Markets trade firm in early deals; Sensex above 39,100 mark

Indian equity benchmarks made slightly negative start but soon gained traction and entered into green territory in early deals on Friday. Markets are trading firm with gains of 0.33% each amid sustained foreign fund inflow. Foreign institutional investors (FIIs) continued to be net buyers in the capital market, infusing Rs 1,158.63 crore on October 17. Sensex and Nifty reclaimed their crucial 39,100 and 11,650 levels, respectively. Barring Telecom, TECK and IT, all other sectoral indices were trading in green on BSE. Traders took encouragement with Union Finance Minister Nirmala Sitharaman’s statement that investors can find no better place in the world than India that has a democracy loving and capitalist respecting environment. She added that the government was continuously working to bring reforms. Though, early cautiousness came with the International Monetary Fund’s (IMF) statement that though India has worked on the fundamentals of its economy, there are problems, including the long-term drivers of growth that need to be addressed.

On the global front, most of the Asian markets were trading in red amid data that showed China's economic growth in the third quarter was at its slowest pace in nearly three decades. China's gross domestic product or GDP expanded 6 percent year-on-year in the third quarter after rising 6.2 percent in the second quarter. This was the slowest growth since the early 1990s. Growth was forecast to slow marginally to 6.1 percent. Besides, uncertainty about final approval of the draft Brexit deal also weighed on sentiment.

Back home, aviation stocks were in focus with the Directorate General of Civil Aviation (DGCA) data showing that domestic air passenger traffic declined for the fourth consecutive month in September, amid a slowing economy and lean travel season. In scrip specific development, Reliance Industries gained ahead of Q2 results scheduled to be reported later in the day. The company is expected to recover from 4-quarter low, given positive developments around oil prices in the quarter. BHEL jumped 22% amid report that the government may pare stake in the company in tranches to 26% from 63.17% now.

The BSE Sensex is currently trading at 39179.87, up by 127.81 points or 0.33% after trading in a range of 38963.60 and 39197.84. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.10%, while Small cap index was up by 0.90%.

The top gaining sectoral indices on the BSE were Power up by 1.95%, Capital Goods up by 1.62%, Utilities up by 1.27%, PSU up by 1.27% and Industrials was up by 1.16%, while Telecom down by 0.49%, TECK down by 0.30% and IT was down by 0.14% were the few losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 7.91%, Tata Motors up by 2.06%, NTPC up by 1.64%, Power Grid up by 1.54% and Vedanta up by 1.42%. On the flip side, Bharti Airtel down by 0.99%, Indusind Bank down by 0.62%, Infosys down by 0.56%, Bajaj Auto down by 0.42% and HCL Tech down by 0.21% were the top losers.

Meanwhile, assuring international investors, Union Finance Minister Nirmala Sitharaman has said investors can find no better place in the world than India that has a democracy loving and capitalist respecting environment. She said ‘India is one of the fastest growing economies even today. It has the best skilled manpower and a government that is continuously doing what is required in the name of reforms, above all democracy and rule of law.’ She added that even if the court system is a bit delayed, India is a transparent and open society. Also, the rule of law works and there are a lot of reforms happening, even those to cut down delays.

For insurance companies, who urged her to remove the cap on investment in this sector, she said the government needs to understand what the expectations of the sector are other than removing of the cap. She would be quite open to it and they could send her the details. Asserting that the government is engaging with everyone on a weekly basis and there is no trust deficit with the corporate sector and investors, she said there is a greater understanding that this government is willing to hear and also wanting to respond. She said the government is committed to maintaining fiscal deficit in India.

Regarding the slowdown in the Indian economy, the finance minister said the government is taking steps to address problems in the stressed sectors. She said ‘though the budget was presented in July, in a year when there was interim budget present before the election, we didn't wait for the next budget to come in February of 2020, almost on a 10-day interval, we have been announcing one or the other intervention with which each of the stressed areas can be addressed.’ Overall in order to boost consumption, the government has very clearly said public expenditure for infrastructure will be clearly front loaded. She also said ‘similarly, for increasing money in the hands of the people so that consumption can improve, I've requested all the building sector banks together with their partners, non-banking, financial companies to reach out to villages, reach out to districts and extend every kind of credit that they would want.’

The CNX Nifty is currently trading at 11625.05, up by 38.70 points or 0.33% after trading in a range of 11553.15 and 11626.35. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 8.97%, Ultratech Cement up by 1.94%, Bajaj Finance up by 1.53%, Vedanta up by 1.48% and Power Grid up by 1.44%. On the flip side, Zee Entertainment down by 2.85%, Bharti Airtel down by 0.74%, Infosys down by 0.68%, Nestle down by 0.63% and Eicher Motors down by 0.55% were the top losers.

Asian markets were mostly trading in red; Taiwan Weighted dropped 24.85 points or 0.22% to 11,162.03, Hang Seng decreased 24.12 points or 0.09% to 26,824.37, Shanghai Composite declined 17.57 points or 0.59% to 2,959.76, Straits Times trembled 11.38 points or 0.36% to 3,114.76 and KOSPI fell 7.48 points or 0.36% to 2,070.46. On the flip side, Jakarta Composite soared 12.10 points or 0.2% to 6,193.11 and Nikkei 225 was up by 71.96 points or 0.32% to 22,523.82.