Domestic bourses maintain gaining momentum in early noon deal

Domestic bourses continued to trade in fine contour on continued buying by funds and retail investors with both Sensex and Nifty were trading above 39,000 and 11,700 marks, respectively. Most of the sectoral indices were trading firm and Capital Goods was the top gainer on BSE, up by around 2.62% followed by Industrials and Realty indices, trading up around 2.00%. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices trading up by around 1.00% each. Sentiments remained up-beat as India Inc has welcomed the thumping majority accorded to the Bharatiya Janata Party (BJP) in Lok Sabha Elections 2019. BJP and its allies are leading in 355 seats while the saffron party alone is leading in 305 seats. The strength in the markets was also being supported by Finch report that the BJP’s ‘apparent landslide victory’ is likely to improve business sentiment and outlook for private investment. It added that from a credit rating perspective, Fitch would focus on the extent of the next government’s efforts to improve India’s weak fiscal finances.

On the global front, Asian markets were trading mixed, as the sentiment torn between investors worried that the U.S.-China trade war was becoming more protracted, and others hopeful that the world's two largest economies would reach a settlement soon. Back on domestic turf, in scrip specific development, shares of General Insurance Corporation gained despite reporting fall of 31.21% in its net profit at Rs 2,224.31 crore as compared to Rs 3,233.59 crore for the previous year.

The BSE Sensex is currently trading at 39025.08, up by 213.69 points or 0.55% after trading in a range of 38824.26 and 39223.85. 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 0.85%, while Small cap index was up by 0.96%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.62%, Industrials up by 1.90%, Realty up by 1.84%, Telecom up by 1.19%, Bankex up by 1.08%, while Consumer Durables was down by 0.22% was the only losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.35%, Hero MotoCorp up by 2.00%, ICICI Bank up by 2.00%, Asian Paints up by 1.93% and Mahindra & Mahindra was up by 1.87%. On the flip side, ONGC down by 1.69%, Hindustan Unilever down by 0.91%, NTPC down by 0.77%, HCL Technologies down by 0.71% and Coal India was down by 0.64% were the top losers.

Meanwhile, Fitch Ratings in its latest report has stated a landslide victory of the Bharatiya Janata Party (BJP) marked an easing of political uncertainty and is expected to improve business sentiment and the outlook for private investment. From a credit rating perspective, it would focus on the extent of the next government's efforts to improve India's weak fiscal finances.

Although, the global rating agency expects the fiscal deficit to remain manageable in the next few years, but said it has seen ‘little indication’ so far that the government will pursue significant deficit reduction of the order needed to meet the general government debt ceiling of 60 percent of GDP by March 2025 as mandated by the FRBM Act. It noted that fiscal consolidation stalled under the BJP in recent years, and its campaign promise to support farmers' incomes has added to spending pressure.

Fitch expects the government to remain reform-minded, as the BJP's manifesto highlighted the aim to improve the business environment and governance standards, strengthen infrastructure, and stimulate the manufacturing sector through a new industrial policy. According to the report, another area of potential reforms is to enhance the efficiency and effectiveness of government administration, and the legal and judiciary system.

The CNX Nifty is currently trading at 11714.40, up by 57.35 points or 0.49% after trading in a range of 11658.10 and 11775.55. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 3.17%, Zee Entertainment up by 2.90%, Eicher Motors up by 2.11%, Bharti Airtel up by 2.02% and Asian Paints was up by 2.00%. On the flip side, ONGC down by 1.84%, Adani Ports &Special down by 1.03%, Hindustan Unilever down by 0.90%, Tech Mahindra down by 0.85% and NTPC was down by 0.81% were the top losers.

Asian markets were trading mixed; Taiwan Weighted strengthened 24.86 points or 0.24% to 10,333.23, Shanghai Composite gained 3.02 points or 0.11% to 2,855.54, Hang Seng increased 68.61 points or 0.25% to 27,335.74 and Jakarta Composite was up by 21.25 points or 0.35% to 6,053.95.

On the other hand, Nikkei 225 slipped 64.90 points or 0.31% to 21,086.24, KOSPI fell 17.42 points or 0.85% to 2,042.17 and Straits Times was down by 0.28 points or 0.01% to 3,160.44.