Local equities wipe out losses to turn positive

Local benchmarks wiped out all the early losses to turn positive in morning session, following a report that government is likely to sign off on FPI surcharges rollback soon. Metal, TECK and IT counters were on the priority list of the buyers. Traders took some solace with Niti Aayog Vice Chairman Rajiv Kumar’s statement that the government is considering a number of measures which will be taken at an appropriate time to deal with financial stress and unleash animal spirit in the economy. Some positivity came in with a report that External Affairs Minister S Jaishankar and his Nepalese counterpart Pradeep Gyawali have reviewed bilateral ties with special focus on connectivity and economic partnership. However, some concerns remained among traders with a report that amid a persisting economic slowdown, consumer confidence has fallen and pessimism prevails for spending, investment, and jobs. With a drop of 3.1% in August 2019. Besides, a report that Chief Economic Adviser (CEA) Krishnamurthy Subramanian virtually ruled out a major stimulus package for the economy, saying profit is private, losses are public is not good economics.

On the global front, Asian markets were trading mixed, as investors awaited Federal Reserve Chairman Jerome Powell's speech for clues on whether the US central bank will cut interest rates in the future. Back home, ICRA reported that India’s gross domestic product (GDP) growth rate at 5.5-6 percent in the first quarter (April-June) of the fiscal year 2019-20. The country’s economy accelerated to 8.2% during the same quarter of the previous year, on the back of a strong core performance and a healthy base.

The BSE Sensex is currently trading at 36514.98, up by 42.05 points or 0.12% after trading in a range of 36102.35 and 36551.99. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.40%, while Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were Metal up by 1.21%, TECK up by 1.06%, IT up by 1.06%, PSU up by 1.03% and Oil & Gas was up by 0.89%, while FMCG down by 0.62%, BANKEX down by 0.35% and Consumer Disc was down by 0.02% were the few losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 5.42%, Vedanta up by 2.94%, Tata Steel up by 2.10%, TCS up by 1.62% and Mahindra & Mahindra was up by 1.57%. On the flip side, IndusInd Bank down by 1.40%, ITC down by 1.10%, Maruti Suzuki down by 1.08%, ICICI Bank down by 0.98% and Kotak Mahindra Bank was down by 0.94% were the top losers.

Meanwhile, with an aim to simplify procedures for exporters and importers besides providing incentives to boost outbound shipments, the commerce ministry will soon come out with a new foreign trade policy. The new policy is likely to be announced by September-end or early-October. The ministry is giving final touches to the new policy as the validity for the old one will end on March 31, 2020.  The new foreign trade policy will provide guideline and incentives for increasing exports, for the next five financial years 2020-25.

The ministry's arm directorate general of foreign trade (DGFT) is formulating the policy. At present, tax benefits are provided under merchandise export from India scheme (MEIS) for goods and services export from India scheme (SEIS). In the new policy, changes are expected in the incentives given to goods as the current export promotion schemes are challenged by the US in the dispute resolution mechanism of the World Trade Organisation (WTO).

In this backdrop, the government is recasting the incentives to make them compliant with global trade rules, being formulated by Geneva-based WTO, a 164 member Geneva-based multilateral body. The commerce ministry has also floated a cabinet note for a new export incentives scheme -- Rebate of State and Central Taxes and Levies (RoSCTL) -- that would be compliant with the WTO norms. The new scheme would replace the existing MEIS, which was challenged by the US last year in the WTO. It would ensure refund of all un-rebated central and state levies and taxes imposed on inputs that are consumed in exports of all sectors.

The CNX Nifty is currently trading at 10787.50, up by 46.15 points or 0.43% after trading in a range of 10637.15 and 10789.90. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 5.68%, Indiabulls Housing Finance up by 4.73%, Vedanta up by 3.22%, UPL up by 3.04% and Zee Entertainment was up by 2.52%. On the flip side, ITC down by 1.02%, Eicher Motors down by 1.02%, IndusInd Bank down by 0.95%, Maruti Suzuki down by 0.95% and Bharti Infratel was down by 0.75% were the top losers.

Asian markets were trading mixed, Straits Times trembled 10.93 points or 0.35% to 3,116.81, Taiwan Weighted dropped 6.32 points or 0.06% to 10,523.46, Jakarta Composite lost 4.30 points or 0.07% to 6,234.95 and KOSPI was down by 1.89 points or 0.1% to 1,949.12.

On the other side, Shanghai Composite gained 13.70 points or 0.48% to 2,897.14, Nikkei 225 surged 67.72 points or 0.33% to 20,695.73 and Hang Seng was up by 136.68 points or 0.52% to 26,185.40.