Benchmarks extend gains; trade near intra-day high levels

Indian equity benchmarks extended gains and traded near intra-day high levels in afternoon deals, due to heavy buying in Telecom and Banking stocks. Traders took support with World Bank’s report that in an era of slowing trade and growth, developing countries can achieve better outcomes for its people through reforms to boost their participation in global value chains. The market participants overlooked new IMF chief Kristalina Georgieva’s statement that the global economy is witnessing “synchronized slowdown”, which will result in slower growth for 90 per cent of the world this year, and the effect is even “more pronounced” in some of the largest emerging market economies like India. On the sectoral front, coal stocks remained in focus with ICRA’s report that it expects the energy hungry nation's thermal coal imports to be more than 200 million tonnes in 2019/20, due to lower-than-expected production by state-run Coal India.

On the global front, Asian markets were trading mostly in red, amid growing pessimism over U.S.-China trade talks scheduled later this week. Back home, the BSE Sensex is currently trading at 37802.48, up by 270.50 points or 0.72% after trading in a range of 37415.83 and 37846.39. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.70%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Telecom up by 2.27%, Bankex up by 2.02%, Capital Goods up by 1.25%, Basic Materials up by 1.23% and Power was up by 0.97%, while IT down by 1.04%, Consumer Durables down by 0.70%, TECK down by 0.60% and Energy was down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 4.68%, Mahindra & Mahindra up by 3.39%, ICICI Bank up by 2.38%, SBI up by 2.27% and Bharti Airtel was up by 2.25%. On the flip side, Yes Bank down by 4.93%, HCL Technologies down by 2.59%, Hero MotoCorp down by 1.60%, TCS down by 1.30% and Infosys was down by 0.96% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said its outlook for the Indian commercial vehicle industry remains negative for the rest of the current fiscal year (FY20) largely due to subdued sales amid slowing economic growth and tight financing environment. It believed that demand headwinds would continue in the near-term with likelihood of limited pre-buying ahead of the implementation of Bharat Stage VI (BS-VI) emission norms.

According to the report, given the high inventory levels at dealerships and subdued retail sales, original equipment manufacturers (OEMs) are focusing on rationalising the inventory in the system prior to the roll-out of new emission norms, which would render unsold inventory of existing BS-IV vehicles as obsolete. Hence, it pointed out that wholesales dispatches are not expected to increase materially over the latter half of the fiscal.

The report further stated that sales of commercial vehicles will decline 10-12% in the current financial year which, coupled with elevated level of discounts offered by OEMs, will exert pressure on earnings and credit metrics of OEMs in the near-term. It said the slowdown in the domestic commercial vehicle industry, which started in the second half of FY2019, has accentuated during the current fiscal with volumes contracting by a sharp 19 percent during April-August 2019 on a year-on-year basis. It added that the volume contraction has worsened as the year progressed with CV OEMs cutting down on their wholesale dispatches by 33 per cent during July-August period of this year to pare down inventory levels at dealerships in light of subdued footfalls and retail sales. 

The CNX Nifty is currently trading at 11202.65, up by 76.25 points or 0.69% after trading in a range of 11090.15 and 11222.00. There were 34 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 4.47%, Ultratech Cement up by 3.97%, Mahindra & Mahindra up by 3.14%, ICICI Bank up by 2.61% and Cipla was up by 2.52%. On the flip side, Yes Bank down by 5.37%, Titan Company down by 2.93%, HCL Technologies down by 2.64%, Hero MotoCorp down by 1.61% and TCS was down by 1.11% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 173.22 points or 0.67% to 25,720.18, Nikkei 225 slipped 131.40 points or 0.61% to 21,456.38, Taiwan Weighted dropped 127.35 points or 1.16% to 10,889.96, Straits Times trembled 21.10 points or 0.68% to 3,089.75 and Jakarta Composite was down by 13.12 points or 0.22% to 6,026.48. On the flip side, Shanghai Composite was up by10.35 points or 0.36% to 2,923.92.