Markets maintain gains to end higher on Wednesday

Indian equity bourses maintained their gains on Wednesday to end the session on higher note.  Key indices made a positive start of the day, aided with Finance Minister Nirmala Sitharaman’s statement that the up and down in Gross Domestic Product (GDP) are part of the growth process and the government is responding to the current economic challenges to revive demand and consumption in the country. Adding some optimism, the Export-Import Bank of India (Exim Bank) forecasted India’s merchandise exports to increase from $81.4 billion to $82 billion, with an expected growth rate of 0.6% from a year ago during the second quarter of 2019-20 (July-September).

Firm trade persisted throughout the trading day, on the back of positive cues from the global markets.  Investors were seen taking note of a private report stating that India's high-tech sectors have the potential to attract a whopping $21 billion in investment and create millions of jobs over the next five years. However, gains remained capped, as credit rating agency, Fitch Ratings in its Asia-Pacific Sovereign Credit Overview has forecasted India's economic growth at 6.6% during the current year 2019-20 (FY20), down from 6.8% in the previous year. The agency also added that the government has only limited room to ease fiscal policy because of high debt.

On the global front, European markets were trading in green, after UK employment rate remained at a record high and the jobless rate was at its lowest level since late 1974, reflecting strong labor market conditions. The Office for National Statistics reported that in the three months to July, the ILO jobless rate remained unchanged on quarter, at 3.8 percent, but slightly below the expected rate of 3.9 percent. Asian markets ended mostly higher, as Indonesia's retail sales increased in July, after a slump in the previous month, and is estimated to have grown at a faster rate in August. Retail sales grew 2.4 percent year-on-year in July after a 1.8 percent slump in June.

Back home, the Infrastructure sector stocks ended higher, as Finance Minister Nirmala Sitharaman said that the Government has set up a task force to boost investments in infrastructure projects and was in the process of identifying the sectors which needed funding from the Centre. Further, stocks related to the metal industry remained in watch, after Engineering exporters' body EEPC India has sought modification in a recent notification issued by the Directorate General of Foreign Trade (DGFT) on import of steel products, saying the move may lead to increase in the steel prices. Steel is a crucial raw material for engineering export goods.

Finally, the BSE Sensex gained 125.37 points or 0.34% to 37,270.82, while the CNX Nifty was up by 32.65 points or 0.30% to 11,035.70.

The BSE Sensex touched a high and a low of 37,343.46 and 37,193.57, respectively and there were 18 stocks advancing against 13 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.04%, while Small cap index was up by 1.43%.

The top gaining sectoral indices on the BSE were Realty up by 4.45%, Auto up by 3.51%, Metal up by 2.45%, Consumer Disc up by 1.76% and Basic Materials up by 1.71%, while IT down by 1.29%, TECK down by 1.15%, FMCG down by 0.32%, Oil & Gas down by 0.24% and Utilities down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 13.47%, Tata Motors - DVR up by 10.59%, Tata Motors up by 10.21%, Maruti Suzuki up by 4.18% and Tata Steel up by 3.85%. On the flip side, ONGC down by 2.93%, HCL Technologies down by 2.48%, Sun Pharma down by 1.57%, NTPC down by 1.35% and TCS down by 1.34% were the top losers.

Meanwhile, Union petroleum and natural gas minister Dharmendra Pradhan has said energy demand in India is likely to grow by 4.2 percent per annum by 2035. He noted that this makes the country’s energy demand growing faster than that of all major economies in the world. He also said the share of world's third-largest energy consumer in total global primary energy demand is set to double to 11 percent by 2040.

Pradhan said the per capita energy consumption of the country with 1.3 billion people is lower than the global average. He said the projected energy demand expansion calls for making matching investments in the energy sector. He also said at $85 billion, India recorded the highest growth of foreign energy investments anywhere in the world. He also said the government earlier this year declared that ‘energy justice’ is a top priority for India and also a key objective for himself. He said this encompasses a renewed commitment of India to advance inclusive access to secure, affordable and sustainable energy services.

The minister has stated that India was significantly expanding its energy infrastructure -- be it power generation, more renewables and gas-based infrastructure -- pipelines, city gas network and LNG terminals. He said “we launched a major campaign to improve access to clean cooking fuel under the Ujjwala Yojana scheme three years back, and the target of 8 crore connections was achieved just a couple of days back.' He said the scheme has ensured that LPG coverage reaches more than 90 percent from 55 percent five years ago. He added that India achieved the universal electrification of all villages and this year, the country aims to achieve 100 percent electrification of households.

The CNX Nifty traded in a range of 11,054.80 and 11,011.65. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 13.00%, Tata Motors up by 10.66%, Eicher Motors up by 5.10%, Maruti Suzuki up by 3.86% and JSW Steel up by 3.78%. On the flip side, ONGC down by 3.13%, Wipro down by 2.91%, GAIL India down by 2.80%, HCL Technologies down by 2.71% and Zee Entertainment down by 2.55 % were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 58.45 points or 0.8% to 7,326.40, France’s CAC rose 18.39 points or 0.33% to 5,611.60 and Germany’s DAX was up by 91.05 points or 0.74% to 12,359.76.

Asian markets ended mostly in green on Wednesday, carrying over the momentum from the late surge in US stocks. The lull in the US-China trade conflict has prompted safe-haven assets to unwind recent gains. Hong Kong stocks edged higher after the Hong Kong Stock Exchange said it has started talks to buy the London Stock Exchange that would value the British company at $36.6 billion. Moreover, the investors await a handful of central bank meetings. Fed Chairman Jerome Powell recently repeated his pledge to do whatever it takes to keep the US economy growing. The comments were widely seen as a signal that policymakers are likely to cut rates again. At the Fed's July meeting, policymakers cut rates for the first time since 2008. Meanwhile, the European Central Bank will meet later this week. Markets are waiting to see whether the ECB will release more stimulus to boost the slowing Eurozone economy.