Benchmarks trade with traction in early deals

Indian equity benchmarks have made an optimistic start and are trading with traction in early deals with frontline gauges recapturing their crucial 39,900 (Sensex) and 11,950 (Nifty) levels ahead of the release of Economic Survey report which will be tabled in Parliament later in the day. The survey prepared by Chief Economic Adviser Krishnamurthy Subramanian is likely to flag headwinds that the economy might face in its pursuit to become the world's fifth largest economy. Traders took some encouragement with commerce & industry minister Piyush Goyal’s statement that India will get additional $217 million of revenue from the retaliatory tariffs it imposed on 28 American products. Some support also came as the Union Cabinet approved the Code on Wages Bill which seeks to subsume existing laws related to workers remuneration and enable the Centre to fix minimum wages for the entire country. The Code on Wages is one of the four codes that would subsume 44 labour laws with certain amendments to improve the ease of doing business and attract investment for spurring growth.

Global cues too remained supportive with most of the Asian markets are trading in green at this point of time amid further comments on Chinese and European currency manipulation by President Donald Trump. The US markets ended in green on Wednesday as investor cheered the prospect of looser monetary policy at the world’s major central banks.

Back home, agriculture stocks remained in focus with the Union Cabinet giving its nod to hike the minimum support price (MSP) for kharif crops. MSP of paddy increased by Rs 65 per quintal, Jowar by Rs 120 per quintal and Ragi by Rs 253 per quintal. Telecom stocks remained buzzing with report that telecom operators need to be financially sound to build up infrastructure and there is a need to review the auction architecture as they cannot pay high prices for spectrum.

The BSE Sensex is currently trading at 39950.74, up by 111.49 points or 0.28% after trading in a range of 39858.33 and 39954.72. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.28%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Realty up by 0.70%, Bankex up by 0.60%, PSU up by 0.57%, Capital Goods up by 0.56% and Industrials was up by 0.40%, while Consumer Durables down by 0.57% and Metal down by 0.30% were the only losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.27%, Yes Bank up by 1.25%, SBI up by 1.05%, Indusind Bank up by 0.99% and Bajaj Finance was up by 0.70%. On the flip side, Tata Steel down by 1.81%, HCL Tech down by 1.04%, Sun Pharma down by 0.54%, Tech Mahindra down by 0.34% and Bajaj Auto was down by 0.32% were the top losers.

Meanwhile, with an aim to strengthen the corporate governance framework of core investment companies (CICs), the Reserve Bank of India (RBI) has constituted a six-member working group that will review the regulatory and supervisory framework for CICs. The working group is to be headed by Tapan Ray, non-executive chairman, Central Bank of India and former secretary, Ministry of Corporate Affairs. It added that the working group shall submit its report by October 31, 2019.

The terms of reference of the working group include examination of the current regulatory framework for CICs in terms of adequacy, efficacy and effectiveness of every component thereof and suggest changes therein. It will also assess the appropriateness of and suggest changes to the current approach of RBI towards registration of CICs including the practice of multiple CICs being allowed within a group. The working group will also suggest measures to strengthen corporate governance and disclosure requirements for CICs; assess the adequacy of supervisory returns submitted by CICs; and suggest appropriate measures to enhance RBI’s off-sight surveillance and on-site supervision over CICs.

In August 2010, RBI had introduced a separate framework for the regulation of systemically important CICs, recognising the difference in the business model of a holding company relative to other non-banking financial companies. Over the years, corporate group structures have become more complex involving multiple layering and leveraging, which has led to greater inter-connectedness with the financial system through their access to public funds.

The CNX Nifty is currently trading at 11949.60, up by 32.85 points or 0.28% after trading in a range of 11923.65 and 11953.15. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 3.71%, UPL up by 2.14%, Eicher Motors up by 1.66%, Yes Bank up by 1.25% and Kotak Mahindra Bank up by 1.21%. On the flip side, Tata Steel down by 1.73%, Titan Company down by 1.25%, HCL Tech down by 0.97%, Sun Pharma down by 0.61% and Bharti Infratel down by 0.60% were the top losers.

Most of the Asian markets are trading in green; Nikkei 225 gained 66.59 points or 0.31% to 21,704.75, Straits Times increased 4.58 points or 0.14% to 3,372.38, Taiwan Weighted gained 28.06 points or 0.26% to 10,771.83, Kospi rose 1.93 points or 0.09% to 2,097.61 and Jakarta Composite was up by 14.44 points or 0.23% to 6,377.06. On the flip side, Hang Seng slipped 30.94 points or 0.11% to 28,824.20 and Shanghai Composite was down by 8.05 points or 0.27% to 3,007.21.