overall global trend. Some support came with a report that the ongoing trade war between the US and China will help India tap export opportunities in both the countries in areas such as garments, agriculture, automobile and machinery. Meanwhile, the Reserve Bank of India (RBI) made it mandatory for NBFCs with assets size of more than Rs 50 billion to appoint a chief risk officer (CRO) to ensure highest standards of risk management. The RBI said that the CRO shall be a senior official in the hierarchy of an NBFC and shall possess adequate professional qualification or experience in the area of risk management. The CRO should be appointed for a fixed tenure with the board’s approval.

On the global front, the US markets ended higher for third straight session on Thursday following solid economic data and good earnings from Dow members Cisco and Walmart. However, Asian Market are mostly trading in red despite positive cues overnight from Wall Street for a third straight session as upbeat corporate earnings results and U.S. economic data helped offset worries about US-China trade tensions.

Back home, banking sector stocks remained in focus with a private report that public sector banks are demanding a capital infusion of Rs 50,000 crore in the ongoing financial year 2019-20. In scrip specific developments, HDFC surged as its arm launches new initiative ‘HeART’ and Bharat Forge jumped on rolling out one millionth finished machined crankshaft.

The BSE Sensex is currently trading at 37610.10, up by 216.62 points or 0.58% after trading in a range of 37415.36 and 37625.05. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.50%, while Small cap index was up by 0.52%.

The top gaining sectoral indices on the BSE were Realty up by 1.23%, FMCG up by 0.83%, Consumer Discretionary Goods & Services up by 0.81%, Auto up by 0.79% and Consumer Durables was up by 0.70%, while Healthcare down by 0.38%, Oil & Gas down by 0.26%, Metal down by 0.11%, IT down by 0.07% and Basic Materials was down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 3.90%, Yes Bank up by 3.77%, Coal India up by 2.19%, Hero MotoCorp up by 2.09% and HDFC was up by 1.37%. On the flip side, Tata Motors - DVR down by 1.08%, Infosys down by 0.97%, Tata Motors down by 0.80%, NTPC down by 0.68% and Tata Steel was down by 0.54% were the top losers.

Meanwhile, the 15th Finance Commission, chaired by N K Singh, has observed that the Gross Domestic Product (GDP) numbers suggest continued high growth over the medium term despite there have been fluctuations within the overall global trend. Finance Commission held discussions with the finance ministry on fiscal and economic management as well as rationalisation of expenditure related to centrally sponsored schemes. The Commission also noted that the revenue projections on direct taxes are healthy though on indirect taxes, there have been periodic fluctuations.

On the expenditure trend, there were discussions with regard to rationalisation of the Centrally Sponsored Schemes in sync with the new life cycle, they being co-terminus with the finance commissions. Centrally sponsored schemes are schemes that are implemented by state governments but are funded by the Centre with some portion of funding being borne by states.

The Finance Commission has also held discussions over the last few months with the ministry on the issues related to UDAY and 7th Pay Commission, particularly in the context of the finances of the states. The ministry presented before the Commission some preliminary views of the government on the financial terms of reference of the Commission. The ministry's resource forecast included tax projections; and a comparative picture of tax growth and buoyancy. The expenditure projections made by the ministry included expenditure classifications and requirements; expenditure of the Centre during the tenure of the Commission.

The CNX Nifty is currently trading at 11315.60, up by 58.50 points or 0.52% after trading in a range of 11259.85 and 11319.00. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 3.99%, Yes Bank up by 3.70%, Zee Entertainment up by 3.51%, Indiabulls Housing up by 2.51% and Hero MotoCorp was up by 2.17%. On the flip side, Hindalco down by 2.67%, BPCL down by 1.90%, Indian Oil Corporation down by 1.72%, Dr. Reddys Lab down by 0.99% and NTPC was down by 0.91% were the top losers.

Asian Market are mostly trading in red; Hang Seng decreased 218.38 points or 0.77% to 28,056.69, Shanghai Composite declined 43.23 points or 1.46% to 2,912.48, Taiwan Weighted dropped 27.46 points or 0.26% to 10,447.15, Straits Times trembled 21.83 points or 0.68% to 3,208.43 and Jakarta Composite was down by 17.77 points or 0.3% to 5,877.97. On the flip side, KOSPI rose 5.24 points or 0.25% to 2,072.93 and Nikkei 225 was up by 215.72 points or 1.02% to 21,278.70.