Benchmarks trade slightly higher in early deals

Indian equity benchmarks made positive start and soon turned volatile on Monday. Local bourses are trading slightly higher in early deals with gains of around one third of a percent. Some support came in with NITI Aayog vice chairman Rajiv Kumar’s statement that the government expects economy to grow by 6.5% in the current fiscal and that all efforts were focused on bringing India to a higher growth trajectory. Traders took note of India Inc’s statement that the reduction in key policy rate by the RBI is expected to revive investment and encourage consumption, thereby kick-starting the sluggish economy. Besides, the foreign exchange reserves touched a record high of $434.6 billion as on October 1. Though, some volatility came amid sustained foreign fund outflow. Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 682.93 crore on October 4. Meanwhile, the Cabinet has approved a new process of strategic disinvestment with a view to expediting privatisation of select PSUs. This was done with a view to streamlining and speeding up the process, reducing the role of administrative ministries which often used to place hurdles in the path of major stake sales.

Global cues also remained supportive with most of the Asian markets were trading in green following the positive cues from Wall Street on Friday after mixed US jobs data for September reinforced expectations the Federal Reserve will continue cutting interest rates, while offsetting concerns about a potential recession. Though, Japanese market trading lower as investors turned cautious with report that China may be increasingly reluctant to agree to a broad trade deal with the US in the trade talks set to begin on Thursday. Besides, the markets in China and Hong Kong are closed for public holidays.

Back home, India has initiated a probe into an alleged increase in imports of a chemical, which is used to make dyes and insecticides, from South Korea following complaints by domestic firms. In scrip specific development, Yes Bank gained amid report that the Bank is in talks with three top technology companies, including Microsoft Corp., to induct one of them as a strategic shareholder as part of the bank’s strategy to get fresh capital infusion and augment its digital ambitions.

The BSE Sensex is currently trading at 37799.47, up by 126.16 points or 0.33% after trading in a range of 37534.54 and 37853.80. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.50%, while Small cap index was down by 0.27%.

The gaining sectoral indices on the BSE were Telecom up by 1.26%, Bankex up by 0.82%, Consumer Durables up by 0.42%, Metal up by 0.28%, Energy up by 0.20%, while Healthcare down by 0.82%, Auto down by 0.80%, Oil & Gas down by 0.76%, PSU down by 0.71%, Industrials down by 0.57% were the losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.68%, HDFC Bank up by 1.67%, Bharti Airtel up by 1.55%, ICICI Bank up by 1.06% and Kotak Mahindra Bank was up by 1.00%. On the flip side, Indusind Bank down by 2.13%, Hero MotoCorp down by 1.74%, Sun Pharma down by 1.46%, Mahindra & Mahindra down by 1.06% and TCS was down by 0.88% were the top losers.

Meanwhile, expressing optimism over India’s economic growth, Niti Aayog Vice-chairman Rajiv Kumar has said with several steps taken by the government in the past couple of months to boost the economy, the country’s growth is expected to be around 6.5% this year (FY20), although it is lower than expected. He added that the Reserve Bank of India’s (RBI’s) fifth consecutive rate cut reflects the country’s overall ambition to accelerate economic growth to touch 8% sooner rather than later.

He said ‘Given all the work done in the last couple of months and today’s RBI’s fifth consecutive rate cut you can see that everything is focused now in accelerating growth further. ‘And we do want to have this growth probably at 6.5 per cent this year, which is lower than what we expect. We want it to go up to 8 per cent sooner rather than later.’

Highlighting that India is achieving progress on raising the growth rate to higher trajectory and sustaining it there, Kumar said ‘We have a very ambitious growth target’. He also said the bottom line is, there is going to be a continued focus on improving investment and business climate in India across states. On building up India’s infrastructure, he said ‘The only thing we want to do now is to attract more long-term funding’.

The CNX Nifty is currently trading at 11204.55, up by 29.80 points or 0.27% after trading in a range of 11117.85 and 11215.50. There were 24 stocks advancing against 25 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Yes Bank up by 3.91%, Britannia Industries up by 2.80%, HDFC Bank up by 2.02%, Bharti Airtel up by 1.65% and ICICI Bank was up by 1.23%. On the flip side, Zee Entertainment down by 7.64%, BPCL down by 3.02%, Indusind Bank down by 1.84%, Grasim Industries down by 1.59% and Hero MotoCorp was down by 1.58% were the top losers.

Asian markets were mostly trading in green; KOSPI rose 1.58 points or 0.08% to 2,022.27, Straits Times advanced 21.81 points or 0.71% to 3,100.17 and Taiwan Weighted strengthened 46.44 points or 0.43% to 10,940.92. On the flip side, Nikkei 225 slipped 53.49 points or 0.25% to 21,356.71 and Jakarta Composite was down by 16.78 points or 0.28% to 6,044.47.