Local equities continue to trade in green in morning deals

Local equity benchmarks continued their trade in green in morning session, with Sensex and Nifty garnering gains of around quarter a percent amid gains in Asian peers. Some support came with Reserve Bank data which showed India’s services exports rose by 10.4% to $18.24 billion in August in the current financial year. The services exports or receipts were $16.53 billion in the same month of 2018. It was at $19.08 billion in July this year. Some optimism also came with World Bank’s report that India has halved its poverty rate since the 1990s and achieved a seven plus growth rate over the last 15 years. India is both critical to the success of global development efforts, including eliminating extreme poverty, and as an influential leader for global goods. However, further gains remained capped as merchandise exports shrank 6.6% year-on-year in September to $26 billion, the third contraction in six months, reflecting the impact of not just external headwinds but also subdued domestic manufacturing.

On the global front, Asian markets were trading mostly higher, following Wall Street's gains overnight. But Hong Kong markets wavered a bit as tensions continue to brew in the financial hub. Back home, Chief Economist of the International Monetary Fund (IMF) Gita Gopinath stated that it is important for India to keep fiscal deficit in check, even though its revenue projections look optimistic. As against India’s real growth rate of 6.8 per cent in 2018, the IMF in its latest World Economic Outlook, projected the country’s growth rate at 6.1 per cent in 2019 and noted that the Indian economy is expected to pick up at 7 per cent in 2020.

The BSE Sensex is currently trading at 38587.98, up by 81.89 points or 0.21% after trading in a range of 38466.76 and 38666.38. There were 17 stocks advancing against 13 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.13%, while Small cap index was up by 0.39%.

The top gaining sectoral indices on the BSE were Realty up by 1.44%, Oil & Gas up by 0.97%, Energy up by 0.83%, PSU up by 0.76% and BANKEX was up by 0.58%, while Telecom down by 0.89%, Consumer Durables down by 0.59%, Utilities down by 0.52%, Power down by 0.38% and Capital Goods was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.98%, ICICI Bank up by 1.42%, Bajaj Auto up by 1.21%, Yes Bank up by 0.62% and HDFC was up by 0.60%. On the flip side, Vedanta down by 2.15%, Bharti Airtel down by 1.55%, Hero MotoCorp down by 1.04%, Asian Paints down by 0.91% and Power Grid was down by 0.89% were the top losers.

Meanwhile, rating agency ICRA in its note has said that Indian airlines international air passenger traffic degrew 8.2% in August as against a 3.9% growth in the domestic volume in the same month, with market share declining to 34.2% in the month on account of under-performance. It also said the traffic growth on overseas routes in the first five months of current fiscal was negative at 12.2% as compared to 0.1% negative growth in the period year-ago.

The market share of the Indian carriers on international routes declined by 377 basis points year-on-year to 34.2% in August due to the under-performance, though it witnessed a sequential improvement of 214 basis points.  Given the favourable international scenario, domestic airlines likely to expand further capacities on international routes in the near future to tap the opportunity.

For the five months of the current fiscal, the domestic passenger volume witnessed a muted 2% growth year-on-year. The growth in the industry capacity (measured in available seat kilometres ASKMs) continued to be muted in August at 2.4%, primarily due to Jet Airways grounding in April. However, the domestic space will continue to remain critical for the carriers as it provides sizeable potential as well as feed-in traffic for the international routes. Also, as the airlines continue to expand their fleet, resulting in a gradual correction in the demand-supply imbalance and thus a further moderation in airfares, the domestic passenger traffic growth is expected to increase in the near-to-medium term.

The CNX Nifty is currently trading at 11455.90, up by 27.60 points or 0.24% after trading in a range of 11423.70 and 11481.05. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were BPCL up by 4.70%, Zee Entertainment up by 3.91%, Grasim Industries up by 3.42%, Bajaj Finance up by 3.03% and Wipro was up by 2.67%. On the flip side, Vedanta down by 2.12%, Adani Ports & SEZ down by 2.05%, Bharti Airtel down by 1.62%, Bharti Infratel down by 1.50% and Hindalco was down by 1.48% were the top losers.

Asian markets were trading mostly in green, Nikkei 225 surged 286.37 points or 1.29% to 22,493.58, Hang Seng increased 117.38 points or 0.44% to 26,621.31, Taiwan Weighted strengthened 29.05 points or 0.26% to 11,140.85, Straits Times advanced 19.67 points or 0.63% to 3,135.84 and KOSPI was up by 12.78 points or 0.62% to 2,080.95.

On the other side, Shanghai Composite declined 8.81 points or 0.29% to 2,982.24 and Jakarta Composite was down by 9.43 points or 0.15% to 6,148.74.