Benchmark indices trade with modest gains

Key benchmark indices erased their initial losses and started trading with small gains in afternoon session, on the back of mostly positive trade in Asian equities. Traders took some support with Commerce Secretary Anup Wadhawan’s report that exports growth of the country in the current fiscal is likely to be in double digits despite the challenging situation both on the external and internal fronts. He added in the last financial year, growth in exports was between nine and 10% and the volume touched $331 billion. However, gains remain capped as anxiety remained among the local traders with SBI’s report which showed that the current economic slowdown can be attributed to a combination of structural and cyclical factors, in addition to global uncertainties. On the sectoral front, auto stocks remained in focus with the auto industry body Society of Indian Automobile Manufacturers’ (SIAM) statement that even if it is for a short period of time, just to kick start the industry, there should be a reduction in goods and services tax (GST) from 28 percent to 18 percent.

On the global front, Asian markets were trading mostly in green, after China announced plans that could help boost consumer spending. Back home, the BSE Sensex is currently trading at 37358.39, up by 46.86 points or 0.13% after trading in a range of 36974.41 and 37384.31. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.12%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Utilities up by 1.49%, Auto up by 0.97%, Power up by 0.97%, Bankex up by 0.70% and PSU up by 0.67%, while IT down by 0.99%, TECK down by 0.81%, Metal down by 0.34%, Healthcare down by 0.33% and Energy down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 5.68%, Maruti Suzuki up by 1.88%, Bajaj Finance up by 1.68%, Indusind Bank up by 1.45% and ITC up by 1.39%. On the flip side, TCS down by 2.03%, Vedanta down by 1.57%, HCL Tech down by 1.14%, Tata Motors - DVR down by 1.13% and Tech Mahindra down by 0.97% were the top losers.

Meanwhile, SBI in its latest research report 'Ecowrap’ has said that the present economic slowdown can be attributed to a combination of both structural and cyclical factors, apart from the global uncertainties. It noted that that there are clearly a host of structural factors that are holding back current consumption. It added that the country's economy is showing signs of slowdown, with hi-frequency indicators like industrial output posting subdued growth and automobile sales touching historical lows.

According to the report, a substantial decline in wage growth (both rural and urban wages) in recent times resulting in lower household savings (a result of conscious policy decisions to correct macro imbalances) has possibly slowed down the growth in real per capita income that is holding back demand. It also pointed out that the share of private sector has fell to 30 percent during 2015-19 from 50 percent during 2007-14 period in new project investments. It felt that a possible increase in current capacity utilisation (at 76.1 percent) can happen only if the sector-specific issues are simultaneously addressed to boost demand of bank credit.

About automobile sector slowdown, the report stated it is not restricted just to India, but the impact is felt across geographies with China also facing the impact of the auto slowdown. It also said the criticality of automobile sector can be gauged by a humongous 30 million employment on a per annum basis which it generates. Out of this more than 50 percent could be of contractual nature, hence the seriousness of the current auto slowdown.

The CNX Nifty is currently trading at 11038.30, up by 8.90 points or 0.08% after trading in a range of 10924.30 and 11050.30. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.77%, UPL up by 4.50%, GAIL India up by 3.04%, Grasim Industries up by 1.92% and Maruti Suzuki up by 1.87%. On the flip side, Indiabulls Housing Finance down by 6.47%, TCS down by 2.06%, Vedanta down by 1.74%, Dr. Reddys Lab down by 1.37% and Tech Mahindra down by 1.18% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 213.16 points or 0.84% to 25,708.62, Taiwan Weighted strengthened 93.76 points or 0.91% to 10,420.89, Jakarta Composite soared 21.22 points or 0.34% to 6,278.81, Nikkei 225 surged 13.16 points or 0.06% to 20,418.81 and Shanghai Composite gained 12.73 points or 0.45% to 2,828.53.

On the flip side, KOSPI fell 11.20 points or 0.58% to 1,927.17 and Straits Times trembled 17.82 points or 0.57% to 3,108.27.