Markets trade firm in early deals; Power, Oil & Gas lead

Indian equity benchmarks made positive start and are trading firm with gains of over 0.25% each in early deals on Tuesday. Power, Oil & Gas and Consumer Durables were among the biggest sectoral gainers on BSE, while selling was witnessed in Telecom, Metal and TECK stocks. Traders took some encouragement with Minister of State for Finance Anurag Thakur’s statement that Indian economy is structurally and fundamentally very strong and the current slowdown, which is cyclical in nature, would not affect it much. He also exuded confidence that India would achieve the target of becoming $5 trillion economy by 2024-25. Though, upside remind capped as the data released by the Central Statistics Office (CSO) showed that India's retail inflation rate grew 3.99% in September which is very close to the Reserve Bank of India's (RBI) target level of 4%. The retail inflation for August was 3.21%. Adding some cautiousness among market participants, former RBI Governor Raghuram Rajan expressed concern over India's fiscal deficit figures, stating that it is the likely reason behind the slowdown in Indian economy. He also criticised the government over its populist decision-making which failed to focus on economic growth.

On the global front, most of the Asian markets were trading in green as some investors held out hope that Britain still had a chance to avoid a messy exit from the European Union at key negotiations this week. Besides, investors were also heartened by Friday’s announcement of a partial trade deal between the US and China. Gains were capped as investors preferred to stay on the sidelines ahead of earnings results from the big US banks this week. Moreover, Japan’s August results for its tertiary industry index and final August figures for industrial production will be out later in the day.

Back home, infrastructure stocks were in focus as rating agency Ind-Ra revised the outlook for road sector to stable-to-negative from stable for the remaining part of 2019-20 fiscal due to subdued funding climate, economic growth-led deceleration in traffic volumes and uncertainty on the bidding model. Also, oil and gas stocks were in watch as Oil Minister Dharmendra Pradhan made a vehement appeal to Finance Minister Nirmala Sitharaman for bringing jet fuel and natural gas under the ambit of GST to reduce multiplicity of taxes and improve business climate. In scrip specific development, Hindustan Unilever (HUL) gained on reporting a 21% rise in net profit to Rs 1,848 crore for the quarter ended on September 30, 2019, driven by a volume growth of 5%. Sales during the quarter under review stood at Rs 9,708 crore.

The BSE Sensex is currently trading at 38334.19, up by 119.72 points or 0.31% after trading in a range of 38238.27 and 38369.08. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.26%, while Small cap index was up by 0.08%.

The top gaining sectoral indices on the BSE were Power up by 0.80%, Oil & Gas up by 0.80%, Consumer Durables up by 0.70%, Utilities up by 0.60% and PSU was up by 0.59%, while Telecom down by 1.03%, Metal down by 0.87%, TECK down by 0.59%, IT down by 0.50% and Basic Materials was down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.11%, Hero MotoCorp up by 1.08%, Asian Paints up by 1.04%, Hindustan Unilever up by 0.99% and HDFC Bank up by 0.96%. On the flip side, Tata Motors down by 2.07%, Infosys down by 1.92%, Tata Motors - DVR down by 1.86%, Bharti Airtel down by 1.07% and Vedanta down by 0.98% were the top losers.

Meanwhile, rising for the second straight month, the Consumer Price Index (CPI) based inflation jumped to a 14-month high of 3.99% in September as compared to 3.28% in August and 3.70% in the September last year, due to costlier vegetables and pulses. The previous high was 4.17% in July 2018. Though, it still remained within the Reserve Bank of India’s (RBI’s) target range of 4%, with deviation of 2% on either side. Retail food prices, which make up almost half of the inflation basket, increased 5.11% in September from 0.51% in the same month last year, compared with a 2.99% rise in August.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the CPI (Rural, Urban, Combined) on Base 2012=100 for September 2019, stood at 3.24%, 4.78% and 3.99%, respectively, compared to 3.27%, 4.31% and 3.70%, respectively in September 2018. The index value of CPI for combined stood at 145.8. The data also showed that consumer food price index (CFPI) for all India Rural and Urban for September 2019 stood at 3.22% and 8.76%, respectively, compared to 0.87% and -0.22%, respectively in September 2018. The index value of CFPI for combined stood at 146.0 for the month of September.

Within food items, inflation for vegetables shot up to 15.40% during the month from 6.9% in previous month. Besides, price rise in pulses and meat and fish baskets for the reported month was 8.40% and 10.29% higher, respectively over August. However, there was a decline in inflation in the fuel and light segment (-2.18%). Also, housing saw inflation slowing to 4.75% in September from 4.84% in August. Inflation in paan, tobacco and other intoxicants eased in September to 4.59% from 5% in the previous month.

The CNX Nifty is currently trading at 11371.15, up by 30.00 points or 0.26% after trading in a range of 11342.10 and 11380.30. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 2.18%, BPCL up by 1.47%, Eicher Motors up by 1.39%, Hero MotoCorp up by 1.34% and Titan Company up by 1.14%. On the flip side, JSW Steel down by 2.28%, Tata Motors down by 2.23%, Infosys down by 2.05%, Zee Entertainment down by 1.26% and Vedanta down by 1.18% were the top losers.

Asian markets were mostly trading in green; Nikkei 225 surged 409.92 points or 1.88% to 22,208.79, Taiwan Weighted strengthened 34.76 points or 0.31% to 11,101.71, Jakarta Composite soared 4.70 points or 0.08% to 6,131.58 and KOSPI rose 1.41 points or 0.07% to 2,068.8. On the flip side, Straits Times trembled 0.81 points or 0.03% to 3,123.64, Hang Seng decreased 15.67 points or 0.06% to 26,506.18 and Shanghai Composite was down by 15.98 points or 0.53% to 2,991.90.