Local equities trade in fine fettle; Nifty above 10,850 mark

Local benchmarks are trading in fine fettle in late morning session, with Sensex and Nifty garnering gains of around one third a percent, tracking positive Asian clues. Power, Utilities and Metal counters were on the priority list of the buyers. Some encouragement came in with Prime Minister Narendra Modi’s statement that India is committed to becoming a $5 trillion economy by 2024. Traders took note of a report that Prime Minister Narendra Modi will launch the farmers’ pension scheme Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY) from Ranchi on September 12 with a subscriber base of more than one million. However, gains remain capped with a private report that India’s weak public finances and low per capita income compared to similarly-rated economies, dashing hopes of a sovereign rating upgrade for the country in the near future. Besides, CARE Ratings has revised India’s GDP growth forecast on account of subdued growth in the industrial sector and weakness in the agricultural sector during Q1FY20. The rating agency cut the GDP estimate downward from 6.7-6.8% earlier to 6.4-6.5% for FY20 with the underlying GVA growth of 6.3-6.4%. On the sectoral front, Auto stocks remain in focus, on a report that Auto industry executives made a strong case for an immediate cut in GST on automobile products, stating that if it is not done before the festive season, there could be more job losses due to frequent production cuts.

On the global front, Asian markets were trading in green, as the feel-good factor that fired investors the day before looked set to push into the weekend, fuelled by upbeat data and trade optimism. Back home, Nitin Gadkari stated that the National Highways Authority of India (NHAI) will rely largely on asset monetisation to fund its road construction work and plans to raise more than Rs 85,000 crore through asset recycling.

The BSE Sensex is currently trading at 36754.35, up by 109.93 points or 0.30% after trading in a range of 36727.66 and 36867.49. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.19%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Power up by 1.28%, Utilities up by 0.86%, Metal up by 0.72%, PSU up by 0.62% and BANKEX was up by 0.61%, while Realty down by 1.31%, Healthcare down by 0.34%, Oil & Gas down by 0.28%, FMCG down by 0.11% and Telecom was down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 5.26%, Axis Bank up by 2.15%, NTPC up by 2.03%, Power Grid up by 1.68% and Kotak Mahindra Bank was up by 1.25%. On the flip side, Sun Pharma down by 3.67%, Yes Bank down by 1.94%, TCS down by 0.76%, HDFC down by 0.76% and HDFC Bank was down by 0.40% were the top losers.

Meanwhile, CARE Ratings has revised the India’s Gross domestic products (GDP) estimate downward from 6.7-6.8% earlier to 6.4-6.5% for current financial year (FY20) with the underlying gross value added (GVA) growth of 6.3-6.4% on account of subdued growth in the industrial sector and weakness in the agricultural sector during Q1FY20.  The agency mentioned that in the light of sharp economic growth slowdown in Q1FY20 and with consumption and investments unlikely to see a sharp upward shift, the improvement in the economic growth would only be gradual and limited. India recorded a dismal GDP growth of 5% in the first quarter of the ingoing fiscal, on account of slower growth in manufacturing sector.

Besides, it said ‘110 bps interest rate cut by the Reserve Bank of India (RBI). The RBI has mandated banks to link all their fresh loans extended to retail and MSME sector to an external benchmark from October 1, 2019. The impact will be seen on the incremental loans extended to these sectors and will help facilitate transmission mechanism.

The agency also expects the demand to pickup in the festive season. Even favourable monsoons may come out good for rural incomes. Better business environment on account of the recent measures announced by the government including efforts to improve the flow of credit as well as transmission mechanism.

The CNX Nifty is currently trading at 10879.10, up by 31.20 points or 0.29% after trading in a range of 10867.45 and 10906.80. There were 30 stocks advancing against 19 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Tech Mahindra up by 5.20%, Axis Bank up by 2.09%, NTPC up by 1.78%, Power Grid up by 1.53% and ONGC was up by 1.48%. On the flip side, Indiabulls Housing down by 5.20%, Sun Pharma down by 3.74%, Yes Bank down by 1.86%, BPCL down by 1.19% and Cipla was down by 0.88% were the top losers.

Asian markets were trading in green, Hang Seng increased 106.35 points or 0.4% to 26,621.88, Nikkei 225 surged 103.31 points or 0.49% to 21,189.25, Taiwan Weighted strengthened 21.82 points or 0.2% to 10,778.75, Jakarta Composite soared 13.63 points or 0.22% to 6,320.43, Straits Times advanced 10.51 points or 0.33% to 3,157.57, Shanghai Composite gained 4.77 points or 0.16% to 2,990.63 and KOSPI rose 3.07 points or 0.15% to 2,007.82.