Benchmarks trade with jubilation in early deals

Indian equity benchmarks have made a positive start and are trading with jubilation in early deals on Wednesday. Frontline gauges have surpassed their crucial 39,300 (Sensex) and 11,750 (Nifty) levels. Traders took encouragement with the Reserve Bank of India’s (RBI) statement that it will infuse Rs 12,500 crore of liquidity into the system through purchase of government bonds. Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of five government securities. Investors also took note of a private report that seven million jobs were formalised between 2015 and 2018 because of various measures, including GST, demonetisation, Skill India policies, fixed-term contract, maternity leave enhancement, among others. The report estimated job formalisation to the tune of 11 million between 2018 and 2021.

Global cues also remained supportive with all the Asian markets trading in green following positive developments overnight on the US-China trade front. The US markets ended higher on Tuesday as investors expressed optimism on a US-China trade deal after President Donald Trump said he will be meeting with his Chinese counterpart, Xi Jinping, at the upcoming G-20 summit.

Back home, aviation stocks were buzzing with aviation regulator DGCA’s data showing that domestic air passenger traffic saw a rebound in May as it increased by 2.96 per cent after a slump in April. The domestic air traffic in May this year consisted of 12.20 million passengers as compared to 11.85 million passengers in the same month last year. In scrip specific development, HCL Technologies gained on entering into partnership with Cricket Australia and NLC India jumped on commissioning 100 MW Solar PV power plant in Tamil Nadu.

The BSE Sensex is currently trading at 39345.43, up by 299.09 points or 0.77% after trading in a range of 39158.10 and 39435.80. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.53%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Metal up by 2.19%, Realty up by 1.77%, Basic Materials up by 1.09%, Bankex up by 0.92%, Power up by 0.89%, while Healthcare down by 0.11%, Telecom down by 0.08% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.61%, Kotak Mahindra Bank up by 2.21%, Tata Motors up by 2.12%, Vedanta up by 2.08% and Tata Motors - DVR up by 1.95%. On the flip side, Hero MotoCorp down by 0.43%, Bajaj Auto down by 0.31%, Sun Pharma down by 0.26%, Bharti Airtel down by 0.19% and Coal India down by 0.13% were the top losers.

Meanwhile, with a view of evolving liquidity situation in the market, the Reserve Bank of India (RBI) has said that it will infuse Rs 12,500 crore of liquidity into the system through purchase of government bonds (G-sec). The Central bank would purchase five government bonds under open market operations (OMOs) on June 20, 2019.

RBI in its release said based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of five government securities under OMOs. The Central bank would buy 7.94 per cent-2021; 7.72 per cent-2025; 6.79 per cent-2027; 7.61 per cent-2030 and 7.73 per cent-2034 government bonds under the OMO.

The eligible participants should submit their offers in electronic format on the RBI Core Banking Solution (E-Kuber) system on June 20. Recently, on June 11, the RBI had infused Rs 15,000 crore into the system through OMO purchase of six government bonds. The RBI uses OMO for injecting liquidity into the system through the purchase of G-sec. The sale or buying of G-secs infuses or reduces liquidity.

The CNX Nifty is currently trading at 11774.55, up by 83.05 points or 0.71% after trading in a range of 11740.20 and 11802.50. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.69%, Hindalco up by 3.13%, Indiabulls Housing Finance up by 2.45%, Kotak Mahindra Bank up by 2.23% and Vedanta was up by 2.23%. On the flip side, Indian Oil Corporation down by 1.11%, Wipro down by 1.04%, Hero MotoCorp down by 0.86%, Bharti Infratel down by 0.67% and BPCL down by 0.57% were the top losers.

All the Asian markets were trading higher; Hang Seng increased 651.56 points or 2.37% to 28,150.33, Nikkei 225 surged 351.36 points or 1.68% to 21,324.07, Taiwan Weighted strengthened 140.26 points or 1.33% to 10,707.00, Jakarta Composite soared 54.77 points or 0.88% to 6,312.10, Shanghai Composite rose 43.48 points or 1.5% to 2,933.64, Straits Times advanced 41.03 points or 1.27% to 3,279.76 and KOSPI was up by 24.03 points or 1.14% to 2,122.74.