Markets trade slightly in green in early deals

Indian equity benchmarks are trading marginally in green in early deals on Wednesday as traders took some support with Finance Minister Nirmala Sitharaman’s statement that total bad loans of commercial banks declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore in the 2018-19 fiscal on the back of steps taken by the government. The government has instituted a comprehensive 4R’s strategy for recognition of non-performing assets (NPAs) transparently, resolution and recovery of value from stressed assets, recapitalising of public sector banks (PSBs) and reforms in PSBs so as to reduce their bad loans. However, gains remain capped with Chief Economic Advisor K V Subramanian’s statement that there is a need to tap foreign capital to accelerate growth from the current level of 7 per cent to 8 per cent. He added that achieving $5-trillion economy by 2024-25 is possible although the goal is slightly stretched.

On the global front, all the Asian markets are trading in red at this point of time following overnight developments on the US-China trade front. The US markets settled lower on Tuesday after President Donald Trump said an agreement with China on trade tariffs has a long way to go.

Back home, the retail sector stocks remained in focus with Commerce and industry minister Piyush Goyal statement that India’s foreign direct investment (FDI) norms in the multi-brand retail sector are a very well thought out policy which are unlikely to change any time soon. Solar stocks remained buzzing on report that a total of 80.46 GW of renewable energy capacity has been installed in the country as on June 30, 2019 which includes 29.55 GW from Solar & 36.37 GW from Wind power.

The BSE Sensex is currently trading at 39141.60, up by 10.56 points or 0.03% after trading in a range of 39081.14 and 39196.07. There were 12 stocks advancing against 19 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 0.13%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.61%, Healthcare up by 0.18%, FMCG up by 0.16%, Consumer Discretionary Goods & Services up by 0.14% and Realty was up by 0.14%, while Auto down by 0.31%, Utilities down by 0.19%, Telecom down by 0.13%, IT down by 0.08% and Power was down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.47%, Tech Mahindra up by 1.40%, Asian Paints up by 1.08%, Bajaj Finance up by 0.83% and HCL up by 0.82%. On the flip side, Tata Motors - DVR down by 1.11%, Tata Motors down by 1.09%, Maruti Suzuki down by 0.63%, Hero MotoCorp down by 0.57% and TCS down by 0.47% were the top losers.

Meanwhile, in order to accelerate growth to 8 percent, Economic Adviser (CEA) Krishnamurthy Subramanian has said that India needs to encourage foreign capital.  He mentioned that apart from sovereign bond issue, India also needs to be tapping into foreign capital to trigger this virtuous cycle. Once this virtuous cycle is triggered, then other parts start moving, then the country get investment with enhanced productivity, exports and jobs, which leads to demand and thereby creates investment again. It is this triggering which is actually important. In budget, the Finance Minister announced that India would issue sovereign bonds in the global market in foreign currencies.

Although, Subramanian stated that the goal is a bit of a stretch, achieving $5 trillion economy by 2024-25 is possible. The Indian economy reached to the level of $1 trillion in 55 years and added $1 million in last 5 years to $2.75 trillion by March 2019.

Besides, talking about bank mergers, he said that mergers are being done based on synergies and the policy on it is to exploit the economies of scale. He added ‘That's the intent behind the merger. Rather than any top down strategy or mandate which says we need to have four banks, this should be based on looking at banks that might combine very well because of synergies.’

The CNX Nifty is currently trading at 11667.80, up by 5.20 points or 0.04% after trading in a range of 11651.15 and 11685.60. There were 23 stocks advancing against 26 stocks declining on the index, while one stock remains unchanged on the index.

The top gainers on Nifty were UPL up by 2.97%, Zee Entertainment up by 1.99%, Kotak Mahindra Bank up by 1.65%, Tech Mahindra up by 1.26% and HCL Technologies up by 0.84%. On the flip side, GAIL India down by 1.56%, Tata Motors down by 1.41%, Maruti Suzuki down by 0.81%, Hero MotoCorp down by 0.71% and Cipla was down by 0.54% were the top losers.

All the Asian counters are trading in red; Nikkei 225 declined 87.81 points or 0.41% to 21,457.36, Straits Times shed 4.71 points or 0.14% to 3,355.32, Hang Seng 87.84 points or 0.31% to 28,531.78, Taiwan Weighted tumbled 68.34 points or 0.63% to 10,817.71, KOSPI decreased 19.96 points or 0.95% to 2,071.91, Jakarta Composite slipped 18.00 points or 0.28% to 6,383.88 and Shanghai Composite was down by 1.58 points or 0.05% to 2,936.04.