Sensex, Nifty continue to trade in positive terrain

Indian stock markets continued to trade in positive terrain in the early noon session due to buying in IT, TECK and FMCG stocks. Buying in frontline stocks such as Tata Steel, Infosys and TCS were aiding sentiment, while selling in Yes Bank, Kotak Mahindra Bank and Coal India kept the gains in the markets in check. Besides, broader indices were trading mixed with the BSE Mid cap index surged 0.16%, while Small cap index was down by 0.18%. Investors took encouragement with the Moody's Investors Service report that the Reserve Bank's new prudential framework for stressed asset resolution is ‘credit positive', but flagged the slower-than-expected progress of resolution under Insolvency and Bankruptcy Code as a key hurdle. Some optimism also came with Trade Promotion Council of India’s (TPCI) statement that the government should take six concrete steps such as reducing cost and time of port clearance for goods and enhancing availability of credit with a view to boost exports. Meanwhile, according to a private report the government might introduce a tax on cash withdrawals exceeding Rs 10 lakh a year. The move will help the government clamp down on black money and promote digital payments.

On the global front, Asian markets were trading in green after the United States dropped its threat to impose tariffs on Mexico in a deal to combat illegal migration from Central America, while weak US jobs data raised hopes for US interest rate cuts. Back home, in scrip specific developments, share of Jammu & Kashmir (J&K) Bank declined as the Anti-Corruption Bureau (ACB) has concluded its search and seizure operations at Jammu & Kashmir (J&K) Bank's corporate office, as part of its probe into the alleged fraudulent appointments in the bank. While, RPP Infra Projects edged up as the company has bagged a new order worth Rs 472 million from Bharat Heavy Electricals (BHEL) for structural works of their Coal Handling Plant & Ash Handling Plant.

The BSE Sensex is currently trading at 39809.99, up by 194.09 points or 0.49% after trading in a range of 39757.97 and 39979.48. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index rose 0.16%, while Small cap index was down by 0.18%.

The top gaining sectoral indices on the BSE were IT up by 1.37%, TECK up by 1.26%, FMCG up by 1.05%, Power up by 0.98%, Consumer Durables up by 0.84%, while Oil & Gas down by 0.61%, Realty down by 0.28%, PSU down by 0.26% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.95%, Infosys up by 1.54%, TCS up by 1.49%, Indusind Bank up by 1.36% and HCL Technologies was up by 1.28%. On the flip side, Yes Bank down by 1.18%, Kotak Mahindra Bank down by 1.13%, Coal India down by 0.72%, HDFC down by 0.59% and Tata Motors - DVR was down by 0.37% were the top losers.

Meanwhile, International Air Transport Association (IATA) chief Alexandre de Juniac has said that Indian aviation market is facing very tough competition and the cost environment too is not in their favour amid Jet Airways, the 25-year-old airline, shuttering operations. He pointed out that high costs, adverse conditions like fluctuation in rupee against the US dollar and strong competition were putting pressure on the profitability of country’s airlines. He also noted that India was one of the world's fastest growing domestic aviation market but growth turned negative in April 2019, in the wake of crisis at full service carrier Jet Airways.

Talking about Jet Airways, which was a strong and contributing member of IATA, de Juniac said that the airline's grounding was a pity and also reflects tough competition in the sector. He said 'It tells us that the Indian market is tough due to macroeconomic conditions, the rupee, the oil prices and more generally the costs.” He also felt that these are putting pressure on the profitability of Indian members and it is a market where the competition is very tough.

Noting that cost environment is not very favourable for airlines in India, IATA chief said prospects for the airlines' industry are less positive than six months ago. He also said ‘it is a global trend, which is more accurate and visible for cargo than for passengers. We still see strong demand in the passenger business.’ On expectations from the new government in India, he said taxes can be lowered, competition on fuel supply can be improved and more efforts being taken on regulating airports.

The CNX Nifty is currently trading at 11924.85, up by 54.20 points or 0.46% after trading in a range of 11909.60 and 11975.05. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.90%, Tech Mahindra up by 2.10%, Tata Steel up by 2.03%, Britannia up by 1.95% and Infosys was up by 1.55%. On the flip side, BPCL down by 2.72%, Yes Bank down by 1.11%, Kotak Mahindra Bank down by 1.08%, Coal India down by 1.04% and Indian Oil Corporation was down by 1.01% were the top losers.

All Asian markets were trading in green; Shanghai Composite gained 21.94 points or 0.78% to 2,849.74, Taiwan Weighted strengthened 157.27 points or 1.51% to 10,566.47, KOSPI rose 25.35 points or 1.22% to 2,097.68, Straits Times advanced 27.08 points or 0.86% to 3,193.37, Nikkei 225 surged 251.46 points or 1.2% to 21,136.17, Hang Seng increased 590.71 points or 2.19% to 27,555.99 and Jakarta Composite was up by 84.68 points or 1.36% to 6,293.80.