Benchmarks trade slightly higher in early deals

Indian equity benchmarks extended their northward journey for yet another session with positive start on Tuesday. Sensex and Nifty are trading higher with marginal gains in early deals. Buying in Energy, IT and TECK stocks added to the gains on Dalal Street, though selling in Capital Goods, Consumer Durables and Bankex kept upside in check. Sentiments also got some support with NITI Aayog vice chairman Rajiv Kumar’s statement that India has become a more attractive investment destination following the reduction in corporate tax rates but relocation of units from competitors such as China will depend on other factors as well, such as the ability of states to make their environment more business-friendly. He added that this measure will help restore growth momentum in the second half of the economy. He expects the second half of FY20 (October 2019-March 2020) to clock higher than 7.5% GDP growth. Investors took note of Moody’s Investors Service’s statement that the Reserve Bank of India (RBI) Housing Finance Committee’s recent recommendations on Indian residential mortgage-backed securities (RMBS) have the potential to alleviate key credit challenges associated with the sector.

On the global front, most of the Asian markets were trading in green with modest gains after US Treasury Secretary Steven Mnuchin said US-China trade talks will resume in two weeks. Mnuchin's comments helped offset concerns about global economic growth following the release of disappointing European economic data. Besides, Japan will see preliminary September figures for the manufacturing, services and composite PMIs as well as final July figures for its leading and coincident economic indexes.

Back home, the Agriculture Ministry’s data showed that the country's foodgrain production is estimated slightly lower at 140.57 million tonnes in the kharif season of 2019-20 crop year on likely fall in rice and pulses output. On the sector front, Auto stocks were trading in green as allaying fears of the automobile industry, Union Road Transport Minister Nitin Gadkari said there is no need to ban petrol and diesel vehicles as electric mobility has picked up momentum on its own and all buses would be electric in two years. In scrip specific developments, Wipro gained on the successful launch of the first phase of noomis, the new online platform of FEBRABAN, an industry association that represents the financial services sector in Brazil. However, Aurobindo Pharma dropped after SEBI imposed a penalty of over Rs 22 crore on the company, its promoter PV Ramprasad Reddy and other connected entities for violating insider trading norms.

The BSE Sensex is currently trading at 39218.47, up by 128.44 points or 0.33% after trading in a range of 39051.23 and 39306.37. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.08%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Energy up by 2.20%, IT up by 1.74%, TECK up by 1.44%, Oil & Gas up by 0.63% and Auto was up by 0.54%, while Capital Goods down by 0.95%, Consumer Durables down by 0.77%, Bankex down by 0.56%, Basic Materials down by 0.55% and Metal was down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.42%, Maruti Suzuki up by 2.49%, Tata Motors up by 2.39%, Infosys up by 2.20% and TCS up by 2.00%. On the flip side, Larsen & Toubro down by 1.56%, Hero MotoCorp down by 1.55%, Bajaj Finance down by 1.41%, Kotak Mahindra Bank down by 1.40% and Asian Paints down by 1.34% were the top losers.

Meanwhile, amid India's Gross Domestic Product (GDP) growth slowed to over six years at 5% in Q1FY20, former Union finance minister Yashwant Sinha has said contraction in demand and reluctance to invest have led to the current slowdown in the Indian economy. He said some corporates are sitting on a pile of cash, but are not making investments, thus affecting demand.

He also said figures, data and statistics put out in the country are not seen as reliable anymore and several international agencies like the IMF and the World Bank have raised questions over them. He added that corporate, PSU sectors have suffered in the last one year. The demand in the economy, which is the growth engine, has come crashing down.

Sinha further said cash is not an issue with corporates. Some corporates are not investing because they depend on bank loans for investment and banks have withdrawn some of their facilities. But, he said there are some corporate firms who are sitting on cash, but are not investing and the major reason behind this that is there is no demand.

The CNX Nifty is currently trading at 11605.45, up by 5.25 points or 0.05% after trading in a range of 11581.75 and 11655.05. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 3.11%, Infosys up by 2.34%, Tata Motors up by 2.03%, Maruti Suzuki up by 1.94% and ONGC up by 1.80%. On the flip side, Eicher Motors down by 2.58%, Indian Oil Corporation down by 2.31%, Yes Bank down by 1.89%, Larsen & Toubro down by 1.78% and Hero MotoCorp down by 1.71% were the top losers.

Asian markets were mostly trading in green; Nikkei 225 surged 26.46 points or 0.12% to 22,105.55, Taiwan Weighted strengthened 13.87 points or 0.13% to 10,932.89, KOSPI rose 5.17 points or 0.25% to 2,096.87, Hang Seng increased 83.45 points or 0.32% to 26,305.85, Shanghai Composite gained 22.83 points or 0.77% to 2,999.91 and Straits Times advanced 15.38 points or 0.49% to 3,158.62. On the flip side, Jakarta Composite was down by 81.22 points or 1.31% to 6,124.98.