Barometer gauges maintain gains in early noon deals

Indian equity markets maintained their upward momentum in the early noon session, following gains in Telecom, Healthcare and Power stocks. Healthy buying was observed in blue-chip stocks like Indusind Bank, Bajaj Auto and Axis Bank. Support came with Finance minister Nirmala Sitharaman’s statement that the direct tax collection target for the current fiscal is ‘eminently achievable’ given that the mop-up has nearly doubled in the last five years. Some comfort also came with a private report stating that the Centre is looking at a foreign currency bond sale in October to raise a one-time amount of $10 billion (about Rs 68,000 crore). Currencies being considered for the same include the yen and euro for their lower yields or the dollar due to liquidity. Meanwhile, a private report said that India’s GDP is expected to grow at 6.8 per cent in FY20, making it a second straight year of sub-7% expansion. In FY19 too, the economy grew at a rate of 7%.

On the global front, Asian markets were trading mostly in green, driven by expectations the European Central Bank and the Federal Reserve will soon lower borrowing costs. Back on street, in scrip specific developments, shares of Shriram Transport Finance edged up on reporting 11% rise in Q1 net profit. Besides, PI Industries surged on posting 24% rise in Q1 consolidated net profit.

The BSE Sensex is currently trading at 37970.84, up by 123.19 points or 0.33% after trading in a range of 37869.55 and 38169.87. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.42%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Telecom up by 1.37%, Healthcare up by 0.89%, Power up by 0.56%, Utilities up by 0.55% and Bankex was up by 0.52%, while Metal down by 0.86%, Energy down by 0.73%, PSU down by 0.36%, Auto down by 0.24% and Oil & Gas was down by 0.20% were few the losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.78%, Bajaj Auto up by 1.35%, Axis Bank up by 1.32%, HDFC Bank up by 1.28% and Sun Pharma was up by 1.21%. On the flip side, Tech Mahindra down by 1.34%, Tata Motors down by 1.29%, Tata Motors - DVR down by 1.11%, Maruti Suzuki down by 1.07% and Tata Steel was down by 1.00% were the top losers.

Meanwhile, the Economic Advisory Council to the Prime Minister (EAC-PM) in its report titled 'R&D Expenditure Ecosystem' has said that the growth in Research and development (R&D) expenditure should be commensurate with the country’s Gross domestic product (GDP) growth and should be targeted to reach at least 2 percent of GDP by the year 2022. It noted that the line ministries at the Centre could be mandated to allocate certain percentage of their budget for research and innovation for developing and deploying technologies as per the priorities of the respective ministries.

The report has pointed out that India's spending on R&D in terms of percentage of GDP has remained stagnant over the last two decades. It has remained constant at around 0.6 percent to 0.7 percent of GDP and this is well below that in major nations such as the US (2.8), China (2.1), Israel (4.3) and Korea (4.2). To ensure that India leaps into a leadership role in innovation and industrial R&D by stimulating private sector's investment in R&D from current 0.35 percent of GDP, it suggested that a minimum percentage of turn-over of the company may be invested in R&D by medium and large enterprises registered in India.

EAC-PM also recommended that to help and keep the industry enthused to invest in R&D, there is case for not enforcing the complete withdrawal of weighted deduction provisions on R&D investment by April 1, 2020. Noting that government expenditure on R&D is undertaken almost entirely by the central government, it said there is a need for greater participation of state government and private sector in overall R&D spending. Besides, it pitched for creating 30 dedicated R&D Exports Hub and a corpus of Rs 5,000 crore for funding mega projects with cross cutting themes which are of national interest.

The CNX Nifty is currently trading at 11308.85, up by 37.55 points or 0.33% after trading in a range of 11274.90 and 11361.40. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 3.78%, Bharti Infratel up by 3.71%, Cipla up by 3.12%, Zee Entertainment up by 1.50% and Dr. Reddys Lab was up by 1.38%. On the flip side, Coal India down by 1.59%, Tech Mahindra down by 1.47%, Tata Motors down by 1.42%, Mahindra & Mahindra down by 1.14% and Reliance Industries was down by 1.04% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 71.92 points or 0.25% to 28,595.96, Nikkei 225 surged 55.99 points or 0.26% to 21,765.56, Straits Times advanced 10.00 points or 0.3% to 3,378.44, Shanghai Composite gained 4.17 points or 0.14% to 2,927.45, Jakarta Composite soared 15.59 points or 0.24% to 6,400.58 and Taiwan Weighted was up by 2.42 points or 0.02% to 10,938.18. On the flip side, KOSPI was down by 9.72 points or 0.47% to 2,072.58.