Indices hold their heads above water

Indian equity bourses were holding their heads above water in late afternoon session, despite mixed cues from European markets. Traders got relief, after the International Monetary Fund (IMF) sees Indian economic growth rebounding to around 7 per cent in the next financial year, supported by measures like monetary policy stimulus and corporate income tax cuts. However, upside remained capped, as India Ratings & Research (Ind-Ra) believes that aggregate states’ fiscal deficit slippage to 2.9% of GDP in FY19 revised estimate (RE), from 2.6% in FY19 budget estimate (BE) (Ind-Ra forecast: 2.8%) is mainly due to an expansionary fiscal policy followed by the state governments.  

On the global front, European markets were trading mixed, as France manufacturing confidence weakened to the lowest level in more than four years in October. The survey results from the statistical office Insee showed that the manufacturing sentiment index fell to 99 in October from 102 in September. This was the lowest reading since March 2015. Asian markets were trading in red.

The BSE Sensex is currently trading at 39038.23, up by 74.39 points or 0.19% after trading in a range of 38866.08 and 39196.67. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.05%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Auto up by 1.40%, IT up by 1.06%, Consumer Durables up by 0.92%, Power up by 0.74% and Consumer Disc up by 0.69%, while Telecom down by 3.12%, Energy down by 1.63%, Oil & Gas down by 1.44%, Realty down by 1.01% and Capital Goods down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.91%, HCL Tech. up by 2.57%, Tata Motors - DVR up by 2.47%, SBI up by 1.94% and Tech Mahindra up by 1.94%. On the flip side, Bharti Airtel down by 3.55%, Vedanta down by 1.85%, Reliance Industries down by 1.71%, ONGC down by 1.21% and Larsen & Toubro down by 0.80% were the top losers.

Meanwhile, credit ratings agency India Ratings & Research (Ind-Ra) in its latest report has said that States are likely to miss Debt/GDP Target on the back of expansionary fiscal policy and slow economic growth. The agency noted that aggregate states’ fiscal deficit slippage to 2.9% of GDP in FY19 revised estimate (RE), from 2.6% in FY19 budget estimate (BE) is mainly due to an expansionary fiscal policy followed by the state governments.

As per Ind-Ra, meeting the N.K. Singh panel’s recommended level of aggregate debt burden at 20% of GDP by FY23 will be a challenge in an economic environment characterised by slow growth and weak demand, despite the significant fiscal consolidation during 2014-19.

The rating agency listed the 9 states where slippage in fiscal deficit was most significant--Andhra Pradesh, Arunachal Pradesh, Bihar, Chhattisgarh, Gujarat, Jammu and Kashmir, Manipur, Mizoram and West Bengal. These states collectively increased their fiscal deficit by more than 24% in FY19 (RE) over FY19 (BE).

The CNX Nifty is currently trading at 11602.20, up by 13.85 points or 0.12% after trading in a range of 11554.40 and 11651.60. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 2.91%, Maruti Suzuki up by 2.67%, HCL Tech. up by 2.39%, Titan up by 1.77% and Bajaj Auto up by 1.69%. On the flip side, Adani Ports & SEZ down by 5.51%, Bharti Airtel down by 3.73%, Zee Entertainment down by 3.13%, Vedanta down by 2.21% and Reliance Industries down by 1.75% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 262.01 points or 0.98% to 26,524.19, Taiwan Weighted dropped 31.58 points or 0.28% to 11,239.67, Straits Times trembled 16.39 points or 0.52% to 3,144.28, Shanghai Composite declined 14.01 points or 0.47% to 2,940.37 and KOSPI was down by 8.24 points or 0.39% to 2,080.62. On the flip side, Jakarta Composite soared 9.39 points or 0.15% to 6,234.89 and Nikkei 225 was up by 76.48 points or 0.34% to 22,625.38.

European markets were trading mixed; FTSE gained 28.19 points or 0.39% to 7,240.68 and DAX was up by 4.78 points or 0.04% to 12,759.47, while CAC fell 22.53 points or 0.40% to 5,635.16.