Markets trade in green in early deals; Sensex above 37,400 mark

With a positive opening Indian equity benchmarks extended their previous session's gains and are trading firm in early deals on Thursday. Sensex and Nifty reclaimed their crucial 37,400 and 11,050 levels, respectively. Buying in financial, metal, basic materials and consumer durables supported the markets, however selling in Telecom, TECK and information technology shares capped the upside. Investors are eyeing the data on factory output (IIP) for July and retail inflation (CPI inflation) for August set to be release later in the day. Traders took note of report that Union minister Ravi Shankar Prasad termed the low Gross Domestic Product (GDP) growth as a ‘temporary phenomenon’, and said things will improve in future as the fundamentals of Indian economy are strong. He added that the fundamentals of Indian economy are very strong. Sentiments also got boost with report that monsoon rains in India were above average. The IMD said that for the country as a whole, cumulative rainfall during this year's monsoon from June 01 till September 11 was 3% above the Long Period Average (LPA).

Though, upside remained capped as some cautiousness crept in with global rating agency Moody's statement that Indian non-banking financial companies (NBFCs) and housing finance companies (HFCs) are pulling back on loan against property (LAP) lending to micro, small and medium sized enterprises (MSMEs) because of the funding squeeze caused by the liquidity crisis in the country's financial sector. It added that this situation is a credit negative for the asset- backed securities.

On the global front, Asian markets were trading mixed amid investors sentiment buoyed by reports that the US and China have granted tariff exemptions to each other ahead of the next round of trade talks. Optimism about new global stimulus ahead of the European Central Bank's monetary policy decision later in the day also boosted risk appetite.

Back home, on the sectoral front, Auto stocks were in focus with Union minister Nitin Gadkari’s statement that it is up to the finance ministry along with state governments and GST Council to decide on reduction in GST rate for automobiles and that he has already spoken to the finance minister in this regard. In scrip specific developments, Bank of Baroda surged on raising Rs 500 crore via Bonds and Alkem Laboratories gained as USFDA issues EIR for its St. Louis facility.

The BSE Sensex is currently trading at 37407.67, up by 136.85 points or 0.37% after trading in a range of 37320.57 and 37421.13. 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 0.58%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were Metal up by 1.20%, Basic Materials up by 0.93%, Consumer Durables up by 0.83%, Bankex up by 0.79% and Oil & Gas was up by 0.77%, while Telecom down by 0.67%, TECK down by 0.30% and IT was down by 0.28% were the few losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.35%, Tata Steel up by 2.10%, ONGC up by 1.07%, Indusind Bank up by 0.96% and SBI up by 0.95%. On the flip side, Yes Bank down by 1.89%, Tata Motors - DVR down by 1.62%, Tata Motors down by 0.78%, Bharti Airtel down by 0.77% and Bajaj Auto down by 0.70% were the top losers.

Meanwhile, amid India’s economic growth slowdown, Union minister Ravi Shankar Prasad has termed the low Gross Domestic Product (GDP) growth as a ‘temporary phenomenon’, and expressed confidence that things will improve in future as the fundamentals of Indian economy are strong. He added that the government is taking all necessary steps to boost the economy. Talking about the 5% GDP growth registered in the first quarter of the current fiscal (Q1FY20), he said that global as well as local factors were responsible for it.

The minister said the fundamentals of Indian economy are very strong. While inflation is 3.15%, fiscal deficit is 3.4%. He said ‘we have kept both under control’. Moreover, he said India has attracted $16.30 billion of foreign investment in Q1 FY20, a rise of 28% as compared to same period of last year. Besides, the country’s foreign exchange reserves stand at $428 billion.

He further said that tax collection is also an important parameter. Income tax collection was Rs 10.02 lakh crore in 2017-18 against Rs 6.38 lakh crore in 2013-14. Even Goods and Services Tax (GST) collection for August 2019 was Rs 98,202 crore, increase of 4.51% from August 2018. Prasad also announced that from the next month, income tax notices will not be served directly to tax payers. Notices will be routed into a system which will take a call after examining them.

The CNX Nifty is currently trading at 11069.65, up by 33.95 points or 0.31% after trading in a range of 11052.25 and 11080.35. There were 31 stocks advancing against 18 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 2.63%, Tata Steel up by 2.60%, ICICI Bank up by 2.58%, Indian Oil Corporation up by 2.10% and ONGC up by 1.47%. On the flip side, Yes Bank down by 2.37%, Tata Motors down by 1.23%, Bajaj Finserv down by 1.04%, Bharti Infratel down by 1.03% and Bajaj Auto down by 0.98% were the top losers.

Asian market were trading mixed; Nikkei 225 surged 221.71 points or 1.03% to 21,819.47, Taiwan Weighted strengthened 43.79 points or 0.41% to 10,834.14, Shanghai Composite gained 5.99 points or 0.2% to 3,014.80. On the flip side, Straits Times trembled 6.54 points or 0.2% to 3,197.98, Jakarta Composite lost 15.07 points or 0.24% to 6,366.88 and Hang Seng was down by 40.37 points or 0.15% to 27,118.69.