Markets trade slightly higher in early deals on Wednesday

Indian equity benchmarks made optimistic start and trading slightly higher in early deals on Wednesday. Buying in Energy, Oil & Gas and Telecom stocks supported the markets. Traders took encouragement with a report that the finance ministry is working on one more booster dose to give a leg-up to the economy that has hit over six-year low of 5 per cent. As per the report, the blue print for the stimulus is ready that would be announced by Finance Minister Nirmala Sitharaman in the next few days. Some support also came with Minister of Commerce and Industry and Railways Piyush Goyal’s statement that government is planning to launch a National Logistics Policy to reduce trade costs. He added that all transport sectors of railways, civil aviation, roads and shipping would work towards bringing logistics costs below 10%. Though, some cautiousness crept in with report that India's goods and services tax (GST) panel is unlikely to approve lowering the tax for the auto and allied components sector this week, as a study has warned of major revenue losses.

Global cues also remained supportive with most of the Asian markets trading in green following the modest gains overnight on Wall Street and the plunge in crude oil prices. Investors also looking ahead to the US Federal Reserve's monetary policy decision due later in the day. While the Fed is widely expected to lower interest rates by another 25 basis points, investors are likely to pay closer attention to the accompanying statement for clues about the long-term outlook for rates. The Bank of Japan, the Swiss National Bank and Bank of England are also scheduled to announce their monetary policy decisions this week.

Back home, power stocks were in focus as India Ratings & Research maintained a stable-to-negative outlook on the power sector for the remaining FY20, despite an increase in electricity demand and a rise in thermal plant load factor (PLF). In scrip specific development, Gujarat Alkalies zooms on commissioning 12.5 MW solar power plant at Charanka and Bajaj Finance surges on getting nod to raise up to Rs 8,500 crore.

The BSE Sensex is currently trading at 36606.27, up by 125.18 points or 0.34% after trading in a range of 36603.55 and 36712.99. There were 19 stocks advancing against 11 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.30%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Energy up by 1.30%, Oil & Gas up by 1.10%, Telecom up by 0.82%, PSU up by 0.70% and Bankex was up by 0.56%, while Auto down by 0.88%, FMCG down by 0.24%, Consumer Discretionary Goods & Services down by 0.07%, Utilities down by 0.06% and Consumer Durables was down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.06%, Reliance Industries up by 1.41%, SBI up by 1.37%, Yes Bank up by 1.23% and Axis Bank was up by 1.12%. On the flip side, Maruti Suzuki down by 1.61%, Tata Motors - DVR down by 1.25%, Hero MotoCorp down by 1.04%, Tata Motors down by 0.57% and Hindustan Unilever was down by 0.40% were the top losers.

Meanwhile, in order to give a leg-up to the economy that has hit over six-year low of 5 per cent, the finance ministry is working on one more booster dose. The blue print for the stimulus is ready that would be announced by Finance Minister Nirmala Sitharaman in the next few days. Recently, the government had announced a slew of measures in three dosages which include a special window for real estate, export incentives, bank consolidation and sops for micro, small and medium enterprises (MSMEs) and the automobile sector.

The first set of announcements included rollback of the enhanced surcharge imposed on foreign portfolio and domestic investors in Budget 2019-20. Sitharaman had in her maiden Budget raised the surcharge on income tax paid by super-rich individuals. The surcharge, levied on top of the applicable income tax rate, was hiked from 15 per cent to 25 per cent for those with a taxable income of Rs 2-5 crore, and to 37 per cent for those earning more than Rs 5 crore. This increased the effective tax rate for these two groups by 3.12 per cent and 7 per cent to 39 per cent and 42.74 per cent, respectively.

Some 40 per cent of foreign portfolio investors (FPIs) automatically came under the higher tax rate as they have been investing as a non-corporate entity, such as trust or association of persons (AOPs), which in the income tax law is classified as an individual for the purpose of taxation. It was followed by announcement with regard to consolidation of 10 public sector banks (PSBs) into four. Besides, the government announced a slew of measures to boost exports and the real estate sector.

The CNX Nifty is currently trading at 10840.85, up by 23.25 points or 0.21% after trading in a range of 10839.50 and 10885.15. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.35%, Bajaj Finance up by 1.92%, Reliance Industries up by 1.20%, Bajaj Finserv up by 1.11% and Kotak Mahindra Bank was up by 1.07%. On the flip side, Britannia Industries down by 3.45%, UPL down by 2.80%, Maruti Suzuki down by 1.80%, Eicher Motors down by 1.43% and Hero MotoCorp was down by 1.35% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 60.36 points or 0.56% to 10,934.86, Jakarta Composite soared 17.60 points or 0.28% to 6,254.29, Shanghai Composite gained 11.63 points or 0.39% to 2,989.75, KOSPI rose 9.06 points or 0.44% to 2,071.39 and Hang Seng was up by 7.29 points or 0.03% to 26,797.53. On the flip side, Straits Times trembled 11.77 points or 0.37% to 3,171.23 and Nikkei 225 was down by 18.84 points or 0.09% to 21,982.48.