Indian equities remain in positive terrain

Indian equity benchmarks continued their trade in positive territory in afternoon session, on buying by funds and retail investors. Traders took support 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. Meanwhile, the government has constituted a working group to prepare the contours of a new industrial policy which will aim at making India a manufacturing hub. The working group, comprising members from seven state governments, the Centre and domestic industry, will consult stakeholders and identify pain points of industry. On the sectoral front, shipping sector remained in focus with the Indian Ports Association (IPA) data showing that India’s top-12 major ports have recorded a marginal 1.48 percent upswing in cargo handling at 348.44 million tonnes (MT) in the April-September period of the current financial year.

On the global front, Asian markets were mostly trading in green, following a healthy report on U.S. jobs, while investors cautiously awaited the upcoming trade talks between the U.S. and China. Back home, the BSE Sensex is currently trading at 37831.47, up by 158.16 points or 0.42% after trading in a range of 37534.54 and 37919.47. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.07%, while Small cap index was down by 0.30%.

The top gaining sectoral indices on the BSE were Bankex up by 1.45%, Consumer Durables up by 0.94%, Telecom up by 0.55%, Metal up by 0.25% and Consumer Discretionary Goods & Services was up by 0.16%, while Oil & Gas down by 1.59%, PSU down by 1.30%, Healthcare down by 1.20%, Capital Goods down by 0.94% and Industrials was down by 0.85% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 5.81%, ICICI Bank up by 2.02%, HDFC Bank up by 1.74%, Kotak Mahindra Bank up by 1.73% and Axis Bank was up by 1.73%. On the flip side, Sun Pharma down by 2.20%, Mahindra & Mahindra down by 1.78%, NTPC down by 1.75%, ONGC down by 1.70% and Tata Motors - DVR was down by 1.49% were the top losers.

Meanwhile, the Union Cabinet headed by Prime Minister Narendra Modi has approved a new process of strategic disinvestment. Under the new process, the Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance has been made the nodal department for the strategic stake sale. 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.

While currently public sector units (PSUs) for strategic sale are identified by NITI Aayog, the tweak in policy has now brought DIPAM into the picture. DIPAM and NITI Aayog will now jointly identify PSUs for strategic disinvestment. Also, DIPAM secretary would now co-chair the inter-minister group on disinvestment, along with the secretary of administrative ministries concerned. Strategic sale may involve two-stage bidding beginning with an expression of interest (EoI) or a preliminary intent showing bid, and a final financial bid. Pre-bid meetings with likely bidders and roadshows to attract potential investors will form part of the process to provide clarity on every aspect of the stake sale. Also, data centre will be set up for bidders to look for information on the PSUs up for sale. The idea is to complete the stake sale within a timeframe, say 4-5 months.

The government has set a target of mobalising Rs 1.05 lakh crore for the current financial year (FY20) from disinvestment proceeds and achieving this has become more critical after it doled out Rs 1.45 lakh crore stimulus by way of a cut in corporate tax. Disinvestment proceeds will be critical for the government to stick to its target of keeping fiscal deficit at 3.3 percent of the Gross Domestic Product (GDP) in the current fiscal year ending March 31, 2020.

The CNX Nifty is currently trading at 11211.25, up by 36.50 points or 0.33% after trading in a range of 11117.85 and 11233.85. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 5.69%, Britannia Industries up by 3.50%, ICICI Bank up by 2.01%, Kotak Mahindra Bank up by 1.78% and Axis Bank was up by 1.73%. On the flip side, BPCL down by 4.91%, Sun Pharma down by 2.31%, ONGC down by 1.85%, Mahindra & Mahindra down by 1.76% and Ultratech Cement was down by 1.75% were the top losers.

Asian markets were mostly trading in green; KOSPI rose 1.04 points or 0.05% to 2,021.73, Straits Times advanced 17.66 points or 0.57% to 3,096.02 and Taiwan Weighted was up by 40.58 points or 0.37% to 10,935.06. On the flip side, Jakarta Composite lost 42.85 points or 0.71% to 6,018.40 and Nikkei 225 was down by 34.95 points or 0.16% to 21,375.25.