Local equities gather some pace in morning deals

Local equity markets added gains to trade in green in the morning session on account of buying in front line counters. Barring Consumer Durables and banking stocks, there was buying across all sectoral indices. Among heavy-weights HCL Tech, Bharti Airtel and Tata Motors - DVR exhibited a smart performance. Traders took some solace with a report that Reserve Bank of India (RBI) slashed the repo rate by 35 basis points, India Inc. said its swift and full transmission by banks in the form of lower lending rates will be crucial to lift consumption and investment in the economy. Some optimism also came in with India Meteorological Department (IMD) data showing that India received 28% more rainfall than the 50-year average in the week to August 7, easing concerns of drought. Monsoon rains are crucial for farm output and economic growth, as agriculture forms about 15% of India's $2.5-trillion economy. On the sectoral front, power stocks were in focus, as Central Electricity Authority (CEA) data showed that fresh capacity addition in power has started on a sombre note. Out of the 1820 Mw envisaged to be added during April-June of this fiscal year, only 45 Mw has been added in thermal power generation.

On the global front, Asian markets were trading mostly higher, on bargain-hunting by investors following a week of heavy losses due to anxiety over the deepening US-China trade war. Back home, the Reserve Bank of India (RBI) in its latest survey report has stated that consumer confidence declined in July as reflected in the current situation index (CSI); the future expectations index (FEI) fell by about 4 points.

The BSE Sensex is currently trading at 36802.56, up by 112.06 points or 0.31% after trading in a range of 36655.41 and 36903.81. 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 0.16%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Telecom up by 2.35%, TECK up by 1.08%, Realty up by 0.95%, IT up by 0.90% and Energy was up by 0.87%, while Consumer Durables down by 0.19% and BANKEX was down by 0.16% were the only losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 3.84%, Tata Motors - DVR up by 3.00%, Bharti Airtel up by 2.38%, Tata Motors up by 1.96% and Hero MotoCorp was up by 1.36%. On the flip side, IndusInd Bank down by 3.09%, Tata Steel down by 3.09%, Axis Bank down by 1.21%, HDFC down by 0.93% and Asian Paints was down by 0.87% were the top losers.

Meanwhile, with a view to ease liquidity pressure in non-banking financial companies (NBFCs), the Reserve Bank of India (RBI) has allowed banks’ lending to NBFCs for on-lending to agriculture, micro and small enterprises, and housing to be classified as priority sector lending, up to specified limits. The RBI raised any bank’s exposure limit to a single NBFC from the existing 15 per cent to 20 per cent of tier-1 capital.

It said that Banks’ lending to NBFCs for on-lending to agriculture up to Rs 10 lakh a borrower will be treated as priority sector lending. So, too, for loans up to Rs 20 lakh for micro and small enterprises and housing. This has been done to increase the credit flow to certain sectors which contribute significantly to economic growth in terms of export and employment, and recognising the role played by NBFCs in providing credit to these.

Besides, in the Union Budget, the government aimed to encourage public sector banks to buy high-rated pooled assets of up to Rs 1 trillion of financially sound NBFCs. For which, it said, it would give a one-time and six-month partial credit guarantee for the first loss of up to 10 per cent.

The CNX Nifty is currently trading at 10894.75, up by 39.25 points or 0.36% after trading in a range of 10842.95 and 10915.70. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 3.82%, Bharti Infratel up by 2.36%, Bharti Airtel up by 2.24%, Hindalco up by 2.18% and JSW Steel was up by 1.88%. On the flip side, Cipla down by 3.24%, IndusInd Bank down by 2.77%, Tata Steel down by 2.71%, Indiabulls Housing Finance down by 1.70% and Axis Bank was down by 1.41% were the top losers.

Asian markets were trading mostly higher, Hang Seng increased 143.61 points or 0.55% to 26,140.64, Taiwan Weighted strengthened 98.17 points or 0.95% to 10,484.35, Nikkei 225 surged 78.91 points or 0.38% to 20,595.47, Jakarta Composite soared 49.22 points or 0.79% to 6,253.42, Shanghai Composite gained 25.24 points or 0.91% to 2,793.92 and KOSPI was up by 17.79 points or 0.93% to 1,927.50. On the other side, Straits Times was down by 13.66 points or 0.43% to 3,171.03.