Local equities cut some initial gains ahead of key macro data

Local benchmarks trimmed some of their initial gains in morning session but continue to remain in green territory ahead of key macroeconomic data releases. Traders were seen piling positions in BANKEX, Basic Materials and Oil & Gas sector, while selling was witnessed in Telecom, Auto and TECK sector stocks. Traders took some support with Union minister for law and justice, communication and information technology Ravi Shankar Prasad’s statement that the current economic slowdown is a temporary phenomenon, he claimed that all parameters of the Indian economy are strong and would grow further. Some solace also came in with a private report stated 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. Investors took note of commerce and industry minister Piyush Goyal’s statement that India favours expeditious conclusion of negotiations for the 16-nation Regional Comprehensive Economic Partnership (RCEP) as long as its national interest is protected, but just one or two domestic industries can’t hijack the free-trade talks for their own interest.

On the global front, Asian markets were trading mixed amid hopes for a thaw in US-China trade frictions and expectations that the European Central Bank will kick off another wave of monetary easing by global central banks. Back home, on the sectoral front, cotton industry stock were in focus, as the Cotton Association of India (CAI) lowered its import estimate for the season in view of actual shipments reaching Indian ports being lower than estimated previously. Domestic consumption estimated for the entire crop year till 30 September, 2019 is 315 lakh bales.

The BSE Sensex is currently trading at 37366.55, up by 95.73 points or 0.26% after trading in a range of 37320.57 and 37435.15. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.45%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were BANKEX up by 0.94%, Basic Materials up by 0.90%, Oil & Gas up by 0.87%, PSU up by 0.76% and Metal was up by 0.67%, while Telecom down by 1.29%, Auto down by 0.76%, TECK down by 0.55%, IT down by 0.45% and Consumer Disc was down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.98%, IndusInd Bank up by 2.51%, Tata Steel up by 2.03%, ONGC up by 1.71% and HDFC was up by 1.30%. On the flip side, Yes Bank down by 3.70%, Tata Motors - DVR down by 3.08%, Tata Motors down by 2.38%, Bharti Airtel down by 1.62% and Maruti Suzuki was down by 1.45% were the top losers.

Meanwhile, with an aim to strengthen Public Sector Banks (PSBs) and enhance their lending capacity, the government has decided to infuse Rs 55,000 capital in PSBs under consolidation process in a week's time. Under the fund infusion, Punjab National Bank will get Rs 16,000 crore, Union Bank of India Rs 11,700 crore, Canara Bank Rs 6,500 crore, Indian Bank Rs 2,500 crore, Bank of Baroda Rs 7,000 crore, Indian Overseas Bank Rs 3,800 crore, Central Bank of India Rs 3,300 crore etc.

Sitharaman recently had announced the merger of 10 PSBs. Punjab National Bank, Oriental Bank and United Bank will be merged to become the second largest PSU Bank in India. Canara Bank and Syndicate Bank will be merged into one entity to be 4th largest PSB, while Union Bank of India, Andhra Bank and Corporation Bank will be amalgamated into a single entity to be the 5th largest PSB; and Indian Bank and Allahabad Bank will become one entity to be the 7th largest PSB. The Finance Minister further said that the Bank of India and Central Bank of India would remain independent.

Besides, Sitharamanin had in June this year said that over the last four Financial Years, the government has taken comprehensive steps to strengthen the Public Sector Banks, under Government’s 4R’s strategy of recognising NPAs transparently, resolving and recovering value from Stressed Accounts through clean and effective laws and processes, recapitalising banks, and reforming banks through the PSB Reforms Agenda.

The CNX Nifty is currently trading at 11063.25, up by 27.55 points or 0.25% after trading in a range of 11047.85 and 11081.75. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 3.37%, ICICI Bank up by 2.89%, IndusInd Bank up by 2.43%, Ultratech Cement up by 2.08% and Tata Steel was up by 2.04%. On the flip side, Yes Bank down by 3.49%, Tata Motors down by 2.16%, Eicher Motors down by 2.11%, Maruti Suzuki down by 1.67% and Bharti Airtel was down by 1.53% were the top losers.

Asian market were trading mixed; Nikkei 225 surged 202.78 points or 0.94% to 21,800.54, Taiwan Weighted strengthened 35.64 points or 0.33% to 10,825.99 and Shanghai Composite was up by 5.99 points or 0.2% to 3,014.80.

On the other side, Straits Times trembled 6.13 points or 0.19% to 3,198.39, Jakarta Composite lost 22.95 points or 0.36% to 6,359.00 and Hang Seng was down by 64.41 points or 0.24% to 27,094.65.