Sensex, Nifty trade in fine fettle in early deals

Indian equity benchmarks made optimistic start and gained traction in early deals on Thursday, ahead of expiry of futures and options contracts for the month of September. Fall in crude oil prices and broad base buying in all the sectoral indices, pushed the markets higher. Sensex and Nifty are trading higher with gains of around a percent each. Traders took some encouragement with report that easing the regulatory framework for foreign portfolio investors, SEBI has simplified KYC requirements for them and permitted them to carry out the off-market transfer of securities. Besides, the regulator has broad-based the classification for foreign portfolio investors (FPIs) and simplified their registration process. Some support also came with Employees' State Insurance Corporation’s (ESIC) latest payroll data showing that around 14.24 lakh jobs were created in July, higher than 12.49 lakh in the previous month. Though, investors largely overlooked a report that the United Nations Conference on Trade and Development (UNCTAD) has forecast India’s growth to moderate to 6% in 2019 from 7.4% in 2018 due to lower-than-targeted tax collections and limited public spending. Meanwhile, SEBI has come out with new norms that make it mandatory for companies to provide details on delayed loan repayments and possible defaults to credit rating agencies amid concerns over banks citing client confidentiality to resist sharing of such information by their borrowers.

Global cues also remained supportive, with most of the Asian markets trading higher as optimism that the US and China will reach a trade deal soon helped offset worries about a US Presidential impeachment. In addition, the US and Japan signed a limited trade deal on September 25, under which Japan will open new markets to about $7 billion in US agricultural products. Besides, Japan will provide final August numbers for machine tool orders later in the day.

Back home, public sector banking stocks were in focus with rating agency ICRA’s report that profitability and return on assets (RoA) of public sector banks (PSBs) are likely to remain low during the current financial year on the back of continued provisioning on existing and fresh bad loans. In scrip specific development, Adani Enterprises gained on incorporating a company namely Adani Mangalore International Airport on 25 September 2019. Cipla jumped on launching Daptomycin for Injection, 500mg/vial, single-dose vial (for intravenous use only), AP-rated generic equivalent of Cubicin for Injection in the United States.

The BSE Sensex is currently trading at 38979.19, up by 385.67 points or 1.00% after trading in a range of 38676.11 and 39008.83. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.76%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.85%, Energy up by 1.57%, Capital Goods up by 1.55%, Bankex up by 1.52%, Auto up by 1.32%, while there were no losers on the BSE sectoral front.

The top gainers on the Sensex were ICICI Bank up by 2.87%, Indusind Bank up by 2.51%, Tata Motors - DVR up by 2.04%, Larsen & Toubro up by 2.02% and Tata Steel up by 1.96%. On the flip side, Yes Bank down by 2.89%, HCL Technologies down by 1.19%, HDFC down by 0.07% and Infosys down by 0.02% were the few losers.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) in its Trade and Development 2019 report has projected India’s gross domestic product (GDP) growth at 6% for 2019 from 7.4% in 2018. It said slowdown in growth rate is attributed to a sharp fall to 5.8% in the first quarter of 2019. It said together with a projected deceleration in the rate of growth in 2019 for India, where below-target collections from the recently introduced Goods and Services Tax (GST) have combined with fiscal consolidation efforts to limit public spending, will further slow growth in the Asian region as a whole.

According to the report, the two economies that were among the fastest growing in the world, China and India, are showing signs of a loss of growth momentum. Besides, highlighting the risks of shadow banking, it said such institutions were fragile alternatives to public banks and development finance institutions, as the roles of the latter were reduced or done away with, as part of liberalisation.

UNCTAD also highlighted concerns over sustainable development goals (SDGs). It said these concerns were compounded by the dizzying rise in debt levels to a scale similar to those seen before the financial crisis. It suggested that meeting financing demands of SDGs required rebuilding multilateralism around the idea of a ‘Global Green New Deal’, and forging, by implication, a different collective financial future.

The CNX Nifty is currently trading at 11553.80, up by 113.60 points or 0.99% after trading in a range of 11466.35 and 11570.95. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 3.87%, ICICI Bank up by 2.88%, Indusind Bank up by 2.22%, UPL up by 2.19% and Tata Steel up by 2.11%. On the flip side, Yes Bank down by 3.35%, HCL Technologies down by 0.97%, Infosys down by 0.37%, HDFC down by 0.18% and Dr. Reddy’s Lab down by 0.12% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 jumped 46.96 points or 0.21% to 22,067.11, Hang Seng rose 40.48 points or 0.16% to 25,985.83, Taiwan Weighted increased 11.18 points or 0.10% to 10,884.87, KOSPI surged 5.89 points or 0.28% to 2,079.28 and Jakarta Composite was up by 48.00 points or 0.78% to 6,194.40. On the other hand, Straits Times declined 1.06 points or 0.03% to 3,124.76 and Shanghai Composite was down by 21.46 points or 0.73% to 2,933.97.