Firm trade persists on Dalal Street

Key barometer gauges continued their firm trade in afternoon session, on sustained buying by participants driven by positive global cues. The sentiments remained positive with Environment and forest minister Prakash Javadekar termed the present economic slowdown as a ‘cyclical process’, he said the government remains optimistic about near-doubling the economy size to $5 trillion by 2024. Traders also took a note of Union Finance Minister Nirmala Sitharaman’s statement that the government will respond to the challenges faced by all the sectors. She said the Centre is continuously engaging with the sectors facing challenges and interacting with them. Strengthening of rupee against the dollar too propped up the domestic sentiment. On the sectoral front, auto stocks were trading in green despite data released by the Society of Indian Automobile Manufacturers (SIAM) showing that India's domestic passenger vehicle sales fell for the tenth straight month in August, declining 31.57 percent to 1,96,524 units from 2,87,198 units in the year-ago period. 

On the global front, Asian markets were trading mostly in green as investors hoped for stimulus to support growth in the world's major economies. Back home, the BSE Sensex is currently trading at 37154.43, up by 172.66 points or 0.47% after trading in a range of 36784.47 and 37211.50. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.65%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.37%, FMCG up by 1.08%, Basic Materials up by 0.95%, Bankex up by 0.92% and Telecom was up by 0.91%, while IT down by 0.51%, TECK down by 0.36%, Auto down by 0.29% and Power was down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.24%, Larsen & Toubro up by 1.85%, Hindustan Unilever up by 1.71%, ICICI Bank up by 1.66% and Bharti Airtel was up by 1.19%. On the flip side, HCL Tech down by 1.50%, Tech Mahindra down by 1.05%, Tata Motors down by 0.95%, Bajaj Auto down by 0.84% and Infosys was down by 0.76% were the top losers.

Meanwhile, Power Minister R K Singh has said that the government is in the process of implementing a new tariff policy and the second version of UDAY scheme (UDAY 2.0) to resolve the issue of losses of discoms, which is the only difficulty in ensuring round the clock electricity supply for all. He said ‘there is a capacity to transfer (supply) any quantum (of power). There is no reason why 24X7 power cannot be given. The only difficulty in this (24X7 power for All) is losses to some distribution utilities. They don't have money to pay for power.’  

Talking about the steps being taken by the government, the minister said that the central government has already made it mandatory for discoms to open and maintain an adequate letter of credit (LC) as payment security mechanism under power purchase agreements (PPAs) for buying electricity from generating firms from August 1, 2019. He was of the view that the mandatory opening of LC, would take some time to reduce stress on power generation companies. He noted that new tariff policy has already gone to the Cabinet for vetting and approval while the power ministry is working on the UDAY 2.0 scheme which would be launched this fiscal only. He added that under the new tariff policy, the discoms would have to pay a surcharge for delayed payment, which would be equal to the commercial rate of interest. 

Explaining further, Singh said after the rollout of tariff policy and UDAY 2.0 scheme, if a discom would not take steps to reduce losses, then government would not give any grant or loan. About empowering the consumer in the new tariff policy he said, 'We have recognised consumer rights in the policy. Earlier those were not recognized. We are saying that it is a service. One thing we are saying that discoms would be penalised if they do load shedding.'

The CNX Nifty is currently trading at 11001.35, up by 55.15 points or 0.50% after trading in a range of 10889.80 and 11016.70. There were 40 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.62%, UPL up by 2.31%, Larsen & Toubro up by 1.93%, Yes Bank up by 1.82% and Hindustan Unilever was up by 1.57%. On the flip side, HCL Tech down by 1.40%, Tech Mahindra down by 1.36%, Infosys down by 1.09%, Eicher Motors down by 0.72% and Bajaj Auto was down by 0.68% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 118.85 points or 0.56% to 21,318.42, Taiwan Weighted strengthened 20.50 points or 0.19% to 10,801.14, Shanghai Composite gained 18.76 points or 0.63% to 3,018.36, Jakarta Composite soared 19.20 points or 0.3% to 6,328.15, KOSPI rose 10.42 points or 0.52% to 2,019.55 and Straits Times was up by 3.96 points or 0.13% to 3,148.44.

On the flip side, Hang Seng was down by 9.39 points or 0.04% to 26,681.37.