Local equities pare gains to trade flat

Local equity benchmarks pared most of their gains to trade flat in the morning deals following weakness in metal stocks amid US-China trade war concerns. Traders took note of former president Pranab Mukherjee’s statement that the government’s ambitious target of becoming a $5-trillion economy by 2024-25 is possible through prudent fiscal management. He added the GST needs more clarity and that some signs of a slowdown in the economy were visible since last year, leading to a lower GDP growth rate. However, traders took some support with Industry body CII report that the multi-sectoral and multi-dimensional policy stimulus will have significant impact, imparting stability and underpinning a new growth impetus for India. The measures announced come at a time when the world economy is buffeted by global headwinds and trade slowdown. Some solace came with a report that the government clarified that enhanced surcharge has been withdrawn for foreign portfolio investors on capital gains in both the equity and derivatives segments. Besides, addressing a group of NRI business community in the UAE capital Abu Dhabi, Prime Minister Narendra Modi stated that ‘political stability and predictable policy framework’ makes India an ‘attractive’ investment destination.

On the global front, Asian markets were trading in red as the trade war between the US and China heated up. President Donald Trump raised tensions by announcing he would raise tariffs on $250 billion of Chinese goods to 30% from 25% starting October 1. Back home, Federation of Indian Export Organisations (FIEO) stated that it is expecting a strong flow of exports from eastern India, especially in the iron and steel sector. Gems and jewellery, iron and steel, petroleum and marine products occupied some of the top segments with regards to exports from West Bengal.

The BSE Sensex is currently trading at 36710.43, up by 9.27 points or 0.03% after trading in a range of 36492.65 and 37363.95. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.05%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.51%, Capital Goods up by 0.30%, BANKEX up by 0.19%, Industrials was up by 0.18% and FMCG was up by 0.17%, while Metal down by 4.47%, Basic Materials down by 1.63%, Telecom down by 0.94%, Auto down by 0.88%, TECK was down by 0.74% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.17%, Bajaj Finance up by 1.34%, SBI up by 1.05%, Axis Bank up by 0.93% and ITC was up by 0.85%. On the flip side, Tata Steel down by 6.24%, Vedanta down by 4.18%, Hero MotoCorp down by 2.44%, Tata Motors - DVR down by 2.29% and Yes Bank was down by 2.11% were the top losers.

Meanwhile, Moody's Investors Service in its latest report has revised downwards India's Gross domestic product (GDP) growth forecast to 6.2% for 2019 calendar year. The GDP growth forecast for current year was revised downwards from its previous estimation of 6.8%. The same for 2020 was also lowered by a similar 0.6 percentage points to 6.7%. Indian economy had expanded by 6.9% in 2017 and 7.4% in 2018.

It mentioned that while not heavily exposed to external pressures, India's economy remains sluggish on account of a combination of factors, including weak hiring, financial distress among rural households, and tighter financing conditions on account of stress among non-bank financial institutions. Stating that domestic factors have had a greater influence on growth in India, it said the moderation in business sentiment and slow flow of credit to corporates contributed to weaker investment in the country.

Besides, it stated inflation is expected to rise to 3.7% this year and 4.5% in the next from 2.9% in 2018. It added Reserve Bank of India (RBI) has been most active in cutting rates in support of growth, but lingering financial sector issues may blunt the effectiveness of the monetary stimulus.

The CNX Nifty is currently trading at 10827.95, down by 1.40 points or 0.01% after trading in a range of 10756.55 and 11000.55. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were HDFC up by 2.09%, Indiabulls Housing Finance up by 1.68%, Bajaj Finance up by 1.55%, Adani Ports & SEZ up by 1.35% and Bajaj Finserv was up by 1.33%. On the flip side, Tata Steel down by 6.14%, JSW Steel down by 5.96%, Hindalco down by 4.16%, Vedanta down by 3.75% and Coal India was down by 2.66% were the top losers.

Asian markets were trading in red, Hang Seng decreased 803.67 points or 3.07% to 25,375.66, Nikkei 225 slipped 480.23 points or 2.32% to 20,230.68, Taiwan Weighted dropped 151.46 points or 1.44% to 10,386.65, Jakarta Composite lost 61.71 points or 0.99% to 6,193.89, Straits Times trembled 51.14 points or 1.64% to 3,059.21, KOSPI fell 31.19 points or 1.6% to 1,917.11 and Shanghai Composite was down by 27.62 points or 0.95% to 2,869.81.