Markets mange to trade above water

Indian bourses were managing to keep their heads above water in the early noon session 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, some cautiousness came with the report 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 mostly 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, infrastructure sector stocks remained in focus as Finance Minister Nirmala Sitharaman on September 4 met representatives of infrastructure sector, which is crucial for growth and job creation amid slowdown in the economy.

The BSE Sensex is currently trading at 36785.01, up by 60.27 points or 0.16% after trading in a range of 36752.98 and 36898.99. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.29%, while Small cap index was up by 0.80%.

The top gaining sectoral indices on the BSE were Metal up by 2.71%, Utilities up by 2.29%, Oil & Gas up by 2.22%, Power up by 2.08%, PSU up by 2.03%, while Realty down by 0.80%, Bankex down by 0.28% and Telecom was down by 0.24% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 5.39%, Tata Motors - DVR up by 5.31%, ONGC up by 5.21%, NTPC up by 3.60% and Tata Steel up by 2.65%. On the flip side, HDFC down by 1.70%, ICICI Bank down by 1.60%, Hindustan Unilever down by 1.26%, HCL Tech down by 1.06% and Kotak Mahindra Bank down by 0.84% were the top losers.

Meanwhile, credit ratings agency Crisil, in its latest report has said that cement demand growth is likely to witness a mid-cycle slowdown to 5 to 5.5 percent year-on-year (y-o-y) this fiscal (FY20), down sharply from 12 percent registered in previous fiscal year, due to weak government spending in first half of this fiscal (H1 FY20) and liquidity crunch faced by the real estate market. However, it noted that the profit margin for the sector would be at a six-year high on account of recent price hikes undertaken by the industry in April-June quarter and lower power and fuel costs.

According to the report, the demand growth will bear the brunt of weak government spending in first half which contributes to nearly 35-40 percent of cement demand and liquidity crunch impacting real estate market which consumes 5-8 per cement. It added that other external factors such as election-related labour shortage, issues with sand and water availability in key states further affected cement demand in first quarter of the current fiscal. 

However, rating agency said cement demand growth in second half of this fiscal (H2 FY20) will be better at 8-10 percent, led by gradual pick up in government's fund release for institutional projects post higher dividend pay-out and one-time reserve transfer from RBI to government. Moreover, it said delayed but a good monsoon this season shall augur well for rural housing demand. Adding further, it said that cement prices, which have observed northward trends, are expected to soften further in months ahead as an additional 14-15 MT of capacities are to be commissioned in the second half and ramp-up of acquired capacities continues.

The CNX Nifty is currently trading at 10885.40, up by 40.75 points or 0.38% after trading in a range of 10858.80 and 10920.10. There were 39 stocks advancing against 10 stocks declining on the index, while 1 stock remains unchanged on the index on the index.

The top gainers on Nifty were Tata Motors up by 5.39%, Coal India up by 4.72%, ONGC up by 4.62%, BPCL up by 3.66% and GAIL India up by 3.42%. On the flip side, HDFC down by 1.97%, ICICI Bank down by 1.40%, HCL Tech down by 1.03%, Hindustan Unilever down by 1.02% and Asian Paints down by 0.85% were the top losers.

Asian markets were mostly trading in green; Nikkei 225 gained 465.43 points or 2.25% to 21,114.57, Straits Times strengthened 19.03 points or 0.61% to 3,149.60., Taiwan Weighted increased by 77.36 points or 0.73% to 10,734.67, Kospi advanced 18.77 points or 0.94% to 2,007.30, Shanghai Composite soared 49.32 points or 1.67% to 3,006.73 and Jakarta Composite gained 24.48 points or 0.39% to 6,294.14. On the flip side, Hang Seng was down by 35.96 points or 0.14% to 26,487.27.