Local equities continue to trade in green

Local equity benchmarks are trading in fine fettle in late morning session, with Sensex and Nifty garnering gains of around half a percent, tracking gains in Asian peers. Metal, Oil & Gas and PSU have elevated with gains on their respective front line stocks. Investors took comfort with a private report that 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. Traders also took note of a report that India invited Russian companies to invest in its oil refining and petrochemical projects as the two nations vowed to increase energy cooperation going beyond LNG supplies and stakes in Russian oil and gas fields. However, further gains remain capped as CRISIL has cut India’s GDP growth to 6.3% in FY20. The global rating agency said that a growth of 5% in the first quarter of the ongoing fiscal corroborates that India’s economic slowdown is deeper and more broad-based than suspected. Besides, India Ratings reported that foreign funds flow into India is expected to remain under pressure over the near-to-medium term despite the government rolling back tax surcharge on FPIs and benign global monetary policy stance.

On the global front, Asian markets were trading in green, after Chinese officials announced that they have agreed with the United States to hold another round of trade talks in Washington next month. Back home, on the sectoral front, Cement industry stocks remained in focus, as CRISIL Research report which stated that Cement demand growth will witness a mid-cycle slowdown to 5-5.5% on-year this fiscal, down sharply from 12% in fiscal 2019. Growth would be lower compared with even fiscal 2018, when it had printed 9%.

The BSE Sensex is currently trading at 36859.34, up by 134.60 points or 0.37% after trading in a range of 36752.98 and 36898.99. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.44%, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were Metal up by 3.54%, Oil & Gas up by 3.41%, PSU up by 3.36%, Power up by 3.21% and Utilities was up by 3.18%, while Realty down by 0.92%, Telecom down by 0.19%a and BANKEX was down by 0.06% were the few losing indices on BSE.

The top gainers on the Sensex were ONGC up by 7.39%, NTPC up by 6.57%, Tata Motors up by 4.11%, Tata Motors - DVR up by 4.00% and Tata Steel was up by 2.95%. On the flip side, HDFC down by 1.88%, ICICI Bank down by 1.42%, HCL Tech down by 1.01%, Hindustan Unilever down by 0.91% and Kotak Mahindra Bank was down by 0.67% were the top losers.

Meanwhile, Society of Indian Automobile Manufacturers (SIAM) President Rajan Wadhera has said that Auto industry, which has been witnessing continuous de-growth, is staring at a tough road ahead for the rest of the year due to transition to Bharat Stage Six (BS VI) vehicular emission norms by April 1, 2020 from BS IV. Calling it as a huge challenge, he said on an average, each vehicle manufacturer is investing close to Rs 1,000 crore to upgrade all of their model line-up to meet the new emission norm within a short span.

Wadhera further said the entire value chain of the auto industry - from component suppliers to vehicles manufacturers and dealers - have been impacted by the slowdown. He also said that new technologies coming into vehicle, which has to be done in a span of three years across all models and have defect free products is a huge challenge. In order to ensure a smooth transition, he noted that sales forecasting and operational efficiency has become important on account of the upcoming BS-IV to BS-VI transition.

SIAM President stated that while the dealers will be managing the front-end, original equipment manufacturers (OEMs) need to ensure that there should neither be loss of sales on account of unavailability of products nor allow inventory buildup or write-off which will create more hardships for the dealers. In the near future, he said the auto industry will not only have to deal with slowdown and BS-VI transition, but also has actually prepared for the future mobility - electric, connected and autonomous.

The CNX Nifty is currently trading at 10912.60, up by 67.95 points or 0.63% after trading in a range of 10858.80 and 10920.10. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were ONGC up by 7.65%, Coal India up by 7.44%, NTPC up by 6.53%, Indian Oil Corp. up by 5.77% and BPCL was up by 5.02%. On the flip side, HDFC down by 1.78%, ICICI Bank down by 1.40%, HCL Tech down by 1.03%, Hindustan Unilever down by 0.99% and Asian Paints was down by 0.62% were the top losers.

All Asian markets were trading in green; Nikkei 225 surged 515.47 points or 2.5% to 21,164.61, Hang Seng increased 84.45 points or 0.32% to 26,607.68, Taiwan Weighted strengthened 66.66 points or 0.63% to 10,723.97, Shanghai Composite gained 46.03 points or 1.56% to 3,003.44, Jakarta Composite soared 24.48 points or 0.39% to 6,294.14, KOSPI rose 23.98 points or 1.21% to 2,012.51 and Straits Times was up by 17.54 points or 0.56% to 3,148.11.