Sensex, Nifty settle in green for second consecutive day

Indian equity bourses maintained their gains to end Monday’s session in green terrain for the second consecutive day, with Sensex and Nifty gaining over 150 & 50 points, respectively. The markets made a negative start of the day, amid the Reserve Bank of India’s (RBI) data report showing that the country's foreign exchange reserves fell by $446 million to $428.604 billion in the week to August 30, mainly on account of a drop in foreign currency assets. But, soon indices turned positive, as 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.

Firm trade persisted over the Dalal Street in the second half of the session, on the back of firm cues from global markets. Some support also came with a private report stating that the government has taken upon itself the task of giving the much-needed boost to the economy, by fast-tracking public spending, particularly CAPEX. Though, some gains got trimmed in the last hour of the trade, after credit rating agency, India Ratings and Research (Ind-Ra) revised its sector outlook on non-banking finance companies (NBFCs) to negative from stable. Besides, the agency maintained its negative outlook on large ticket housing finance companies (HFCs).

On the global front, European markets were trading mostly in green, after the Bank of France retained its growth forecast for the third quarter, amid an improvement in confidence in the manufacturing sector. The bank continues to see a 0.3 percent expansion in the three months to September, same as its initial estimate. Asian markets ended in green, even though China's exports decreased unexpectedly in August amid escalating trade dispute with the US administration. In dollar terms, exports decreased 1 percent on a yearly basis in August, confounding expectations for an increase of 2.1 percent and July's 3.3 percent expansion.

Back home, the automobile industry stocks ended higher, despite the data released by the Society of Indian Automobile Manufacturers (SIAM) showed 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. Further, stocks related to banking industry remained in focus, as Finance Secretary Rajiv Kumar said that the amalgamation of 10 public sector banks into four has nearly ended the consolidation process and created almost the right number of banks to cater to the needs of the aspirational and new India.

Finally, the BSE Sensex gained 163.68 points or 0.44% to 37,145.45, while the CNX Nifty was up by 56.85 points or 0.52% to 11,003.05.

The BSE Sensex touched a high and a low of 37,244.08 and 36,784.47, respectively and there were 21 stocks advancing against 10 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.97%, while Small cap index was up by 0.92%.

The top gaining sectoral indices on the BSE were Telecom up by 1.75%, Capital Goods up by 1.74%, Industrials up by 1.37%, Consumer Durables up by 1.05% and Bankex up by 0.95%, while IT down by 0.81% and TECK down by 0.53% were the only losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 4.47%, Maruti Suzuki up by 2.39%, Larsen & Toubro up by 2.18%, Kotak Mahindra Bank up by 2.05% and Bharti Airtel up by 1.99%. On the flip side, HCL Tech. down by 1.50%, Infosys down by 1.21%, Tech Mahindra down by 1.21%, Bajaj Auto down by 1.16% and TCS down by 0.65% 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 traded in a range of 11,028.85 and 10,889.80. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.30%, UPL up by 3.85%, Maruti Suzuki up by 2.72%, Larsen & Toubro up by 2.40% and Bharti Airtel up by 2.28%. On the flip side, HCL Tech. down by 1.40%, Eicher Motors down by 1.26%, Infosys down by 1.21%, Tech Mahindra down by 1.07% and Bajaj Auto down by 1.03% were the top losers.

European markets were trading mostly in green; France’s CAC increased 1.40 points or 0.02% to 5,605.39 and Germany’s DAX rose 42.98 points or 0.35% to 12,234.71, while UK’s FTSE 100 was down by 16.95 points or 0.23% to 7,265.39.

Asian markets ended mostly higher on Monday on optimism for upcoming Sino-US trade talks, and on hopes the European Central Bank (ECB) would announce new stimulus measures during its meeting slated for Thursday to boost growth. Market sentiment improved further after Friday’s soft US jobs report raised expectations for a Fed rate cut. Chinese shares ended higher as the country's central bank pumped 120 billion yuan (about 16.94 billion US dollars) into the financial system to shore up the flagging economy, shrugged off data showing China's exports fell unexpectedly in August amid escalating trade dispute with the US. Meanwhile, Malaysia's stock market was closed for Yang Dipertuan Agong's Birthday.