Markets trade slightly in green in early deals

Indian equity benchmarks made cautious start and are trading slightly in green in early deals on Wednesday, on the back of buying in Capital Goods, Bankex and Telecom stocks. Investors took some support with report that the Indian economy needs a boost and a slip in the fiscal deficit by 40 to 50 basis points will be a good trade-off if it propels demand. Traders also took note of a report that the Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi saw keen interest from foreign investors in emerging areas such as REITs and InvITs, which have a total asset size of more than $10 billion. However, upside remained capped with report that India has moved down 10 places to rank 68th on an annual global competitiveness index, largely due to improvements witnessed by several other economies, while Singapore has replaced the US as the world’s most competitive economy. India, which was ranked 58th in the annual Global Competitiveness Index compiled by Geneva-based World Economic Forum (WEF), is among the worst-performing BRICS nations along with Brazil (ranked even lower than India at 71st this year). 

Global cues remained sluggish with most of the Asian markets trading in red on fading hopes for a resolution to the US-China trade dispute. Investors’ sentiment was dampened by rising tension between the US and China after the Trump administration imposed visa restrictions on Chinese officials and also expanded its trade blacklist to include some of China's top artificial intelligence firms. Besides, Japan will release preliminary September figures for machine tool orders later in the day.

Back home, auto stocks were in focus with rating agency Icra’s statement that its outlook for the domestic commercial vehicle industry remains negative for the rest of the fiscal due to subdued sales amid slowing economic growth and tight financing environment. The rating agency believes that demand headwinds would continue in the near-term with likelihood of limited pre-buying ahead of the roll-out of BS-VI emission norms. In scrip specific development, Titan Company came under pressure after it provided quarterly update for Q2 September 2019. The jewellery division witnessed a sharp fall in sales after a sudden surge in gold prices dented the consumer demand from mid-June.

The BSE Sensex is currently trading at 37592.47, up by 60.49 points or 0.16% after trading in a range of 37503.74 and 37663.12. 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 0.06%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.89%, Bankex up by 0.57%, Telecom up by 0.48%, Industrials up by 0.37% and Utilities was up by 0.37%, while Consumer Durables down by 2.02%, Healthcare down by 0.80%, Realty down by 0.72%, IT down by 0.66% and TECK was down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.28%, Larsen & Toubro up by 1.19%, ICICI Bank up by 1.14%, Mahindra & Mahindra up by 1.01% and Asian Paints up by 1.00%. On the flip side, Yes Bank down by 7.89%, HCL Technologies down by 2.26%, ONGC down by 1.34%, Tata Steel down by 1.14% and Hero MotoCorp down by 1.10% were the top losers.

Meanwhile, India has come down by 10 places to rank 68th in the annual Global Competitiveness Index compiled by Geneva-based World Economic Forum (WEF) from 58th rank earlier. It is mainly due to improvements witnessed by several other economies. The WEF added that the country is among the worst-performing BRICS nations along with Brazil (ranked even lower than India at 71st this year). Though, Singapore has replaced the US as the world’s most competitive economy.

The Forum said India ranks high in terms of macroeconomic stability and market size, while its financial sector is relatively deep and stable despite the high delinquency rate, which contributes to weakening the soundness of its banking system. The country is ranked also high at 15th place in terms of corporate governance, while it is ranked second globally for shareholder governance. In terms of the market size, India is ranked third, while it has got the same rank for renewable energy regulation.

The report showed that India also punches above its development status when it comes to innovation, which is well ahead of most emerging economies and on par with several advanced economies. But, these positive metrics contrast with major shortcomings in some of the basic enablers of competitiveness in case of India, while flagging limited ICT (information, communications and technology) adoption, poor health conditions and low healthy life expectancy. It said the healthy life expectancy, where India has been ranked 109th out of total the 141 countries surveyed for the index, is one of the shortest outside Africa and significantly below the South Asian average.

Besides, it said the country needs to grow its skills base, while its product market efficiency is undermined by a lack of trade openness and the labour market is characterised by a lack of worker rights’ protections, insufficiently developed active labour market policies and critically low participation of women. With a ratio of female workers to male workers of 0.26, India has been ranked very low at 128th place. India is also ranked low at 118th in terms of meritocracy and incentivisation and at 107th place for skills. In the overall ranking, India is followed by some of its neighbours including Sri Lanka at 84th place, Bangladesh at 105th, Nepal at 108th and Pakistan at 110th place.

The CNX Nifty is currently trading at 11137.70, up by 11.30 points or 0.10% after trading in a range of 11110.45 and 11159.15. There were 24 stocks advancing against 25 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Ultratech Cement up by 2.29%, Kotak Mahindra Bank up by 1.37%, ICICI Bank up by 1.29%, Larsen & Toubro up by 1.22% and Mahindra & Mahindra up by 1.05%. On the flip side, Yes Bank down by 8.00%, Titan Company down by 4.77%, HCL Technologies down by 2.33%, Zee Entertainment down by 1.63% and ONGC down by 1.38% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 176.63 points or 0.68% to 25,716.77, Nikkei 225 slipped 140.09 points or 0.65% to 21,447.69, Taiwan Weighted dropped 85.30 points or 0.77% to 10,932.01, Straits Times trembled 12.52 points or 0.4% to 3,098.33, Shanghai Composite declined 4.04 points or 0.14% to 2,909.53 and Jakarta Composite was down by 2.78 points or 0.05% to 6,036.82.