Bourses manage to keep their heads above water in afternoon deals

Indian equity benchmarks managed to keep their heads above water in afternoon session, on account of buying in frontline blue chip counters. Investors were taking support with report that the government has stayed with the borrowing plan for the fiscal, as announced in the budget, sending a strong signal that it will try and meet the fiscal deficit target despite a sharp cut in corporate tax rate that is expected to cost Rs 1.45 lakh crore. However, gains remain capped as anxiety remained among the traders with a monthly survey showing that the manufacturing sector activity in September remained unchanged amid subdued demand conditions both domestically as well as externally. The IHS Markit India Manufacturing PMI was at 51.4 in September, unchanged from August and thereby posting its joint-lowest reading since May 2018. On the sectoral front, stocks related to steel sector were trading in red despite India Ratings and Research in its latest report stating that the reduction in raw material prices since July 2019 will provide a major respite to India steel players.  

On the global front, Asian markets were trading mostly higher, on hopes that China and the US could work towards reaching a deal on trade and other issues in the fourth quarter. Back home, the BSE Sensex is currently trading at 38699.23, up by 31.90 points or 0.08% after trading in a range of 38434.25 and 38923.78. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.58%, while Small cap index was down by 0.67%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.96%, Consumer Durables up by 0.82%, Energy up by 0.25% and Auto was up by 0.20%, while Telecom down by 3.46%, Realty down by 2.09%, TECK down by 1.49%, Metal down by 1.47% and IT was down by 1.24% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.38%, Mahindra & Mahindra up by 1.76%, HDFC Bank up by 1.73%, Hindustan Unilever up by 1.00% and Maruti Suzuki was up by 0.96%. On the flip side, Yes Bank down by 7.84%, Indusind Bank down by 4.55%, Bharti Airtel down by 3.87%, TCS down by 2.11% and Tata Steel was down by 1.89% were the top losers.

Meanwhile, Reserve Bank of India (RBI) has said that India’s external debt stood at $557.4 billion in Q1 (April-June) of 2019-20, recording an increase of $14.1 billion over the quarter ended March 2019. Valuation losses due to the depreciation of the US dollar against the rupee and other major currencies were placed at $1.7 billion. Excluding the valuation effect, the increase in external debt would have been $ 12.4 billion instead of $ 14.1 billion at end-June 2019 over end-March 2019.

Commercial borrowings remained the largest component of external debt, with a share of 38.4 percent, followed by non-resident deposits (24 percent) and short-term trade credit (18.7 percent). At end-June 2019, long-term debt (with original maturity of above one year) was placed at $ 447.7 billion, recording an increase of $ 12.8 billion over its level at end-March 2019. The share of short-term debt (with original maturity of up to one year) in total external debt declined to 19.7 percent at end-June 2019 from 20 percent at end-March 2019.

The ratio of short-term debt to foreign exchange reserves declined to 25.5 percent at end-June 2019 as against 26.3 percent at end-March 2019. US dollar-denominated debt continued to be the largest component of the country's external debt, with a share of 51.5 percent at end-June 2019, followed by the rupee (34.7 percent), yen (5.1 percent), SDR (4.7 percent) and the euro (3.2 percent). The borrower-wise classification shows that the outstanding debt of both government and non-government sectors increased at end-June 2019. Debt service declined to 5.8 percent of current receipts at end-June 2019 as compared with 6.4 percent at end-March 2019, reflecting lower repayments of commercial borrowings.

The CNX Nifty is currently trading at 11477.75, up by 3.30 points or 0.03% after trading in a range of 11406.50 and 11554.20. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were BPCL up by 5.04%, HDFC up by 2.23%, HDFC Bank up by 1.71%, Mahindra & Mahindra up by 1.62% and Indian Oil Corporation was up by 1.42%. On the flip side, Yes Bank down by 7.61%, Indusind Bank down by 4.70%, Bharti Airtel down by 4.15%, Grasim Industries down by 3.46% and Coal India was down by 2.68% were the top losers.

Asian markets were trading mostly higher; Taiwan Weighted strengthened 137.97 points or 1.27% to 10,967.65, Nikkei 225 surged 129.40 points or 0.59% to 21,885.24, Straits Times advanced 28.88 points or 0.93% to 3,148.87 and KOSPI was up by 9.37 points or 0.45% to 2,072.42.

On the flip side, Jakarta Composite was down by 6.87 points or 0.11% to 6,162.23.