Benchmarks trade in fine fettle in early deals

Indian equity benchmarks have made an optimistic start and are now trading with gain of around half a percent amid positive global cues. Sentiment got boost with the report that foreign direct investment (FDI) equity inflows rose 28% in the first quarter of 2019-20 to $16.3 billion from $12.7 billion in the year-ago period. Singapore continued to be the top source of FDI at $5.3 billion, followed by Mauritius ($4.6 billion). The broader indices were also trading in green. Traders also got some support with report that a top advisory body on external trade will meet next week to discuss issues related to export promotion, domestic manufacturing and competitiveness in the wake of a fall in exports of traditional, employment-generating sectors such as gems and jewellery, leather, handloom and cotton yarn and fabrics. The commerce and industry minister chaired Board of Trade (BoT), which advises the government on foreign trade policy (FTP), will meet on September 12.

On the global front, all the Asian markets were also trading in green in early deals on Thursday as apparent progress in the political crises in Britain and Hong Kong gave investor confidence a shot in the arm, with easing fears of a hard Brexit lifting the battered pound. The US markets ended higher on Wednesday following the release of the Federal Reserve's Beige Book, which said the US economy expanded at a modest pace through the end of August.

Back home, the banking stocks remained in focus with report that the Reserve Bank of India (RBI) has made it mandatory for banks to link all new floating-rate loans for housing, auto and MSMEs to external benchmark like repo from October 1, a move aimed at ensuring faster transmission of policy rate cuts to borrowers. In scrip specific developments, Wipro gained on securing $300 million deal from ICICI Bank and NMDC rose after producing 1.41 MT of iron ore in August.

The BSE Sensex is currently trading at 36886.34, up by 161.60 points or 0.44% after trading in a range of 36752.98 and 36888.32. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.33%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Metal up by 3.09%, Oil & Gas up by 1.73%, Power up by 1.63%, PSU up by 1.59% and Utilities was up by 1.52%, while Telecom down by 0.39% and Realty was down by 0.21% were the only losing indices on BSE.

The top gainers on the Sensex were ONGC up by 4.62%, Vedanta up by 3.44%, Tata Steel up by 3.42%, NTPC up by 3.14% and Tata Motors up by 2.37%. On the flip side, ICICI Bank down by 1.13%, HDFC down by 1.10%, Bharti Airtel down by 0.87%, Hindustan Unilever down by 0.46% and HCL Tech down by 0.43% were the top losers.

Meanwhile, domestic rating agency Crisil has cut India’s current financial year (FY20) Gross domestic products (GDP) growth forecast to 6.3% from its earlier forecast of 6.9%. The agency said that lower GDP growth forecast corroborates that India’s economic slowdown is deeper and more broad-based than suspected. The downward review comes days after GDP growth slowed down to a 25-quarter low of 5% in the June quarter which significantly is even lower than Pakistan’s 5.4 percent growth and is due to the slump in private consumption and a near stalling of manufacturing activities.

It said that A plunge in domestic private consumption demand, slump in manufacturing, halving of merchandise exports growth, and a high-base effect from last year have gnawed away at first-quarter growth. Private consumption growth - the bulwark of India’s growth story in recent years - registered a scant 3.1% in the first quarter, a four-year low.

The last couple of times private consumption fell this sharply was in the first quarter of fiscal 2013 (-0.9%) and third quarter of fiscal 2015 (2.1%), as per the new GDP series. It said in the past few years, households had dipped into their savings and leveraged themselves to support private consumption though, first quarter data shows, they have not been able to sustain the momentum. It added that given the twin trouble of slack private consumption and manufacturing the remaining quarters are unlikely to over reach to take the full year number to its earlier forecast of 6.9%.

The CNX Nifty is currently trading at 10893.00, up by 48.35 points or 0.45% after trading in a range of 10858.80 and 10908.80. There were 41 stocks advancing against 8 stocks declining on the index, while 1 stock remain unchanged on the index on the index.

The top gainers on Nifty were ONGC up by 5.08%, NTPC up by 4.14%, Coal India up by 3.90%, Tata Steel up by 2.83% and Vedanta up by 2.78%. On the flip side, ICICI Bank down by 1.48%, HDFC down by 1.42%, Bharti Airtel down by 1.21%, Hindustan Unilever down by 0.57% and SBI down by 0.35% were the top losers.

Asian markets were trading in green; Nikkei 225 gained 465.18 points or 2.25% to 21,114.32, Straits Times strengthened 14.95 points or 0.48% to 3,145.52. Hang Seng gained 101.02 points or 0.38% to 26,624.25, Taiwan Weighted increased by 88.52 points or 0.83% to 10,745.83, Kospi advanced 22.93 points or 1.15% to 2,011.46 , Shanghai Composite soared 46.03 points or 1.56% to 3,003.44 and Jakarta Composite was up by 34.23 points or 0.55% to 6,303.89.