Markets maintain gaining momentum in early noon session

Indian stock markets continued to trade in positive terrain in early noon session with Sensex and Nifty trading above 39700 and 11850 levels respectively. Most of the sectoral indices were trading firm and Realty was the top gainer on BSE, up by around 1.89% followed by Auto and Capital Goods indices, trading at 1.27% and 0.77% respectively. Apart from blue chips, broader indices too equally participated in the rally. There was encouragement with a private report that the government can look at issuing infrastructure bonds via a special purpose vehicle (SPV), which could mop up over Rs 95,000 crore or 0.5 percent of GDP, as it looks for means to push growth. On global front, Asain markets were trading in green as investors await the meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G-20 summit. Back on streets, on sectoral front, defance stocks remained in focus as India's defence industry received foreign direct investment (FDI) of a meagre USD 2.18 million during 2018-19. As per the current policy, foreign investment beyond 49 per cent is permitted through the approval route in the defence sector. The FDI limit for the defence sector has also been made applicable to the manufacturing of small arms and ammunition covered under Arms Act, 1959.

The BSE Sensex is currently trading at 39762.18, up by 170.10 points or 0.43% after trading in a range of 39633.88 and 39762.73. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.39%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Realty up by 1.89%, Auto up by 1.27%, Capital Goods up by 0.77%, Industrials up by 0.76%, Consumer Discretionary was up by 0.72%, while Energy down by 0.17%, TECK down by 0.04% and IT down by 0.03% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 1.91%, Mahindra & Mahindra up by 1.88%, Tata Motors up by 1.80%, Axis Bank up by 1.51% and Hindustan Unilever was up by 1.36%. On the flip side, Tech Mahindra down by 1.82%, Power Grid down by 1.17%, Bharti Airtel down by 0.84%, Yes Bank down by 0.71% and Reliance Industries was down by 0.54% were the top losers.

Meanwhile, eminent economist Arvind Panagariya has said that the heightening trade tensions between the United States (US) and China is a great time for India to begin attracting the large multinationals that are now looking for alternative locations. He strongly called for India to slash tariffs on imported motorcycles and automobiles through give and take negotiations with the US.

Panagariya has stated that as the large multinationals are coming out of China, so it is an opportune time for India to do whatever it will take to bring these multinationals to Indian shores. He also said that their wages have gone up and the trade war with the US has begun to close the access of the multinationals in the US market in a big way. He stressed that the US was asking India to open up its markets. He also said “It is a good thing for India. I would open it unilaterally, but here is an opportunity to actually negotiate with the US. Give them something and get something in return.”

Eminent economist further called for undertaking labour law and land acquisition reforms to make them more flexible to attract the multinationals.  He also emphasized that rather than using tariffs, India can use the exchange rate to its advantage. He also said “let the rupee depreciate a bit, it will open the door for your exporters, while it also compensates for the tariff liberalisation. This is exactly what we did in the 1990s.” He felt that this will help make Indian goods much more attractive and boost exports.

The CNX Nifty is currently trading at 11893.40, up by 45.85 points or 0.39% after trading in a range of 11859.45 and 11896.45. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 2.74%, Mahindra & Mahindra up by 2.05%, Tata Motors up by 1.92%, Bharti Infratel up by 1.64% and Axis Bank was up by 1.51%. On the flip side, Tech Mahindra down by 1.87%, UPL down by 1.44%, Adani Ports &Special down by 1.04%, Bharti Airtel down by 1.01% and Dr. Reddys Lab was down by 0.87% were the top losers.

All Asian markets were trading in green; Shanghai Composite gained 23.42 points or 0.79% to 2,999.70, KOSPI rose 13.95 points or 0.66% to 2,135.80, Nikkei 225 surged 216.13 points or 1.02% to 21,302.72, Straits Times advanced 21.41 points or 0.65% to 3,322.66, Taiwan Weighted strengthened 121.35 points or 1.14% to 10,773.90, Hang Seng increased 289.88 points or 1.03% to 28,511.86 and Jakarta Composite was up by 37.00 points or 0.59% to 6,347.49.