Benchmarks trade marginally in green in early deals

Indian equity benchmarks made cautious start and are trading slightly in green in early deals on Thursday. Sensex and Nifty are trading above their crucial 38,600 and 11,450 levels, respectively. Gains in Consumer Durables, Capital Goods and FMCG stocks supported the markets, however losses in Metal, Telecom and Basic Materials stocks limited the upside. Traders took encouragement with Finance minister Nirmala Sitharaman’s statement that more reforms are on the anvil this fiscal to boost growth as fresh economic data and subdued corporate earnings point to a deeper economic downturn. Separately, she said trade negotiations between India and the US are going well and will conclude sooner than expected. Some support also came with a data showing that foreign and domestic funds, both, were net buyers of Indian stocks. The trading activity showed that the foreign portfolio investors (FPIs) bought shares worth a net Rs 686.33 crore on October 16, 2019. Though, gains remained capped with a report that the Securities and Exchange Board of India (Sebi) is planning to further tighten rules for participatory notes (P-notes), offshore derivative instruments issued by brokers to foreign investors not registered in the country.

On the global front, Asian markets were trading mixed following the modest losses overnight on Wall Street after data showed an unexpected decrease in US retail sales in September. Investors also remained cautious amid uncertainty about a US-China trade deal and as negotiations on Brexit continued. Back home, India's fuel demand slipped to its lowest in over two years in September after a fall in diesel and industrial fuel consumption negated the rise in petrol and LPG consumption. The Petroleum Planning and Analysis Cell (PPAC) data showed that consumption of petroleum products in September dropped to 16.01 million tonnes, its lowest since July 2017, from 16.06 million tonnes in the same month last year. In scrip specific development, National Aluminium Company (Nalco) lost over 3% amid report that short supply of coal has severely impacted aluminium production of the company.

The BSE Sensex is currently trading at 38638.42, up by 39.43 points or 0.10% after trading in a range of 38557.43 and 38702.89. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.03%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.37%, Capital Goods up by 0.22%, FMCG up by 0.18%, Consumer Discretionary up by 0.16% and Bankex was up by 0.14%, while Metal down by 1.25%, Telecom down by 0.85%, Basic Materials down by 0.59%, Realty down by 0.57% and Healthcare was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 0.78%, Yes Bank up by 0.73%, NTPC up by 0.60%, ITC up by 0.55% and Asian Paints up by 0.47%. On the flip side, Vedanta down by 1.77%, TCS down by 1.52%, Tata Steel down by 1.47%, ONGC down by 0.92% and HCL Technologies down by 0.75% were the top losers.

Meanwhile, expressing optimism over India’s growth Finance Minister Nirmala Sitharaman has said that the government’s vision of making India a $5 trillion economy and a global economic powerhouse by 2024-25 is ‘challenging’ but ‘realisable’ and highlighted that more reforms are on the anvil before the close of the fiscal year. She added that Indian economy has been on growth trajectory even since 2014. She also emphasised that a $5 trillion economy will make India a global economic powerhouse moving it from the 7th to 3rd position in terms of current dollar exchange rate.

In order to become a $5 trillion economy, she said ‘India's GDP needs to go faster than what we grew at an average of 7.5% in the last five years. That's a matter of fact statement. Inflation needs to be at 4% to ensure commensurate increase in purchasing power.’ She said inflation in the last five years was 4.5% and has been on a declining path to reach 3.4% in 2018-19. She stressed that fixed investment rate needs to increase from 29% to 36% in the course of the next five years, with some depreciation of the rupee.

Sitharaman said that in July 2019 when she presented the first budget of the second term of the Modi government, India's GDP had decelerated in four consecutive quarters. She said ‘Yet we projected the GDP to grow at 7% in 2019-20, slightly higher than the 6.8% realised in 2018-19. Even when our GDP decelerated in the fifth successive quarter, we did not revise downwards our projections as some institutions around the world have already done.’ She said India has just entered the second half of fiscal year 2019-20 and already implemented a series of reforms, with more on the anvil before the close of the year.

The CNX Nifty is currently trading at 11470.05, up by 6.05 points or 0.05% after trading in a range of 11439.65 and 11480.90. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 3.85%, Britannia Industries up by 2.22%, Zee Entertainment up by 1.41%, HDFC up by 1.13% and ITC up by 0.90%. On the flip side, JSW Steel down by 2.54%, Hindalco down by 1.84%, Vedanta down by 1.80%, Tata Steel down by 1.61% and TCS down by 1.46% were the top losers.

Asian markets were trading mixed; Hang Seng increased 198.37 points or 0.74% to 26,862.65, Nikkei 225 surged 20.89 points or 0.09% to 22,493.81, Jakarta Composite soared 11.55 points or 0.19% to 6,181.14, Shanghai Composite gained 0.14 points or 0% to 2,978.85. On the flip side, KOSPI fell 3.49 points or 0.17% to 2,079.34, Straits Times trembled 7.28 points or 0.23% to 3,127.43 and Taiwan Weighted was down by 12.15 points or 0.11% to 11,150.68.