Markets trade in fine-fettle in early deals; Nifty reclaims 11,250 mark

Indian equity benchmarks opened in green territory and are trading in fine-fettle in early deals on Tuesday with Sensex and Nifty recapturing their crucial 37,900 and 11,250 levels, respectively. Sentiments got a boost with SBI Ecowrap report stating that India has benefited from the US-China trade war by exporting more items to China. Overall exports to the US grew 9.46 per cent to $52.4 billion in 2018-19, for China the growth was 25.6 per cent to $16.7 billion. Adding optimism among market participants with a report that Finance Minister Nirmala Sitharaman called for a significant reduction in the central bank's policy rates and said the government did not intend to review the budget proposal for overseas sovereign borrowings. The minister also said the increase in surcharge on foreign portfolio investments (FPI) was not intended to hurt investors. However, upside remained limited with CARE Ratings report that India is staring at a rise in food inflation soon, as weak monsoon rainfall hits the country’s food output. It said the retail inflation in the food components for June 2019 has risen to 13-months high and weak progress going ahead could push food inflation higher.

Global cues also remained supportive with most of the Asian markets trading in green at this point of trade as investors awaited developments from US-China trade talks this week in Shanghai. Besides, the Bank of Japan kept monetary policy steady on Tuesday but said that it will not hesitate to take additional easing measures if the economy loses momentum toward achieving the target inflation rate of 2%. The Japanese central bank also said it intends to maintain the current extremely low levels of short- and long-term interest rates for an extended period of time, at least through around spring 2020.

Back home, on the sectoral front, banking stocks exhibiting mixed trend amid Moody’s report that even as more and more crippled banks come out of the dud asset tunnel, the heightening growth slowdown and the lingering crisis at non-banking lenders pose fresh challenges to their asset quality. In scrip specific development, INOX Leisure gained on partnering with Bhumika Group. However, Coffee Day Enterprises plunged around 20% to hit the lower circuit limit of Rs 154.05 on the BSE amid reports that VG Siddhartha, the founder of the country's largest coffee chain, has been missing since Monday night.

The BSE Sensex is currently trading at 37910.73, up by 224.36 points or 0.60% after trading in a range of 37690.43 and 37911.92. There were 25 stocks advancing against 5 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.52%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.43%, Metal up by 1.34%, Basic Materials up by 0.94%, Capital Goods up by 0.91%, Telecom up by 0.91%%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.26%, Tata Steel up by 1.79%, Bharti Airtel up by 1.76%, Sun Pharma up by 1.47% and Tata Motors up by 1.42%. On the flip side, Hero MotoCorp down by 0.57%, Kotak Mahindra Bank down by 0.35%, NTPC down by 0.20%, ITC down by 0.09% and Hindustan Unilever down by 0.09% were the top losers.

Meanwhile, amid US-China trade war, State Bank of India (SBI) Ecowrap report stated that India has benefited from the this trade war by exporting more items to US and China. It said the country’s exports to China post the trade war, have grown much faster than that to the US. Overall exports to the US grew 9.46 per cent to $52.4 billion in 2018-19, for China the growth was 25.6 per cent to $16.7 billion. As per the report, looking at the products on which China and USA have imposed tariffs on each other, India has made modest gains in capturing such market.

The textile imports, particularly, of the US has shifted from China towards other countries in South Asia. Instead, cotton imports from the US to China declined for the first half 2019 compared to the same period of the previous year, while imports from other countries, including Brazil, Australia and India have increased. Thus, the report said India has benefited from US-China trade war by exporting more to China like plastic, cotton, inorganic chemicals and fish. Besides, the country has a revealed comparative advantage in some of these commodities.

In order to further boost exports, the report pointed out that easy availability of credit is of paramount importance. It added that certain measures including extension of 'Interest Equalization Scheme' to all categories of exporters and end to end digitization of the export process among others should aid India’s export credit growth. 

The CNX Nifty is currently trading at 11259.10, up by 69.90 points or 0.62% after trading in a range of 11190.70 and 11262.35. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.65%, Grasim Industries up by 2.19%, Bharti Airtel up by 2.12%, Cipla up by 1.98% and Tata Steel up by 1.93%. On the flip side, Bharti Infratel down by 1.19%, Hero MotoCorp down by 0.86%, Kotak Mahindra Bank down by 0.28%, Indian Oil Corporation down by 0.18% and NTPC down by 0.16% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 gained 64.41 points or 0.30% to 21,681.21, Straits Times strengthened 5.67 points or 0.17% to 3,352.06. Hang Seng gained 95.63 points or 0.34% to 28,202.04, Kospi advanced 9.45 points or 0.47% to 2,038.93, Jakarta Composite gained 37.54 points or 0.60% to 6,336.58 and Shanghai Composite soared 19.17 points or 0.65% to 2,960.18. On the flip side, Taiwan Weighted was down by 34.42 points or 0.32% to 10,851.31.