Local equities cut some initial gains; Sensex holds 39,100 mark

Local benchmarks trimmed most of their initial gains in morning session but managed to trade tab above neutral lines, as traders hoped for further stimulus from the government following a corporate tax cut last week. Energy, IT and TECK counters were on the priority list of the buyers. Some concerns came in with Agriculture Ministry’s report 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. Market participants took note of West Bengal Finance Minister Amit Mitra’s statement that the current slowdown in the economy is due to ‘structural’ changes and not ‘cyclical’. He added the structural changes have been ushered in due to demonetisation and ‘faulty’ GST implementation along with the collapse of IL&FS which crippled the NBFC sector. Besides, a report stated that India and the UAE have discussed areas of cooperation in various sectors, including civil aviation and financial, to strengthen economic ties between the two countries.

On the global front, Asian markets were trading mostly in green, after US Treasury Secretary Steven Mnuchin said US-China trade talks will resume next month, but lingering concerns about slowing global growth tempered the overall appetite for riskier assets. Back home, on the sectoral front, steel industry stocks remained in focus as Steel Minister Dharmendra Pradhan said that in the next two-three years, India will be in a position to remain a net exporter of steel for years. Currently, India has a production capacity of about 140 million tonne (MT) capacity and produces over 100 MT of steel annually.

The BSE Sensex is currently trading at 39122.18, up by 32.15 points or 0.08% after trading in a range of 39011.77 and 39306.37. There were 12 stocks advancing against 18 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.12%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Energy up by 2.78%, IT up by 1.61%, TECK up by 1.28%, Oil & Gas up by 0.73% and Healthcare was up by 0.36%, while Capital Goods down by 1.28%, BANKEX down by 0.97%, PSU down by 0.57%, Industrials down by 0.54% and Consumer Disc was down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 4.44%, Tech Mahindra up by 1.95%, Infosys up by 1.90%, Vedanta up by 1.90% and TCS was up by 1.82%. On the flip side, Larsen & Toubro down by 2.10%, Asian Paints down by 2.06%, Hero MotoCorp down by 1.67%, Bajaj Finance down by 1.61% and Kotak Mahindra Bank was down by 1.55% were the top losers.

Meanwhile, Union Petroleum and Steel Minister Dharmendra Pradhan said that India would become a net exporter of steel in the next three years. Currently, India is importing around 2-3 million tonne (MT) of steel from the overseas market. India has a production capacity of about 140 MT capacity and produces over 100 MT of steel annually.

In order to increase exports, he said India has started talking to countries from which it buys petroleum. India is targeting an increase in its capacity to around 300 MT by 2030, of which around 250 MT is consumable. During the last financial year (FY19), India’s total steel exports declined by 34% to 6.36 MT compared to 9.62 MT during FY18. On the other hand, finished steel import stood at 7.83 MT, valued at Rs 49,317 crore, up 4.7% compared to FY18.

Besides, the minister also batted for zero export of natural resources from India. He added ‘our raw materials should not go out. There should be zero export of natural resources and our industry should focus on value addition.’ Additionally, the government also launched a new campaign called ‘Ispaati Iraada’ to use more steel products in place of single-use plastics. The steel industry is expected to play an important role in the transition to make India a $5-trillion economy.

The CNX Nifty is currently trading at 11601.15, up by 0.95 points or 0.01% after trading in a range of 11561.55 and 11655.05. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 4.28%, Tech Mahindra up by 2.14%, Infosys up by 2.05%, Vedanta up by 1.99% and TCS was up by 1.71%. On the flip side, Zee Entertainment down by 3.72%, Eicher Motors down by 2.38%, JSW Steel down by 2.17%, Asian Paints down by 2.03% and Larsen & Toubro was down by 2.01% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 83.45 points or 0.32% to 26,305.85, Nikkei 225 surged 38.39 points or 0.17% to 22,117.48, Shanghai Composite gained 22.83 points or 0.77% to 2,999.91, Straits Times advanced 14.77 points or 0.47% to 3,158.01 and KOSPI was up by 5.80 points or 0.28% to 2,097.50.

On the other side, Taiwan Weighted dropped 0.68 points or 0.01% to 10,918.34 and Jakarta Composite was down by 77.77 points or 1.25% to 6,128.43.